As others said, nice post. However, if I had my way it wouldn't play out like that. I would have minimal government involvement as it would be able to be sold commercially. Let the big corporations duke it out to produce the finest, kindest, tightest rolled packs of marijuana cigarettes (no filter naturally). Tax it at about the percentage of cigarettes and you still have a vastly reduced cost to the consumer. To sell commercially, you would need to purchase a business license at a very nominal fee based on the amount you want to sell, which entitles the government to check their records as far as sales, type and amount sold, any taxes collected etc. Mind you, the taxes will be fairly low.
Within a year, no criminal cartel will be able to compete price wise. Unless of course they wish to become a legitimate business. Do you know many criminal cartels that want to let government agencies crack into their books?
As to increased usage, there certainly will be a spike. I would imagine it would jump pretty high for a while and then sorta settle back down with alcohol and prescription drug sales decreasing somewhat and overall marijuana usage increasing overall.
My somewhat hazy take.