i think the only way it would work is to make it completely legal (also selling and production) with a lot of control on sales. I am not sure what would be best to control sales, guess it would need to be stricter than the control for tobacco and alcohol. But that way the government could at least get taxes from the sales of the drugs.

If only possession is legal then more people might try hard drugs that would have been scared away but drugs still have to be smuggled in. This also means that there is no quality control on the substances.