The Dutch decriminalised the sale of small amounts of cannabis -- less than five grams -- in 1976 and allowed each person to legally grow five plants for personal use.
But the wholesale growing and sale of marijuana remains banned, forcing some 600 authorised owners of so-called "coffee shops" to buy from criminals to meet demand.
The bill, suggested by progressive D66 party member Vera Bergkamp, has been "approved", the Dutch lower house said on its website.
It now has to be approved by parliament's upper house, but may not pass as parties who voted against the proposal in the lower house hold a majority in the Senate.
The Netherlands also heads to the polls on March 15, so it is unlikely that the draft bill will be handled in the Senate before then, Dutch media reports said.
Bergkamp argued the cultivation and sale of cannabis will be better controlled if it is regulated by the government.
"It will be better for citizens' health if we know where the weed comes from and we'll be able to demand quality standards," Bergkamp told parliament earlier this month.
It will also help fight criminality, stop coffee shop owners from having to deal with criminal gangs, clarify legislation around the issue and simplify measures to discourage smoking dope, she said.
Opponents of the legislation, however, said regulated cannabis cultivation broke international rules and would lead to more addiction among the youth.
Dutch coffee shops generate millions of euros annually, and in major hubs such as Amsterdam have proven a draw for some of the millions of tourists that visit the country every year.
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