The UK will be able to raise and save a combined £1bn ($1.3bn) a year by legalising cannabis, cutting down on justice costs and taxing the drug like cigarettes and alcohol, the Liberal Democrats claimed on Wednesday 17 May.
The party, using analysis from the Treasury and Essex University, said it would introduce limits on potency and permit cannabis to be sold through licensed outlets to adults over the age of 18.
"The war on drugs has been a catastrophic failure," Liberal Democrat manifesto said.
"Every year, billions flow to organised crime while we needlessly prosecute and imprison thousands of people, blighting their employment and life chances, and doing nothing to address the impact of drugs on their health.
"Our current approach to drugs helps nobody except criminal gangs."
The party, which is targeting young people with a number of eye-catching pledges, also promised to end imprisonment for possession of illegal drugs for personal use, while concentrating on catching and prosecuting those who manufacture, import or deal in illegal drugs.
But serious concerns have been raised about the impact of cannabis of users' mental health.
"Research over the last 10 years has suggested that it can have serious consequences for people, such as the development of an enduring psychotic illness, particularly in those who are genetically vulnerable," the Royal College of Psychiatrists has warned.
Elsewhere, Tim Farron's party promised to ban the sale of diesel cars and small vans in the UK by 2025. "Air pollution in the UK is a killer. It contributes to 40,000 premature deaths a year and costs the NHS £15bn," the manifesto said.
"This year, London exceeded its annual air pollution target in just five days. The government has failed time and again to comply with EU limits on pollution.
"That's why the Liberal Democrats will pass a Green Transport Act, introduce an Air Quality Plan to reduce air pollution and protect UK citizens, and support the manufacture of low-emission and electric vehicles, generating jobs and exports."
The Liberal Democrats have also committed to a second EU referendum on the terms of the UK's Brexit deal. "We continue to believe that there is no deal as good for the UK outside the EU as the one it already has as a member," the party said.
The launch of the manifesto comes just three weeks before the general election on 8 June. The latest opinion poll from Panelbase, of more than 1,000 people between 12 and 15 May, put the Liberal Democrats on 7%, below the party's 7.9% share of the vote at the 2015 general election manifesto.