The state seems to believe that this approach acts as a deterrent and will eventually reduce the sale and consumption of drugs.

No the State wants a monopoly on violence and doesn't want the drug trade to stop. The War on Drugs is a ruse and is designed to keep the people in power in control over the drug trade. Do some research on Gary Webb, Michael C. Ruppert, and Catherine Austin Fitts' research while at HUD. Dig down into the rabbit hole of Oliver North and Manuel Noriega, etc...