Just because you smoked some when you were young, doesn't mean you can't take a firm stance with your son now.
And I wouldn't take too lightly the side effects you mention - including paranoia and being horny - because depression, thoughts of suicide, or illicit unsafe sex can occur with what you're describing. Give the devil an inch, and he'll become the whole ruler. Bear in mind your son may throw alcohol or other drugs into the mix, and he may fight or have unsafe sex or do a number of dangerous things he wouldn't do under normal circumstances.
There are no safe street drugs - just drugs that some people are more tolerant of socially. Especially those who used to dabble in them.
You should also consider the possibility that the weed he buys might be contaminated or tampered with something stronger. Drug dealers don't want casual users who smoke a little weed now and then...then want hard-core addicted users who are return customers. Unless you can promise your son that the pot he buys is always "pure", and that he will always get high by himself in a padded room and remain completely in control of himself and his habits, then you need to take a more proactive approach here....and don't feel like a hypocrite while you do it.
When I was in high school one of my friends was killed because he was driving while he was high....my first husband was so addicted that even on into his 30's and 40's (we were long since divorced before then), he would get high daily, bouncing from job to job and miserable relationship to miserable relationship, because of a weed habit he acquired when he was 15. I'm telling you, it sounds as if you're taking this far too lightly.
You need to share the potential consequences with your son, along with a no-tolerance policy. That you expect more of him, he is capable of more, and you won't stand by while he makes decisions that are foolish and far more potentially destructive to his life than he may realize. You have apparently caught it early, be thankful.
You state you don't like the idea of grounding, and that is ineffective. Maybe so. However, you're going to have to figure out a way to discipline him and force him to become accountable again. Trust is something that has to be earned, and you're going to have to lay some clear ground rules over the communication between the two of you whenever he comes and goes, and you may have to lay some ground rules about the company he keeps. You're doing this for his own welfare. Until he realizes the import of what he's doing, he doens't need a parent who is a best buddy...he needs a warden who is going to help straighten him out. I'm not suggesting physical or verbal abuse....but firmness and consistency.
I would take away the car for a short period of time (2-3 weeks?) Make him walk to and from the busstop and ride the bus like a younger kid to school every day. We did this with our teenager when he had a temper tantrum and kicked in his bedroom door. It was most effective. The inconvenience and humiliation of reverting back to the bus after being the cool kid with a car does make an impact.
Bottom line - you may take a different approach, but please be firm, please make sure your son is informed of ALL the potential consequences, and don't take this lightly simply because you dabbled in it 20 years ago.