Making any commercial processing and packaging illegal implies a much greater degree of government involvement. You can't have it both ways.
I see your point, let me rephrase. Commercial processing and packaging for human consumption should not be legal. That is, you wont be able to package and sell it "for human consumption" but you could just sell it like you sell flowers or other plants.
The reason why I am against regulations in this argument is simple. I do not want the government to dictate the "quality" of the product, and impose punitive taxes. They do this on cigarettes and liqueur, and I just would not want that to happen in this instance. Also, if the product was never sold for "human consumption" then you as the seller can not be held liable for anything that happens to the user when he uses it for human consumption.