Uruguay appears set to become the first country in the world to create a legal market for marijuana.
Supporters say the fight against drugs and trafficking has failed and the country needs new alternatives.
50 MPs in the House of Representatives in Montevideo approved the bill in the 96 seat chamber.
If the bill is passed by the Senate, people over 18 and who are registered on a database can now grow up to six plants, or purchase up to 40 grammes, 1.4 ounces, a month.
Since 2000, it has been legal to possess marijuana, but illegal to grow, sell, buy or produce the drug.
About 8 per cent of the population occasionally consumes cannabis, and the domestic market is believed to be worth around 75 million dollars.