The report examined an issue that until recently was a taboo topic in the region. Politicians, desperate for measures to control drug-linked violence, are now open to legalization.
The report does not make specific proposals, but looks at different scenarios in which countries could handle the drug trade blamed on scores of deaths.
"Never before has a multilateral organization engaged in such an inclusive and intellectually legitimate analysis of drug policy options," said Ethan Nadelmann, executive director of the Drug Policy Alliance, the largest US group pushing for reforming drug policies in the United States.
"It would have been inconceivable just two years ago that the OAS -- or any multilateral organization -- would publish a document that considers legalization, decriminalization and other alternatives to prohibitionist policies on an equal footing with status quo policies."
According to Nadelmann, "political pressures by the US and other governments would have made that impossible."
The new focus on alternatives to prohibition reflects the "unhappiness" of Latin Americans toward a US policy that continues to focus on crop eradication and militarized crackdowns, said Peter Hakim at the Inter-American Dialogue, a leading Washington think tank.
"Legalization is one alternative. I don't think it's going to really be widely adopted, but is a way of getting the debate started," he said.
OAS Secretary General Jose Miguel Insulza traveled to Bogota to personally hand the report to Colombian President Juan Manuel Santos.
Santos, a key US ally in Latin America, is also one of the leading voices in calling for a fresh look at counter-narcotics policies.
According to the report, the regulation of some drugs would allow governments to reassign resources to the prevention and treatment of addicts.