Cannabis use is associated with poor outcome in existing schizophrenia and may precipitate psychosis in individuals with preexisting liability. To investigate the overall effect size and consistency of the association between cannabis and psychosis, a meta-analysis from prospective studies was carried out. The pooled odds ratio was 2.1 (95% CI: 1.7-2.5) and could not be explained by confounding or reverse causality. Evidence suggests that cannabis is a component cause in the development and prognosis of psychosis, in which mechanisms of gene-environment interaction are most likely to explain this association. Potential new methods to directly link genetic liability to the effects of cannabis are discussed.