Decriminalising cannabis and introducing a regulated market would bring significant economic benefits, according to a new report commissioned by the Drug Foundation.
The report, prepared by economist Shamubeel Equab, estimates up to $240 million in tax would be gathered each year from a regulated market.
"If you look at what's happened with the US states and more recently in Canada there are models that we can look at that would work here," Mr Equab said.
"The most important gains that you get from it is that you bring (cannabis) into the formal economy, you can make you can regulate the quality, the potency, who accesses it, all those bits and pieces that we do with alcohol and tobacco already, so it's not like we don't know how to do it.
"And we get to bring in a lot of that revenue off the black market from the criminal economy into the formal economy."
Mr Equab said putting money into health is far more effective and less costly than investing in courts and prisons.
Drug Foundation executive director Ross Bell believed the government understood that treating drugs as a health issue rather than a criminal one was the right way to go saying the report provided economic impetus as well.
"To help them move away not just from the platitudes of treating this as a health issue, but the concrete steps, what can that look like.
"We now have an economic case that we can take to the Finance Minister and say your ministers say they want to treat this as a health issue, the numbers stack up, it's the right thing to do - please do it."
Green Party MP Chloe Swarbrick said the report reinforced decades of research showing punishment didn't reduce drug use.
"We need sensible drug regulation in New Zealand that minimises harm and supports people rather than sending them to jail.
"If we genuinely want to reduce drug harm, providing services to the 50,000 kiwis that already desperately want help for their drug and alcohol issues would be a good starting point."
Ms Swarbrick has called on her colleagues across Parliament to live up to their rhetoric and get on board with what she said was a pragmatic and sensible way forward.