The state will hold an inquiry into the cannabis industry after the Victorian Upper House this week voted in favour, with support from North East-based MPs Mr Quilty, Jaclyn Symes and Tania Maxwell.

Mr Quilty said the inquiry should look at legalising cannabis, as a way to give farmers an opportunity to grow the "sustainable crop" in place of grow houses in Melbourne.

"It would be much like the 1980s pokies in reverse - a boom along the Victorian side of the Murray," he said.

"The government's bottom line would benefit too.

"Bringing cannabis out of the black market means the government GST take would increase."

Mr Quilty said while some cannabis dealers use the drug sales to further other criminal enterprises, others are only branded criminals because of their involvement in what he called "non-violent, victimless crimes".

"The war on drugs is a war on people. It is time the government stopped criminalising innocent Australians," he said.

"Legal cannabis is not a gateway drug, it provides a low-harm alternative to harder drugs like alcohol or opioids.

"It is an alternate for potential users and an exit gate for existing users of hard drugs."

MP Fiona Patten lead the way on getting the inquiry, noting that the illegal cannabis industry was worth $8.1 billion per year and the largest group of users in Victoria was young people.

She had the support of the Labor Party and some crossbench MPs, but the Liberal and National party MPs voted against holding the inquiry.

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