First Nations people in New South Wales are almost four times more likely to be charged for cannabis possession compared to non-Indigenous people, according to a recent report by the state's Bureau of Crime Statistics and Research.

The report, released this week, found a 32.3 per cent discrepancy between the groups concerning incidents with police.

In 2020, NSW introduced the Cannabis Cautioning Scheme to "formalise police discretionary powers regarding the issuing of cautions for minor drug offences", according to the Bureau.

Under the scheme, adult offenders who possessed a small amount of the drug for personal use only, identified themselves to police and admit the offence, had not been convicted of a drug, violent or sexual offence, and had not received two or more past cautions involving cannabis possession - among other criteria, are eligible for a caution. Diversions and support is offered in place of entering the courts.

Between January 2017 and February 2020, 38,813 cases involving 27,127 adult offenders saw 11.7 percent of Indigenous adults cautioned, rather than charged, compared to 43.9% for non-Indigenous people.

The report indicated there were factors that could go some way towards explaining the gap, including Aboriginal people may be less likely to admit to the offence because of legal advice or low levels of trust in the police, or may be more likely to have a prior conviction which would make them ineligible.

The report recommended more research into police bias.

"The unexplained component makes up the remaining 2.9 p.p. (or 8 per cent) of the raw difference, implying that Aboriginal people are still cautioned less than non-Aboriginal people even when both groups have the same observable characteristics," the report read.

"While we find that only a small amount of the disparity can be explained by differences in how Aboriginal offenders are dealt with by police (versus their characteristics), not receiving a caution could have significant costs for affected individuals.

"The fact that over the 3-year period examined, more than 6,000 Aboriginal people caught with cannabis were ineligible for the Scheme is concerning."

The report noted that "raw cautioning disparities" between Aboriginal and non-Aboriginal people could potentially be reduced in New South Wales if consideration was given to relaxing or removing the requirement that offenders must have no prior drug offences.