It turns out there is a western country will full legalization; including heroin and cocaine. Portugtal. Via Glenn Greenwald:
In 2001, Portugal became the only EU-member state to decriminalize drugs, a distinction which continues through to the present. Last year, working with the Cato Institute, I went to that country in order to research the effects of the decriminalization law (which applies to all substances, including cocaine and heroin) and to interview both Portuguese and EU drug policy officials and analysts (the central EU drug policy monitoring agency is, by coincidence, based in Lisbon). Evaluating the policy strictly from an empirical perspective, decriminalization has been an unquestionable success, leading to improvements in virtually every relevant category and enabling Portugal to manage drug-related problems (and drug usage rates) far better than most Western nations that continue to treat adult drug consumption as a criminal offense.
From what I can gather, Greenwald is presenting the findings of his research on Monday at the Cato Institute (libertarian think-tank) in Washington DC. If you are in DC and want to attend, or if you want to watch it live on-line you can register or watch it here.
The details, to say the least, should be interesting.