Recent epidemiological studies and advances in understanding of brain cannabinoid function have renewed interest in the long-recognized association between cannabinoids and psychosis. This chapter presents evidence supporting and refuting the association between cannabinoids and psychosis. Cannabinoids can induce acute transient psychotic symptoms or an acute psychosis in some individuals. What makes some individuals vulnerable to cannabinoid-related psychosis is unclear. Also clear is that cannabinoids can also exacerbate psychosis in individuals with an established psychotic disorder, and these exacerbations may last beyond the period of intoxication. Less clear is whether cannabis causes a persistent de novo psychosis. The available evidence meets many but not all the criteria for causality, including dose-response, temporality, direction, specificity, and biological plausibility. On the other hand, the large majority of individuals exposed to cannabinoids do not experience psychosis or develop schizophrenia and the rates of schizophrenia have not increased commensurate with the increase in rates of cannabis use. Similar to smoking and lung cancer, it is more likely that cannabis exposure is a component cause that interacts with other factors, for example, genetic risk, to "cause" schizophrenia. Nevertheless, in the absence of known causes of schizophrenia, the role of component causes such as cannabis exposure (exogenous hypothesis) is important and warrants further study. There is also tantalizing evidence from postmortem, neurochemical, and genetic studies suggesting CB1 receptor dysfunction (endogenous hypothesis) in schizophrenia that warrants further investigation. Further work is necessary to identify those factors that place individuals at higher risk for cannabinoid-related psychosis, to identify the biological mechanisms underlying the risks and to further study whether CB1 receptor dysfunction contributes to the pathophysiology of psychotic disorders.