everything must be legalised and then the bottom will be taken out of the black market..
To be honest, you're not going to stop dealers by legalising shit like coke and smack. If the Government legalized it, i recon they would put a tax on it, like with tobacco - after all it would be a nice little earner. So there would still be a market for dealerz offering illegal smuggled shit in the same way you get blokes in pubs with a holdall selling smuggled fags.
Re-licence handguns, as a deterent to burgulary, but on a strict license, since gun crime pre-dunblane was hardly ever with legal weapons anyway.