REGULATING cannabis use could be the way forward because of the "colossal failure" of the war on drugs, a report says.

The report suggests the establishment of hard-to-get, easy-to-lose licences for the cultivation, wholesale and retail supply of cannabis, including for medicinal use.

Plain packets of the drug would feature warning labels with all advertising and political donations from cannabis companies banned.

The Australia 21 Alternatives to Prohibition report, released today, is the result of a round table in July of 22 experts and young people, canvassing new approaches to drug policy.

Among the report's authors is the University of Melbourne's former dean of medicine David Penington, who has proposed decriminalisation for possession and use of cannabis and ecstasy for people 16 and over.

Users would be recorded on a national register and could purchase cannabis from an approved government supplier in regulated amounts.

"There would be full cost recovery of production and distribution, including a dispensing fee, in the price to clients," Professor Penington said in the report.

"Counselling and treatment should be available to any dependent users as a health service, akin to that provided by society to other individuals with serious afflictions."

Australia 21 director Alex Wodak, another of the report's authors, said that under the proposal cannabis, instead of being controlled by criminal and corrupt police, would be regulated.

"I don't use the term 'legalisation' because no two people agree what the term means," Dr Wodak said today.

"It would be legal like alcohol and tobacco."

The system would allow government to have a say in how the market operates and get help to users, Dr Wodak said.

"We would be able to put warning labels on the packets," he said.

"We'd be able to provide information to consumers about what they're buying. It's basically a system that can be controlled and regulated."

Dr Wodak predicts the push will generate controversy but says prohibition has not worked.

"Most people accept the view drug prohibition has been a colossal failure," he said.

Originally published as Regulate cannabis use, experts urge