Yes but it is effectively legal. Legalisation is a range from black to white. It's not fully white but 'gray'. In the Netherlands this is a very typical thing, it basically means it's legal but the government don't want to admit it to avoid causing international incidents or making a legal statement.

I'm pretty sure it would have been fully legal if other states (Belgium, Germany) hadn't objected to their citizens crossing the border to get their drugs.

But the coffee shops operate legally, their supply chain does not. It still means you can check for quality at the shops (and there have been no real issues there). As it's a commodity it drives down the price and thus the profits of the cartels.

Some municipalities were even considering growing their own, using unemployed people working there on employment schemes. But it was shut down by the current government I believe.