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Why would they wait till legalization to ramp up their extortion racket? If it were possible to expand it in a profitable way, then they (meaning existing or new cartels) would do so.
I don't think that cartels can benefit from capitalism nearly as much as normal corporations can, and that limits their ability to exploit profitable opportunities. It's not like they can just issue bonds to spend money before they make it. Same with the stock market, investors, and everything else. They also face a more challenging labor market, and have important internal constraints on their decisions.
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Because the amount of work cartel members can do is limited. It takes time and effort to figure out how much to demand, punish those who refuse, enforce your claim against rivals, etc. They're workers who primarily make money off of "willingness to commit serious crimes", skills specific to drugs are secondary. Right now the best-paying job for that advantage is the drug trade but if that goes away then there's other stuff like extortion or illegal logging.
Now, obviously there's feedback loops involved: if the available illegal jobs pay worse and can't scale to affording as many workers then that potentially makes law-enforcement easier which makes them even less desirable. The goal would be to have them spiral down until they're almost always less desirable than legal jobs, leaving them to idiots making bad choices and making large-scale organized crime virtually impossible. But you can't just base that on assuming the composition of criminal activity will remain the same but with the "drug" part vanishing, all those criminals in the drug industry will need new jobs and the main thing they have to sell is still "willing to commit serious crimes". It would certainly be a pity to accept serious society-wide consequences from drug legalization in the name of beating the cartels and then see the cartels just shift to something less profitable without collapsing.
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