Really? You think Oakland's problems revolve solely around drug prohibition?
Obviously they don't completely but prohibition or more specifically the profit to be made on selling is a high motivator to engaging in this otherwise idiotic behavior. I went to a completely crap school in New Orleans for a year and even at 12 years old kids were joining gangs and selling stuff. The kids in the gangs had all the cool stuff that you couldn't possibly get otherwise. They also got involved in violence, mostly beat downs but at least one kid got stabbed. I didn't stay there very long so I can't say I got that lifetime of being poor feeling. But I can understand the appeal, stick to the straight and narrow and be poor for life or join these guys and get all the stuff you want and once you are in you are in for life.
It isn't all of it though. Some of it is the parenting (I seriously don't know how these kids went back home with their expensive clothes and parents didn't ask a thing). Some of it is the thug life attitude (snitches get stitches, if someone disrespects you that's a valid cause for violence).
I don't think removing prohibition would clean things up any more than welfare reform in either direction would clean it up but they would all help.