Lets put this in the "Things that sound like good ideas in practice but don't actually work in reality.

So is this a place are interned to and can't leave easily? Well, great, you've created a drug terrorism ghetto.

Is this a place people can freely come and go to? Well, it will likely be "too successful" for a number of the hard anti drug politicians, remember this is supposed to be a failure to show how bad the moral failings of people that even thing about drugs end up in. That and when said politicians kids get caught there they'll have the entire place destroyed.

Also doing drugs probably doesn't mean "crime free for all here", so, um, who's policing the place?