Yes, low level drug users and dealers should receive counseling instead of jail time. US prisons and jails are already overcrowded, and some of this burden would be lessened if non-violent offenders were given counseling and let go. This would free up quite a bit of capital to be used elsewhere to strengthen the economy.
Our prisons are so crowded already, it doesn't make sense to put people into that environment when they haven't committed a serious crime. The real damage they are doing is to themselves and to those that they deal to. With some counseling, maybe there is a chance they can overcome addiction and see how much better life can be if they make an honest living.