I pulled the following from the Natural Law Party's website. It sounds rather reasonable since they realize that neither full legalization nor full criminalization is the answer.
"Although the legalization of drugs would substantially cut drug-related crimes, only about 20% of total drug-abuse costs are crime related. The remaining 80% of costs are tied to health, absenteeism, lost productivity, etc. Therefore, the legalization of drugs, even if it increased drug use slightly, could result in increased costs that would overwhelm any crime-related savings.
The Natural Law Party is fundamentally dedicated to the development of the full potential of the individual. Apart from economic considerations, long-term use of even mild hallucinogens like marijuana has been shown to decrease EEG coherence -- the orderly and integrated functioning of the brain. Brain wave coherence is linked to intelligence, creativity, learning ability, academic performance, moral reasoning, psychological stability, and emotional maturity. Legalizing drugs could send the wrong signal to the youth, implying that drug use is not that harmful.
At the same time, outlawing narcotics has not proved effective in reducing their usage. Therefore, we will cut our burgeoning prison population in half by decriminalizing nonviolent drug offenses, directing such offenders to drug education, prevention, and rehabilitation programs. To get to the heart of the drug problem, we have to reduce the desire and the demand for drugs -- which the educational programs supported by the Natural Law Party have been proven to do."