Three US states are set to legalise recreational cannabis use this week in votes that could have major implications for the country's war on drugs.

Alongside their choice for president, residents of Washington, Oregon and Colorado – a swing state – will be asked on Tuesday whether they want to decriminalise cannabis.

If the measures are passed, adults over 21 would be able to possess, distribute and use small amounts. Cannabis for authorised medical use is already permitted and regulated by each state, even though it is against federal law.

Support is particularly strong in Washington and Colorado, but a "yes" vote in any of the states would be interpreted by the Department of Justice as an act of defiance against the federal government's war on drugs – the national law enforcement programme that spends $44bn a year struggling to stem the tide of illegal drugs in the US.

In June 2011, however, the Global Commission on Drug Policy declared that the war on drugs had failed.

In a swing state such as Colorado, putting the liberal measure on the ballot could even help to keep the battleground state – narrowly won for Barack Obama in 2008 – on the president's side. Obama has taken a soft line on medical cannabis use.

If recreational use is approved, a new drug industry would inevitably boom and the states expect a tax bonanza from the income generated. Colorado plans to spend the first $40m a year on schools, although the state's largest teachers' union is firmly against legalisation. A yes vote would allow the possession and private use of up to an ounce of cannabis, but it would not be legal to smoke a joint in the street. "But that's already what people do here anyway, so it won't make any difference. Anyone who's been to a concert in this state will know no one's arrested for pot," said Laura Chapin, who runs the "no" campaign in Colorado. Denver and the ski town of Breckenridge decriminalised cannabis for private recreational use in 2005 and 2009 respectively. Chapin, who is a Democrat, admitted she had not heard of any dramatic ill effects as a result, but said legalising it statewide was a different matter: "It effectively establishes Colorado as the cannabis capital of the United States. And it will increase access to the drug for our kids."

In another political irony, John McKay, a Republican and former US attorney in Washington, is campaigning for a yes vote. Criminalisation of cannabis had been "an abject failure", he said, adding that "millions and millions of Americans" illegally smoke cannabis, with the proceeds going to illegal cartels. McKay believes that controlling a legal trade would make it safer.

Several former senior police officers have also come out in favour. However, operators of medical cannabis dispensaries are divided. Some believe it would ease the taboo around pot, while improving quality. Others fear a threat from new competition or from the federal government blocking the law and launching a wider crackdown.

"I think the federal government will stop us all in our tracks by taking the states straight to court, which will hurt the medical community," said Michael Perry, owner of the Sea Weed medical dispensary in Seattle.

Tom Tancredo, a former Colorado Republican congressman, argues that prohibition of alcohol did not work in the 1920s – consumption flourished, as did violence and extortion. He said: "Cannabis can be used safely and responsibly by adults. Limited law enforcement resources should not be wasted on this, they should be used on preventing crimes that harm others."