Pot franchise unlikely at Virgin: Richard Branson

War on drugs has been a disaster: Branson

While calling for the decriminalization of drugs, Sir Richard Branson told CNBC on Wednesday he does not see the Virgin Group getting into the business of legalized pot.

"I think it's unlikely," the billionaire entrepreneur said in a "Squawk Box" interview. But he has said in the past pot should be legalized and taxed. Washington and Colorado are the only two U.S. states where the recreational use and sale of marijuana is legal.

Read MoreBeverly Hills Cannabis Club: High-net-worth pot?

"When alcohol prohibition happened in America, it created Al Capone," Branson said. "The same situation has happened with drugs."

Branson is part of the Global Commission on Drug Policy—a coalition of global influences, including former UN Secretary-General Kofi Annan, former Secretary of State George Shultz, and former Fed Chairman Paul Volcker—that wants to treat drug dependency as a health problem.

"We believe the War on Drugs, which has been going on for 50 years now, has been a disaster," he said. "It's affected hundreds of thousands of people adversely. The way to deal with it in the future is to treat drugs as a health problem and not a criminal problem. In countries that do that, they are getting on top of the drug problem."

(Watch video: Branson also pushes for peace in Ukraine)

"I would like to see hundreds of thousands of people languishing in American prisons and prisons around the world for smoking pot be released. It's ruining their lives, and it's not doing any good for society generally," he said.

—By CNBC's Matthew J. Belvedere