Liberal Democrats member for Northern Victoria Tim Quilty called for cannabis to be legalised at Wodonga's first ever "420 day" public gathering on Tuesday.
Mr Quilty said legalising cannabis was aligned with his political beliefs.
"The Liberal Democrats party policy is to legalise any drug less harmful than alcohol," he said.
"There are very few health harms established with cannabis.
"It's a much safer drug than alcohol.
"Let's legalise it."
Mr Quilty said research had connected cannabis with schizophrenia, but that it wasn't "conclusive".
"Cannabis has been linked to mental health issues, there is a link, but no one knows what that is," he said.
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He said he thought legalising the drug would be well received in the community.
"I think people will get on board with it," he said.
"There's a number of people here who use cannabis and it's growing.
"It's going to be legal sooner or later, I'd like to make that sooner."
Mr Quilty said legalising cannabis was an extension of his philosophy to give people choice.
"I believe in personal choice," he said.
"Everything I ever do in Parliament is about opening up choices for people, stopping government closing down choices, taking away their freedom.
"This is just another step on that platform.
"If people want to choose to use cannabis, they should be allowed to.
"It's pretty much as simple as that."
Mr Quilty compared the situation with the alcohol prohibition in the United States in the 1920s.
"Everyone knows about how the prohibition in America created organised crime, we have exactly the same problem with our war on drugs," he said.
"By making it illegal we've created massive problems for organised criminals, with a huge black market, with all the associated problems that come with an illegal industry.
"If we legalise it, we can add it into the open economy we can regulate it, we can tax it a little bit, and it will be safer for everyone."
He said legalising cannabis would be a "gold mine" for the state that does it first.
"Especially along the border," he said.
"If Victoria legalises cannabis, we're going to get cannabis tourists coming from NSW."
He described how "busloads of people" from Victoria used to cross over into Southern NSW to play the pokies when it was illegal in Victoria.
"The same possibility is here with cannabis, we could get people coming from Sydney, from Brisbane, to Victoria for a holiday, just crossing the border into Wodonga and staying, enjoying it."
Mr Quilty said he had used cannabis before and didn't currently use it, but would consider doing so if it became legal in the future.