The cost of hiding from the law is vast. A legitimate drugs company wouldn't have to worry about that.
There is no way that an illegal operation can be cheaper, unless it is offering substandard quality, stealing materials, or avoiding taxes.
Take weed for example:
A sophisticated UK criminal operation might be a warehouse or two with hydroponic growth, the weed would then be processed in-house. A legal operation could choose better and biiger premises, as they won't have to hide their activity. Over time the processing would be outsourced to new specialists, who can do it using specialist machinery at mucher lower prices.
The criminals will distribute through a variety of dealers, who take a cut and pass onto smaller dealers. Theft is a major concern and lots of money is spent of protecting goods and hiding from the law. A legal operation could distribute to shops countrywide, and can purchase insurance to combat the risk of theft, and doesn't have to spend money to hide from the law.
The criminals wouldn't be able to compete, and would go out of business. The government could regulate safety of product. Taxes could be raised from the industry to fund medical care of drug users.
Night, and day.
I do agree in principle, but Weed is probably not a good example, most would grow their own as it is so simple and cheap to do (they also make very nice house plants) and those who didn't would buy from a friend.


