Alan McQuillan told the BBC the current attitude to drugs was "creating a cash cow for organised crime, especially in relation to cannabis".
He said police needed to focus on paramilitaries as the source of the drugs problem in Northern Ireland.
The former policeman was taking part in a BBC Talkback discussion about drug dealing in Northern Ireland.
"I think there is real scope for de-criminalising cannabis," he said. "The time has come to consider it."
Mr McQuillan said the focus needed to be on teaching parents and children about the reality of the drugs trade.
"We need to invest in education, to be aware that often the people who are dealing drugs are corrupted young people who are paying for a habit by dealing to other children," he said.
Former Ulster Unionist MLA Adrian Cochrane-Watson told a local newspaper on Wednesday he would "break the legs" of any drug dealers he caught.
He was speaking after a family emergency in which a young relative became unwell after smoking cannabis.
Speaking in the Radio Ulster discussion on Wednesday, Mr Cochrane-Watson said he made no apology for his outspoken remarks.
He said: "When I see drug dealers driving about in their fancy sports cars - money to burn - it does make me angry.
"When I know who these people are, it makes me frustrated.
"If I had got my hands on the guy who dealt these drugs to 13-year-old kids, I'd rather the police would have gotten there before me."
A former deputy chief constable has said it may be time to reconsider de-criminalising cannabis.