There's already powerful incentives against narcotics, you mentioned three of them: "poor health, homelessness, and death." If that's not enough to dissuade someone, laws aren't going to make much difference.
Your unbacked assertion is disputed by the facts cited in the article. In the year after Oregon got rid of criminal penalities, drug overdoses increased significantly more compared to the US average and nearby states. So yes laws do in fact make a difference.
