I don't believe legalization will lower costs of recreational drugs much because they are already very low.
http://m.randomhistory.com/2009/07/09_cocaine.html
That's less than I paid for cocaine in the early 80's.
http://www.whatrain.com/drugcontrol/control.html
Even ardent supporters of legalization admit that lower prices for drugs will entice many new users to become addicts as Timothy N. Radonich says at the start in "Stop the drug war: Controlling drugs through regulation" that "Low prices will encourage use."
People say that we spend too much money on the War on Drugs, but with the huge increase of addicts due to legalization, costs to the government will increase dramatically from health care costs, since what addict will pay for his or her own health care.
http://www.druglibrary.net/schaffer/debate/myths/myths5.htm
It would be smart to reduce the costs of fighting drugs by replacing incarceration with treatment and monitoring, yes and check.
I would even support having addicts going to a doctor and, if they can convince the doctor that they just can't do without pot and they have demonstrated an ability to tolerate it, then give them a prescription. That is sort of a compromise.
Nevertheless, medical marijuana as it is working now is the way to go.