Production isn't regulated, only its sale, in small amounts. It's better than nothing, but it's still screwed up. If you want to run a coffee shop, you can safely sell weed without fear of getting in trouble (as long as you don't sell to minors and don't sell large amounts). However, you still need to buy what you sell. Growing it is illegal (and prosecuted), buying it is illegal (and prosecuted). Worse, if you decide not to grow it yourself (and that surely is the safest option), the only place you can buy it from is organised criminals.
The sad part here is that the majority of current big parties appear to lean towards criminalizing drugs entirely again, rather than follow Uruguay's lead and regulate or nationalize marihuana production.
That's a dated, but sticky image of us you have there. Fortunately, our leaders are doing their utmost best to rid ourselves of it, so it shouldn't take long.