I think the right sociological/economic perspective is that this is a proposal to take cocaine income away from drug cartels and move it to the state. This is effectively the state wanting to compete with the cartels economically.

There are potential upsides to this. A functioning government has some level of citizen representation and a justice system with some level of accountability. Drug cartels do not.

So, if you assume for the moment that coca farmers and others in the cocaine supply chain will be doing that work regardless, the question is mostly: do you want them to live within the bounds of the law and have the government be the power structure that dictates their lives, or do you want drug cartels? The former has plenty of problems and corruption. But the latter is an outright authoritarian power-by-violence regime.

Allowing people in the cocaine industry to be law-abiding citizens is probably a good thing.

Then there is the longer-term question of what incentives this change would place on society and how it would affect the scale of cocaine production. Anyone can see there's ample risk of a cobra effect here. Whether that outweighs the benefits of removing money from violent cartels is a hard question to answer.