She added that the government's change of heart - which is subject to parliamentary approval - was part of a "relentless drive".
Ms Smith, who has admitted smoking cannabis while she was a student, told MPs: "There is a compelling case for us to act now, rather than risk the future health of young people.
"Where there is a clear and serious problem, but doubt about the potential harm that will be caused, we must err on the side of caution and protect the public.
"I make no apology for that - I am not prepared to 'wait and see'."
In its report, Cannabis: Classification And Public Health, the advisory council described cannabis as a "significant public health issue".
But it said it should still remain a class C drug, as the risks were not as serious as those of class B substances, such as amphetamines and barbiturates.
The report said the evidence suggested a "probable, but weak, causal link between psychotic illness, including schizophrenia, and cannabis use".
However, in the population as a whole, it played only a "modest role" in the development of these conditions.
Council chairman Sir Michael Rawlings told BBC Radio 4's World at One: "The strength of things like skunk hasn't really changed very much over the last few years but it's now more widely used... The question of potency is a very complex area."
The advisory council did not look at the message conveyed to the public or the impact on policing, which it is not legally obliged to do.
Sir Michael added: "The government may want to take other matters into account. That's their right. They are the government."
In its report the council called for a campaign to reduce the use of cannabis, particularly focusing on young people.
It also voiced concern over the prevalence of domestic cannabis farms supplying the market and the involvement of organised criminal networks.
Ms Smith said she accepted the vast majority of the council's recommendations, but not the classification of the drug.
And Gordon Brown said at prime minister's questions that he believed making cannabis a class B drug was supported by the public and the police.
Last month he said he wanted to "send a message" to young people that using the substance was "unacceptable".
Class C includes substances such as tranquilisers, some painkillers, GHB (so-called "liquid ecstasy") and ketamine. Possession of class C drugs is treated largely as a non-arrestable offence.
Chief Constable Tim Hollis, a leader on drugs for the Association of Chief Police Officers, said he and his colleagues from other police forces would not want to take an uniform approach on the issue.
He said: "Our forces will want to retain discretion on how we deal with the problem because they will want to relate it to local circumstances."
Secret filming of cannabis on sale in Camden
Shadow home secretary David Davis said that the government's reversal of its earlier decision showed the downgrading of cannabis had been a mistake and accused ministers of "dithering".
Liberal Democrat home affairs spokesman Chris Huhne said that, as its advice had been disregarded, ministers should disband the advisory council of experts and replace it with an advisory council of "tabloid newspaper editors".
Labour MP Chris Mullin, who was chairman of the Commons home affairs select committee when it recommended that cannabis was downgraded to class C, said: "The government should follow the advice of the experts rather than that of the tabloids."
But Marjorie Wallace, chief executive of the mental health charity SANE, welcomed Ms Smith's decision, adding: "We believe there are too many casualties to await the results of further education and research."
However, Martin Barnes, chief executive of DrugScope, said: "There is no evidence that reclassifying cannabis to Class B will reduce levels of use, levels of harm or the availability of the drug."
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