Hundreds of employees of the Eastern Cape health department have been issued with final warnings aft.
The Broad Front coalition has a more comfortable majority in the senate, so the house vote was seen as the best chance for opponents to block the law.
The plan was changed little in the six months since President Jose Mujica postponed voting to give supporters more time to rally public opinion. However, recent polls said two-thirds of Uruguayans remained opposed despite a "responsible regulation" campaign for the bill.
The Drug Policy Alliance said that enacting the plan would make Uruguay the world's first country to legally regulate the production, distribution and sale of marijuana for adult consumers.
Dozens of pro-marijuana activists followed the debate as it stretched through the day and into the night from balconies overlooking the house floor. Outside the building, people held signs and danced to reggae music.
"This law acknowledges a reality that already exists: The marijuana sales market has existed for a long time, but illegally, buying it from traffickers, and in having plants in your house for which you can be thrown in jail," said Camilo Collazo, a 25-year-old anthropology student. "We want to put an end to this, to clean up and normalize the situation."
Governing coalition Deputy Sebastian Sabini told The Associated Press that "without a doubt it would be a surprise if this proposal doesn't pass, since it's already been agreed to within all the sectors of the Broad Front."
But with only 50 of 99 house seats held by the coalition, and one of their own deputies being openly critical of the proposal, passage was not assured.
Mujica, for his part, said that he has never consumed marijuana, but that the regulations are necessary because many other people do. "Never in my life did I try it, nor do I have any idea what it is," he told the local radio station Carve.
The heavy toll, costs and questionable results of military responses to illegal drugs have motivated marijuana legalization initiatives in the U.S. states of Colorado and Washington, and inspired many world leaders to re-think drug laws.
Uruguay's legalization proposal won support from the Organization of American States Secretary-General Jose Miguel Inzulza, who met with Mujica last week and said his members had no objections. Pope Francis, however, said during his visit to Brazil that the "liberalization of drugs, which is being discussed in several Latin American countries, is not what will reduce the spread of chemical substances."
Under the proposal, Uruguay's government would license growers, sellers and consumers, and update a confidential registry to keep people from buying more than 40 grams a month. Carrying, growing or selling pot without a license could mean stiff penalties including prison terms.
The idea is to have the government satisfy demand legally, fostering enough marijuana production to drive out illegal dealers and draw a line between pot smokers and users of harder drugs.
The latest proposal "has some adjustments, aimed at strengthening the educational issue and prohibiting driving under the effects of cannabis," Sabini said. "There will be self-growing clubs, and it will also be possible to buy marijuana in pharmacies" that is mass-produced by private companies.
The lower house's committee on addictions decided to limit these growing cooperatives to 45 members each. An Institute for Regulation and Control of Cannabis would be created, with the power to grant licenses for all aspects of a legal industry to produce marijuana for recreational, medicinal or industrial use.
Sabini compared it to Uruguay's agency that controls the wine industry. "Wine in Uruguay is very well controlled. And I assure you that producing wine is very much more difficult than producing cannabis."
National Party Deputy Gerardo Amarilla, however, said the governing coalition's publicity campaign played down the risks of marijuana, which he called a "gateway drug" for other more addictive drugs that foster violent crimes.
"Ninety-eight percent of those who are today destroying themselves with base cocaine began with marijuana," he said. "I believe that we're risking too much. I have the sensation that we're playing with fire."
Supporters said the proposal aimed to eliminate a legal contradiction in Uruguay, where it already is legal to consume pot but against the law to sell it, buy it, produce it or possess even one marijuana plant.
Laura Blanco, president of Uruguay's Cannabis Studies Association, said regulations needed to implement the law would have to be developed quickly.
"We need to work on the entire model so that it's viable and can go into effect 60 or 90 days after it's approved," she told the AP.