There is a difference between drug users and drug dealers. With the law, there is usually such a difference, and while both are illegal, the police and prosecution will often make a deal with users, and even with low level dealers, to let them off with light punishments if they turn over the {higher level] dealers.

Rav Efraim Zalmanovitz, the rav of Mazkeret Batya, has gone on record making such a difference according to the halacha as well. Rav Zalmanovitz said that if a student is aware of a fellow student using drugs he should not report him to the police. Rather, he should immediately inform the students educator who will take care to deal with the problem properly. Rav Zalmanovitz even added that he discussed this very issue with the Minister of Internal Security and asked him not to chase down such users and not to pressure students to turn in their fellow students.

Rav Zalmanovitz continued that while students should not report their fellow students who are users, they should immediately report to the police students who distribute and/or deal in drugs, or anybody who puts the students in danger..

Rav Zalmanovitz insists that the only way to deal with such situations is by proper education, and it is therefore the educators who need to be responsible for minimizing the drug usage, and for dealing with the legal issues. Police involvement, with student users, will just exacerbate the situation and increase usage and addiction levels. (source: Mynet)