This South American nation is one step closer to solving this by turning the government into the country's leading marijuana dealer. The proposal formally introduced to Congress last week would create a National Cannabis Institute with the power to license people and companies to produce marijuana for recreational, medical or industrial uses.
The draft law also would allow anyone to grow up to six marijuana plants and produce up to 480 grams (17 ounces) of marijuana in their own homes.
Possession of marijuana for personal use has never been criminalized in Uruguay and a 1974 law gives judges discretion to determine if the amount of marijuana found on a suspect is for legal personal use or for illegal dealing.
"The problem is that the (current law) allows the consumption and the possession but gives you no clue about where you can get it from. That's why we've been looking for a legal solution," said Vaz, 45, a member of Uruguay's Association of Cannabis Studies who has been counseling Uruguay's Drug Board on the proposed bill.
"I was 40 years old when I went to prison, but if I had been a young guy anything could have happened. I saw violence, gang fights, everything in there. A young guy might have become a criminal. The prohibition spawns criminals," Vaz added.
Uruguay is among the safest countries in Latin America but gang shootouts earlier in the year and rising cocaine seizures have increased concerns over security.
The objective of the marijuana plan is to separate the pot market from riskier drugs to minimize the probability that a consumer will go to the black market and end up buying something worse, said Agustin Lapetina, a government official involved with the proposal.
Overburdened by clogged prisons and drug-related killings, some Latin American countries have relaxed penalties for drug possession and personal use and distanced themselves from the tough stance pushed by the United States four decades ago when the U.S President Richard Nixon declared the war on drugs.
"Since 1971, when Nixon declared the war on drugs, the illegal markets have been growing, drug dealing has mushroomed, organized crime has skyrocketed, and there's only more money laundering and more violence linked to drugs," Julio Calzada, head of the national drugs board, told the Associated Press on Thursday.
"In Uruguay we're decided to take a different path," Calzada said.
But some drug rehabilitation experts say it's a mistake to legalize marijuana, predicting it will put consumers on a path to harsher, more addictive drugs.
"It's a substance that acts in your brain and reduces your level of consciousness. What message are you sending to society if you say that it's legal?" said Nancy Alonso, a psychologist at Fundacion Manantiales, a private drug rehabilitation center that helps addicts in Uruguay and Argentina.
Vaz, the government aide, said the state must keep strict control over the sale of pot and should educate the population, but argued that legalization will prove beneficial.
"Nobody is horrified when someone smokes some marijuana in a square," he said. "We're fully aware that the person is not a criminal or won't attack us, just someone who decided to smoke pot."