Cannabis is one of the most widely used illicit psychoactive drugs. Both mechanisms of action of cannabinoids and adverse effects of cannabis use are reviewed in this paper. While the effects of cannabinoids have been studied for a long time, a marked progress in knowledge of molecular mechanisms of their action was possible following confirmation of cannabinoid receptors in 1988 and discovery of the endogenous cannabinoid system in 1992. Δ⁹-tetrahydro¬cannabinol (Δ⁹-THC) is the major psychoactive component of marijuana. Pharmacokinetics of Δ⁹-THC is strongly influenced by its accumulation in fatty tissues. Acute effects of cannabis on psychic, psychomotor and physiological functions are well known; however, there is little information about the effects of chronic cannabis use. Δ⁹-THC acts as agonist of cannabinoid receptors CB₁ and CB₂, which are coupled through G proteins, negatively to adenylate cyclase and to voltage-dependent calcium channels, positively to mitogen-activated protein kinase or to potassium channels. Activation of cannabinoid receptors CB₁ in the brain is responsible for psychotropic effects of cannabinoids. The effect of cannabinoids on signal transduction is mainly inhibitory. Both negative actions of Δ⁹-THC and therapeutic effects of cannabinoids and their analogues are discussed.