At least $225m in social benefits - such as better outcomes for people who avoid convictions - would come from an extra $150m investment in addiction treatment, while a regulatory framework for legalising cannabis would see $185m to $240m in tax revenue.
Green Party drug law reform spokeswoman Chloe Swarbrick called on Parliament to act urgently, noting the death of a man from synthetic cannabis in Napier last week.
"This report backs up the case for the effective removal of criminalisation for users and for those in possession so they don't have fear when attempting to access health services," Swarbrick said.
"That is calling the bluff on the rhetoric of politicians who've spoken about wanting to treat it as a health issue. That's what treating it as a health issue looks like."
A National Committee for Addition Treatment report from 2011 noted that 50,000 drug users wanted help every year but do not get it, while a Ministry of Health survey found that 16.5 per cent of drug users do not seek help out of fear of the law.
Politicians across the spectrum have been calling for harm-reduction, and Swarbrick said the report was a call for them to "walk the talk".
Prime Minister Jacinda Ardern said the Government would be making an announcement on synthetic drugs, which have been linked to 45 deaths in the last year, "very soon".
But Health Minister David Clark said the issue of decriminalisation would take time to consider.
"Around the world, there is some evidence that legalising or decriminalising approaches have reduced harm. We want to take carefully each step as we look at those issues ... For example, we know we don't want kids accessing drugs.
"We're not going to rush in to anything."
New Zealand First leader Winston Peters said any question of decriminalisation should be put to the New Zealand public in a referendum.
"I think the ordinary New Zealander has got as much of an idea, and as much smarts, and as much experience in answering that question as the Drug Foundation, or indeed any Member of Parliament."
Act leader David Seymour said New Zealand should watch the experiences of Canada, where cannabis is legal, and Portugal, where drug use is decriminalised.
"It's a worthwhile debate to have because clearly too many people are being harmed by drugs under the status quo.
"I think it would be better if the Government was getting tax revenue from drugs rather than having half the police force running around in the bush looking for plants, but there are other aspects to consider."