Jacinda Ardern says no one should be jailed for smoking cannabis.
Speaking to supporters in a Facebook Live video on Thursday, the Labour leader also said people shouldn't be criminalised for using the popular drug, "young people in particular".
"I don't think anyone should be serving a sentence in prison for smoking cannabis. I don't think that's a good response."
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Ministry of Justice figures released under the Official Information Act in January showed since 2013, 23 people have been convicted, and jailed or sentenced to home detention, for use of cannabis alone.
Other jail sentences handed down by the courts for cannabis-related crimes included other offences such as cultivation, selling and distribution.
Around 2500 people under the age of 25 are convicted on drug offences every year, according to the NZ Drug Foundation.
Under previous leader Andrew Little, Labour's policy was to push ahead with legalised medicinal marijuana, but the party did not favour decriminalisation for recreational use.
It's not clear whether Ms Ardern's comments signal a change in Labour's official position. The party has been approached for comment.
Ms Ardern says cannabis use needs to be treated as a health issue, not a legal one.
"If we see people using, let's try and get them into programmes that assist," she said.
"The big concern I have is I grew up around young people who, when their brains were still developing when they were 14, 15, were smoking cannabis, and I saw the effect it had on them. I saw kids - who used to be the smartest kids in maths - suddenly they just weren't engaging in school. They weren't the same.
"So for me, it's about trying to make sure we get that balance right. Not criminalising, but making sure that we respond and we protect our kids."
Ms Ardern said any law change under Labour would come to a conscience vote in Parliament.
Ms Ardern's concerns about the effects it might have on youth echo those of her former boss, with Mr Little saying we've "got to make sure we're not creating other health problems by greater liberalisation".