Bay of Plenty schools have stood down, suspended or permanently excluded misbehaving pupils 389 times this year.
About 15 per cent of cases were drugs-related, with cannabis the main culprit.
Education Ministry figures released under the Official Information Act to the Bay of Plenty Times show of the 59 drug-related incidents, eight students - all aged under 16 - were permanently dismissed from local schools.
The number of disciplinary actions for drug offences has fallen since 2009.
Otumoetai College principal Dave Randell said students with drug issues needed to be dealt with on a case-by-case basis.
"Sometimes school is the only place for kids ... and sometimes parents ask for a stand-down.
"Other kids, you know if you send them home for three days they'll be on the streets for three days because no one cares about them."
Mr Randell said it was often more beneficial to use alternatives like restorative justice programmes, where drug counselling was offered, rather than forcing pupils from school.
Nationally, misbehaving pupils were stood down, suspended or permanently excluded more than 17,500 times between January 1 and October 16 this year. Nearly 2000 student disciplinary cases involved drugs. About 10 per cent resulted in permanent exclusion or expulsion.
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Secondary Principals Association president Patrick Walsh said though numbers had fallen in recent years, drugs remained a serious issue. Cannabis was the most common, but more students were using synthetic cannabis products or "party pills", he said.
Case numbers peaked two years ago. More than 3000 disciplinary incidents involving drugs were reported to the Education Ministry, with more than 350 students permanently excluded. This was up from about 2700 cases in 2009, including 262 expulsions or exclusions.
However, Mr Walsh warned that drug problems in schools had not diminished: "It's just being masked because schools are dealing with it in different ways."
More schools were now using restorative justice programmes before stand-downs or suspensions were enforced, Mr Walsh said. For example, the student may undertake drug counselling, apologise to the school and their peers and take on community work.
"In terms of the long-term rehabilitative effect on the student, it's better to keep them in school and try and work with their problem rather than expel or exclude them."
Principal Youth Court Judge Andrew Becroft - an advocate of restorative justice programmes for youth - has previously said keeping students in education would help lower the crime rate.
Keeping students engaged in learning is also a top priority for the Education Ministry.
"All learners must be present at school so they can participate and engage in learning," senior manager Jim Greening said.
Mr Walsh also warned of the effects of drug use on student learning: "Often they have short-term memory, they can become aggressive [and] socially isolated."
General lethargy, a lack of application to studies and disengagement with co-curricular activities such as sport were other common side-effects.
Police may become involved in drug cases, with parents called in to family group conferences.
"Either the student is suspended or stood down, or alternatively they go to restorative justice and they contact drug rehabilitation programmes."