Justice Minister Simon Power said Prime Minister John Key had made the war against drugs an important part of his leadership.
"There's not a single, solitary chance that as long as I'm the Minister of Justice we'll be relaxing drug laws in New Zealand," he said.
"The Government has no appetite for proposals to make cannabis available for medicinal use.
"I want to make it clear the Government will make no changes to the status quo."
The Labour Party said the report, commissioned by the previous government, was well-researched and impressive.
"We must be hard-line on those who deal in hard drugs," said justice spokeswoman Lianne Dalziel.
"There's no argument about that, but the paper also identifies a range of issues that demand wide debate, including resourcing of treatment and assessment options for people facing drug dependence."
The Drug Foundation called on politicians to "engage constructively" and said the commission's proposals were a major step towards modernising drug laws it called "obsolete".
"Let's not be scared by the commission's proposals," said the foundation's executive director Ross Bell.
"They are not radical, but they do reflect an up-to-date understanding of what New Zealand needs to find a better balance in reducing drug harm and helping those in need."
The commission said it agreed with vigorous law enforcement on commercial drug dealers, but that there should be less emphasis on punishment of personal possession and use, and more emphasis on delivering effective treatment to addicts.
Its report says there is no doubt that alcohol and illegal drugs both caused harm to the community, but "while the harms and costs associated with alcohol are typically understated and misunderstood, those associated with illegal drugs are often generalised and overblown".
It said the focus of drug laws should be on preventing the harm to others from drug use, not on preventing self-harm or reflecting moral values.
"The (Misuse Of Drugs) Act seems poorly aligned with the policy platform of harm minimisation," it said.
"Its focus is on controlling the supply of drugs by eliminating their illegal importation, production and supply.
"The use of drugs, even by those who are dependent on them, is largely treated as a matter solely of criminal policy rather than health policy. It should, however, be the concern of both."
The commission said evidence suggested that drug regulations neither increased nor decreased drug use, and that for personal use the law should best focus on dealing with the harm drug use caused.
"We think that the criminal justice system has a key role to play in identifying individuals whose drug use is causing harm and diverting them into drug education, assessment and treatment.
"Simply punishing a drug user, without taking steps to address their drug use, is a wasted opportunity."
The commission suggested three options when police found personal drug use:
- Police could issue up to three caution notices, with someone receiving a third caution assessed with a view to receiving treatment. A prosecution would follow any further uses.
- Police issuing infringement notices requiring a fixed monetary penalty for less serious drugs.
- A menu of options ranging from cautions or infringements to referral to drug assessment to prosecution.
When a prosecution was commenced, options included:
- Greater use of the police adult diversion scheme;
- Less severe penalties, possibly extending the presumption against imprisonment for use of Class C drugs to all personal use offences;
- Court-based diversion into assessment and treatment.
The commission also questioned whether possession of utensils for the purpose of using drugs should be a criminal offence.
It also said cannabis should be allowed for medicinal purposes, provided the potential for misuse could be controlled.
It said cultivators of cannabis should be licensed, which would minimise the risk the drug would be diverted into illegal activity.
To help addicts, the commission suggested there was place for a limited compulsory civil detention and treatment regime provided it had appropriate safeguards.
