The French Council of Economic Analysis (CAE), a body tasked with advising the government on policy, noted that despite having some of Europe's toughest drugs laws, the French are the continent's heaviest users of pot.
Around 700,000 people are believed to use the drug every day in France, out of a total population of 67 million.
“The system of prohibition promoted by France over the past 50 years has been a failure,” the CAE said in a report, accusing the ban of fuelling organised crime.
The report, which was not commissioned by the government, comes amid a growing debate in France over whether to follow the example of Uruguay, Canada and 11 US states in legalising recreational marijuana.
Over 70 leading figures, including the head of France's Greens party, which made strong gains in recent European elections, signed a letter in the news magazine l'Obs on Wednesday calling for the drug to be made legal, arguing it was the “pragmatic” choice.
But surveys show a short majority of the French still opposed to legalising pot.
The CAE estimated that, based on annual consumption of 500 to 700 tonnes a year, taxes on legal pot could bring as much as €2.8 billion to the state and create up to 80,000 jobs.
Arguing that the tax proceeds from legal marijuana could help fund efforts to fight trafficking, it called for the creation of a state monopoly to license production and sale of the drug.
But Macron's centrist administration poured cold water on the proposal, saying it would only consider legalising marijuana for medical use.
“The position of the government is very clear: We are against legalisation for recreational use,” Transport Minister Elisabeth Borne told LCI television on Thursday.
An EU report in 2015 on alcohol and drug use among 15- and 16-year-olds showed that French teens were among Europe's biggest dope smokers.
Last year the government softened penalties for those caught smoking the drug.
Whereas in the past they risked hefty fines and a one-year prison sentence — in practice most were let off with a warning — now the most they risk is an on-the-spot fine of 200 euros ($226).
The government has vowed to focus its crime-fighting efforts on drug trafficking, with Prime Minister Edouard Philippe telling parliament this month that it is one of his priorities over the next year.
He announced plans to “harass dealing points” and “topple syndicate bosses” in order to fight a trade “which is corroding whole areas of the country”, particularly the high-rise suburbs of cities such as Paris and Marseille.
Meanwhile, the debate on legalising the drug looks set to drag on.
A group of MPs, mostly from smaller leftwing parties but also a handful from Macron's Republic on the Move (LREM) party, tabled a bill this month calling for “controlled legalisation”.