I do not think we should be considering legalising cannabis simply so we can tax the revenue, nor should we necessarily believe the projected "deficit cut" of 1.2 billion. I have no idea of how robust that calculation is, nor what it is predicated upon - number of users, quantity consumed, rate of tax etc. Sounds more like a nice round figure plucked out the air, to me.
The real issues relate to the relationship between those in Governance and those being governed; Just how much interference should we accept into our lives by the Government? In this instance, Cannabis consumption is essentially deemed illegal because of concerns over the negative health implications related to addiction, its association with narcotics, the notion that it is a "gateway" drug to stronger drugs, and the health implications - deleterious effects of smoking and the concern that long term useage can lead to mental health problems.
So - should the government outlaw something because it has proven negative health effects? Well it becomes difficult to support that stance since governments legalise alcohol and nicotine and make some serious money from both through taxation, despite the very well documented effects on health of both, and the known addictive nature of particularly smoking.
So you could argue that we should be looking for a consistent approach from governments. If they legalise drinking and smoking, then they should legalise marijuana as well. And, as a happy benefit from such a decision, the treasury might benefit from a new revenue stream. So, job done, high fives all around.
Not quite that simple, of course :) Because Governments where drinking and smoking are legal are also engaged in public health campaigns trying to nudge people into quitting or moderating such habits, through a combination of tactics; raising the costs and education. So, in such an environment, should they really be considering legalising yet another drug?
Thorny question, good arguments on both sides. Personally, I think that governments should legalise all drugs, except drugs like crack, heroin, LSD etc, and control them in much the same way as they do for alcohol and cigarettes - That is to say, tight controls on production, emphasis placed on quality control and all of that, enshrined in law the notion that you cannot operate machinery or drive or what have you whilst under the influence, and you can be fined/imprisoned if you are found to be.