That’s not quite right. Cannabis in the Netherlands is decriminalized. The production is downright illegal, but it’s not pursued by the law enforcement. Other than that I agree with the rest of your comment.
It's the harsh penalties that attract the worst people because those are the only ones willing to risk them. It hardens the entire trade.
The harmful side-effect of a state-legal cannabis industry but denied access to banking can lead to holding too much cash on hand and robberies like : https://www.mercurynews.com/2020/11/04/person-shot-by-police...