The Law Commission is calling for steps towards decriminalising cannabis use as part of moves to a more health-based system of drug control.
Its four-year review of the Misuse of Drugs Act was tabled in Parliament on Tuesday.
The commission wants ownership of drug-taking equipment such as pipes and bongs decriminalised, and a system of warnings and court-ordered drug treatment for minor cannabis offences.
The report also recommends a controlled drug trial to study medicinal marijuana use and a pilot drug court.
The Government welcomed the report proposing a more health-based approach to drug control.
Associate Minister of Health Peter Dunne says the report is good and provides a way to update the laws from the 1970s and the Government will make its response to the many recommendations a priority.
Auckland criminal barrister Jim Boyack says it is about time drug users were treated as addicts - not criminals.
The managing director of the drug education group Methcon, Dale Kirk, says it is right to increase the health response, but liberalising drug use will just hurt the community more.
The spokesperson for pro-cannabis group NORML, Chris Fowlie, describes the proposals as disappointingly timid.
Spokesperson Chris Fowlie says New Zealand has some of the highest use of cannabis and methamphetamine, also known as 'P', in the world, showing the current laws are not working.
A real health-based approach to drugs would mean replacing the criminal law with medical professionals and family-based solutions, he says.
Commission wants sale of party pills blocked
The Law Commission wants the sale of all new party pills to be blocked until a regulator can be set up to license them.
Deputy president Warren Young says new party pills, such as those simulating the effects of marijuana, need to be stopped until they can be tested by a new licensing body.
Mr Young says it is a major gap that new drugs can be promoted and peddled to young people without any information about whether they are safe.