While acute cannabis intoxication can induce short-term psychotic symptoms, the long-term effects of cannabis use on chronic psychotic illnesses remain controversial due to ethical constraints preventing experimental studies and the limitations of observational research in establishing causality. This chapter begins with a review of evidence from causally informative, quasi-experimental studies, including co-relative control and cannabis legalization studies, which suggest the causal effects of cannabis use on risk of psychosis are either modest or substantial only for a vulnerable subset of the population. We explore this concept of differential vulnerability by reviewing evidence investigating whether cannabis use characteristics (frequency, potency, age of onset) and indicators of psychosis-proneness (genetic risk, history of psychotic symptoms, other environmental risk factors) moderate the relationship between cannabis use and psychosis. Results are mixed, with some evidence supporting a threshold model such that the effect of cannabis use on risk for psychotic disorders is elevated for individuals both in the general population and with indicators of psychosis-proneness who engage in severe use patterns. We conclude by proposing future research directions to address current limitations and enhance our understanding of the nuances of this complex relationship, with the aim of generating actionable insights for clinicians and policymakers.