Legalizing more misery

Glenn Reynolds on election of Evo Morales in Bolivia who plans to legalize coca production:

Legalize the stuff, tax it like tobacco, and let the trial lawyers sue sellers for any product defects or dangers. Morales won't know what hit him.

I assume he's saying this tongue in cheek. The theory of legalizing drugs is that it would take the profit out of the trade by allowing addicts to get drugs as low prices at clinics, thus eliminating the crime associated with use of illegal drugs.

What would be the incentive for suing over the product quality of legalized drugs? If nobody is making money from selling them, what's left for the trial lawyers? Suppose businesses were marketing various brands of cocaine, marijuana, heroin, etc. Surely the government would require them to put warning notices on their products. Unless the businesses committed fraud by claiming that their products were safe to use, or not addictive, the trial lawyers would have no case. The government would have to absorb the social costs, as it does with alcohol--social costs like child abuse and neglect, broken families, deaths and property damages due to drug use. Would insurance companies agree to cover such things? Possibly, but what would their rates have to be?

I just don't understand how exchanging crime costs for the effects of currently illegal drugs being as widely available as tobacco and alcohol works out as a good tradeoff. One thing I am sure of, though, is that there wouldn't be a whole lot for the trial lawyers to go after.