The Dutch situation is that while it's more or less legal to walk in the front door of a coffeeshop and buy cannabis, there's no semi-legal way for the coffeeshops to get supplied through the back door. Unfortunately, most of the supply is indeed controlled by criminals. (Not all, however. Some coffeeshops have networks of people who do home-grow in closets and the like. A friend of mine gets occasional work stripping buds from the plants - she's an excellent source of fingerhash!)

Downgrading to a class C is a step in the right direction, but it's only a very small step. There's still no semi-legal means of buying cannabis, or of doing home-grow. People are still stuck with the same dealers they had before, so the link between soft- and hard-drugs is just the same as it was.