The Beckley Foundation's Global Cannabis Commission document said the cannabis ban had backfired and called for a "serious rethink" of drugs policy.
The ban has had little or no impact on supply and has turned users into criminals, it said.
"Although cannabis can have a negative impact on health, including mental health, in terms of relative harms, it is considerably less harmful than alcohol or tobacco," the report claimed.
"Many of the harms associated with cannabis use are the result of prohibition itself, particularly the social harms arising from arrest and imprisonment," the authors concluded.
They added that, by legalising dope, it would be regulated and would make it easier to stop children becoming users.