The world is changing its mind on drug legalisation policies, and the UK will be left behind unless politicians take action.
Legalisation and regulation of the UK's £6.8bn per year cannabis market could send as much as £1.05bn to the Treasury, a new report said.
Ditching Britain's failed strategy and following the pragmatic approach of major western democracies like Germany, Canada and the US would amend the UK's "messy patchwork of legislation" around cannabis to confront issues of crime and addiction, analysis published today by the Adam Smith Institute and Volteface said.
Read more: Lib Dems: Legalised pot would bring in £1bn
More than half of the British public and three quarters of MPs believe that Britain's current drug policies are ineffective and a new approach is needed.
Conservative MP Michael Fabricant likened the situation to the failed prohibition of alcohol in the United States, which encouraged a lucrative black market. He argued that natural cannabis does no more harm than alcohol or sugary drinks, both of which can eventually lead to death.
"We need a grown up debate on this whole issue and a national education programme on the use and abuse of drugs.”
Liberal Democrat MP Nick Clegg said British politicians should "open their eyes" to how governments around the world are legislating cannabis, which is a Class B drug in Britain.
"Now is the time for Ministers to start writing the rules for this legal market, including age limits and health warnings, so that we can finally take back control from the criminal gangs."
The Home Office has been accused of trying to alter Whitehall reports that show no link between tough laws and the levels of illegal drug use, reported the think thank and drugs policy company.
Former Home Secretary Jacqui Smith said: "Knowing what I know now, I would resist the temptation to resort to the law to tackle the harm from cannabis."
Currently, there are 1,363 inmates in England and Wales on cannabis related charges, costing taxpayers £50m a year.
The World Health Organisation and the British Medical Journal have come out in support of legalisation, saying current policies of prohibition are causing more harm than good.
Sam Bowman, executive director at the Adam Smith Institute, said Britain needs to re-evaluate its drug policies and give the growing market to legitimate businesses.
We have a growing body of evidence from abroad that legalisation and smart regulation are much better ways of curbing the harms cannabis can cause to users and their communities, and that straightforward bans just push users into the hands of criminals. Cannabis is enjoyed by many otherwise law-abiding people and making criminals of them makes an ass of the law – the only sensible approach now is to legalise and regulate.