"We're not talking about decriminalization or legalization," MacKay said following the weekly Conservative caucus meeting on Parliament Hill.
"The Criminal Code would still be available to police, but we would look at options that would give police the ability, much like the treatment of open liquor ... to ticket those types of offences," he said.
Prime Minister Stephen Harper is open to such an approach, he added. The Justice Department is examining it and could present draft legislation.
MacKay has hinted in the past that such a move was under consideration. The country's police chiefs —as well as some Tory caucus members — have long called for ticketing people for pot possession instead of laying criminal charges.
But MacKay has also been among the Conservatives' fiercest critics of Liberal Leader Justin Trudeau's stance on the issue. Trudeau supports the legalization of marijuana, a position the Tories have mocked with gleeful abandon.
MacKay accused the Liberal leader of promoting drug use to elementary schoolchildren last fall after Trudeau answered a question about his marijuana policies from First Nations high school students in Sioux Valley, Man. There were elementary school kids in the audience at the time.
"Justin Trudeau's comments to elementary school children regarding the legalization of marijuana is not only bad policy, but is completely unacceptable and grossly inappropriate," MacKay said in a statement at the time.
"He's directly delivering a message to children now that recreational drug use is OK."
In fact, Trudeau had responded to the question in Sioux Valley by saying that marijuana was dangerous for young people. He added that he believed that regulating pot would help keep it out of the hands of children.
The Liberal leader called on MacKay to retract the comments, calling them "shameful."
The Liberal Party took great delight Wednesday in MacKay's apparent change of heart on the issue, tweeting: "Denial, anger, and now acceptance. Conservatives finally agree with @JustinTrudeau on reforming ineffective marijuana laws."
Trudeau wasn't in the House of Commons on Wednesday, but Liberal MP Sean Casey said the Conservative shift "is almost surprising, but it really isn't because this government will do or say anything to win" as a 2015 federal election looms.
"It's laughable how vicious and fact-free the attacks have been, and now this supposedly principled group has apparently read their own internal polls that have indicated that Mr. Trudeau is absolutely on the same page as most Canadians on this issue," Casey said.
A spokeswoman for MacKay said in a later statement that regardless of the outcome of the review, the government would not take the "Justin Trudeau approach."
”The Liberal leader's approach will inevitably make smoking pot a normal activity for Canadians all the while increasing access to marijuana which will hurt our communities, our families and our children," the statement said.
As recently as last Friday, a Tory backbencher railed against Trudeau's marijuana stance as he mocked NDP Leader Thomas Mulcair's suggestion that he'd be open to forming a coalition with the Liberals.
"Canadians know what a Liberal-led NDP high-tax coalition would mean: a soft-on-crime agenda; repealing mandatory prison sentences for violent offenders; a reckless plan to legalize marijuana, making it easier for children to smoke," Saskatchewan's David Anderson said in a member's statement in the Commons.
"When will the anti-trade leader of the official opposition stop passing the pipe in an effort to close a deal with the pro-drug trade, high on smiles, low on substance, leader of the third party?"
Under the Criminal Code as it now stands, anyone convicted of possessing small amounts of marijuana can be jailed for up to five years. First-time offenders can face fines of up to $1,000 or as much as six months in jail.
Follow Lee-Anne Goodman on Twitter at @leeanne25
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