They might have that incentive, but there is a reputation aspect I think you're ignoring. Most illegal marijuana dealers I've met were just interested in selling weed to anyone who wanted to buy it to pay rent, tuition, or support their own use. They operated under fairly low margins for a small business and essentially didn't price in the legal risk. One guy I know only made about $10-12k/yr in profit.

None sold heroin, as far as I know.