Well, one could argue that (in the short term) there would be more violence as the current power balance is disrupted and gangs search to expand into other areas to generate their money...
But the whole point is that the money not spent in the war on drugs would then be re-directed to control other criminal activities. I'd rather gangs go into white-collar crime than violent crimes.
The Mafia, Yakuza and the Hong Kong triads have in large measure done away from street crime and moved to more economic-oriented crimes such as buying legitimate companies and fiddling with their accounts to illegally import and sell goods, avoid taxes, peddle in corruption, gambling, ...
