I think if you look at areas that try to restrict the supply of these dangerous drug options you will find that that they are less available and expensive. When you look at areas like Portland/West Coast of US, you see that with increasing availability there are lots of associated problems. Perhaps there needs to be institutionally provided drug alternatives for those who have already become addicted, but id argue its very clear that lowering barriers to use has clear negative impacts.
I agree with the sentiment and think that legalizing drugs like psilocybin is a positive step. But I have learned from seeing the consequences of drugs like fentanyl and meth that some substances are too dangerous and addictive to be available to the public. And in practice, cities don't have enough resources to deal with the consequences associated with them that you've listed. It is not practical to allow the use of drugs that consistently drive people to lives of crime and dependence. Often lives are damaged irreparably and the societal costs are incalculable, but emergency bills and social services can alone be staggering high.