People caught with drugs for personal use would be referred for health treatment rather than sent to jail under proposals unveiled by the Scottish Liberal Democrats.
Leader Willie Rennie said Scotland’s current drugs policy “is costly and fails to work for everyone”.
Drugs misuse costs society £3.5 billion a year - amounting to around £900 for every adult in Scotland, he said.
The Lib Dems will call for drug users to be “referred for treatment, education or civil penalties, ending the use of imprisonment”, in a manifesto policy put forward for discussion at its Scottish spring conference this week.
Possession of class A drugs such as ecstasy, LSD, heroin, cocaine and magic mushrooms is punishable by up to seven years in prison.
People caught with class Bs such as amphetamines or cannabis face five years in jail, and possession of class Cs such as tranquillisers, some painkillers and GHB is punishable by up to two years in prison.
All classes carry the additional threat of an unlimited fine, and drug dealers can be punished with a life sentence.
Writing in the Sunday Herald, Mr Rennie said: “We are proposing a fundamental reform of the way drug users are prosecuted and sentenced. Not drug dealers.
“We think it is right that they can face up to life in prison.
“But we do not believe vulnerable people struggling with addiction should be imprisoned simply for possessing drugs for personal use.”
Mr Rennie said too many users have been sent to prison, with a criminal record that jeopardises their future employment and life chances.
The Lib Dems plan is designed to address the mental health, housing and employment problems faced by recovering addicts.
Mr Rennie added: “The first step towards tackling problems created by drugs misuse is to stop treating addiction as a crime.”
He acknowledged that drugs policy is reserved to Westminster but said there is “flexibility in how the legislation is enforced in Scotland”.
He pointed to Police Scotland’s policy of issuing on-the-spot recorded warnings for “low-level crimes” such as possession of a small amount of cannabis.
The Liberal Democrats at Westminster have called for the legalisation of cannabis for recreational use, and have pledged to take UK-wide action to tackle the importation of drugs from abroad and production of drugs at home.