Believe it or not, that's not as horrifying as it seems, and it has been tested. That said, it's all in the application:
Portugal has had a serious drug war issue. Reason is two fold. From the south portugal and spain have a very serious issue with moroccan druglords smuggling drugs to europe. From the north the Galicians do the same. If you're wondering why the galicians of all people would be having an issue with that, answer is Great Britain, and indeed the UK's little colony on gibraltar is known to aid piracy and drug trade.
Point is, Spain's actually dealt with this pretty well all things considered, we have fairly low criminality, specially violent crime, but that's a topic for another day, point is, Portugal was not dealing nearly as well with the issue and their drug war was getting violent.
So... They just said fuck it and surrendered basically. They made it so trafficking is illegal but actually using drugs is a "healthcare issue" and not punished by law, instead only sending addicts to recovery centers.
And they pulled it off with flying colors actually, since then their violent crime rates have plummeted and so have their drug use issues. Why that? Well, getting druggies to centers has 2 benefits. 1-curing addiction can indeed work quite well, although there are indeed druggies that never recover and there are documented cases of drugies that oppenly refuse to recover, so it's certainly not a 100% deal. 2-recovered addicts can have crisis of morality and sell out their vendors if your psychologist is good enough at convincing them. And indeed Portugal used this to pretty quickly start taking out drug lords thanks to that intel, and the spanish police was more than happy to help on our side of the border. It turns the problem into the sollution in a way.
So yeah... This CAN work, of course in order to work it needs downright perfect application, so I'm putting my bets on "they'll fuck it up" but it's not a done deal.