Lots of schools have zero tolerance on selling drugs. They may have a different attitude to possession of drugs. This is what you need to negotiate on to avoid a permanent exclusion. Also, schools exclude, local authorities do not. So you would not know what schools are doing and you would not know about managed moves either.
He, and you, also need to grow up, quickly. I would be worried abut your "sorry little bunny" comment too because it gives the impression that he can do no wrong and is a baby. He needs to assure the school he is not doing drugs. I would imagine he is, so you both have work to do if he wants to stay there. He will have to really mean what he says and stay off the drugs. If you can get them to keep him, you will have to abide by their rules, but be clear he did not attempt to sell drugs. Negotiate the best you can but do not go in and expect an easy ride. You may have to plead for him and you will really have to get him to understand that this is his last chance.
The school will not resolve his drug habit. They may watch him like a hawk. He has brought it on himslef so he will have to deal with the consequences in school. If he does not like it, then yes, he will have to leave. But nowhere will tolerate drugs on their premises. So, he needs to grow up and behave. If he cannot, then finding another school will be tough. They may be able to negotiate a managed move. However, any new school will not be too accommodating either.
I am always at a loss to understand why children are so stupid as to take drugs onto school premises. I think he is more of an unintelligent thick bunny personally. There are weekends and evenings for smoking, if you are happy to stick your head in the sand. Both of you seem very laid back about it, so maybe a bit of tough love would come in handy, for both of you.