As the rate of cannabis induced psychosis increases in many parts of the world, it is important to understand the pathophysiology of this disorder. In this review we will attempt to connect cannabis induced physiological changes with new PET data on CB1receptors in patients with schizophrenia to provide a theoretical mechanisms of cannabis-induced psychosis in adolescence. Wepropose that adolescent cannabis induced psychosis is possibly induced by chronic usage of cannabis during an important neurodevelopmental timeframe. This induces CB1 receptor down regulation due to tolerance, a similar pathophysiological state seenin patients with schizophrenia. The risk of developing cannabis induced psychosis is proposed to be a combination of whencannabis use is first initiated, potency of cannabis, frequency of usage and genetic predisposition. After reviewing these steadilyincreasing data, we propose future studies and policy changes to further understand this mechanism and decrease the incidence ofadolescent cannabis induced psychosis.