NSW may introduce the toughest cannabis laws in the country with penalties such as fines of up to $500,000 and 20-year-jail sentences to be implemented.
Under the plan, smokers may be forced to take counselling sessions on the links between marijuana and mental disorders to avoid being charged on a first offence.
The Daily Telegraph reported that Premier Morris Iemma called for a review of the cannabis cautioning scheme to send a stronger message about the effects of marijuana on mental health.
People could face 10-year jail sentences for growing as few as five hydroponic plants.
Sentences of 20 years are expected to be made law for people caught with crops of 200 plants.
A range of new offences will also apply to people who expose children to hydroponic drug houses.
The plan comes after health authorities claimed cannabis use was a significant contributor to the mental health crisis.
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New South Wales Premier Morris Iemma has proposed strengthening the states anti- laws.  The government is undertaking a complete rewrite of such laws in response to concerns voiced by some health professionals about the link between the drug and mental health issues.  The proposed legislation will also increase jail sentences for those convicted of growing cannabis . 

"There is growing evidence of a link between long-term cannabis use and the incidence of severe mental health problems," said Mr Iemma. 

Under the plan the current cannabis cautioning system, introduced in 2000, is to be reviewed. Cannabis users would be required to attend counseling to "understand the link between cannabis use and mental illness" to avoid being charged for their first offence. At present those issued with their second cautioning notice are required to call a counseling service.