There are two schools of thought here. The first is decriminalisation, where you make the possession of non-trafficable quantities (i.e. personal use amounts) legal, but still continue to prosecute dealers and producers/manufacturers. This removes the stigma around usage and increases the prospects for rehabilitation and harm reduction. We have seen this in things like safe injecting rooms, where the risks associated with usage are minimised (clean needles, rapid response available for overdoses, etc).
Regulation and taxation, however, means that manufacturing would be legal and licensed. This has some benefits (you would have a known concentration for each drug, rather than just whatever the maker/dealer gives) and tax revenue could be put to good uses. This, just like the taxes on cigarettes and alcohol, is what's referred to as a "vice tax" - you set it quite high to discourage the use (or excessive use) of something, but still make it legal.
I am more for the former scenario, as it recognises that these drugs are more often than not used as a form of self medicating against some other (often emotional/mental) trauma or pain. Where the substances are genuinely ones of addiction (as in, there is a physiological response to the removal of the substance) then having safe usage spaces allows people to seek help in a safe manner.
Any attempts to completely remove illicit substances is going to be difficult at best, so approaching it from a harm reduction perspective has been shown to be more effective as a whole.