The link between cannabis and psychosis has often been debated with polarized views on the topic. There is substantial epidemiological evidence showing that cannabis increases the risk of psychosis, whereas other research suggests that schizophrenia patients self-medicate with the substance. These conflicting accounts may at least be partially explained by the two phytocannabinoids cannabidiol (CBD) and Δ(9)-tetrahydrocannabinol (THC) and their opposing actions on schizophrenia-related symptoms. In the present review we will first focus on how traditional rodent models of schizophrenia have been used to improve our understanding of the propsychotic actions of THC and the antipsychotic actions of CBD. We will also review novel rodent models used to address genetic vulnerability to cannabis-induced schizophrenia and show that specific genes are being uncovered that modulate cannabinoid action (e.g. the schizophrenia susceptibility gene neuregulin 1). We will also review rodent studies that have addressed interactions between THC and CBD. These animal studies underscore great complexity with some studies showing that CBD antagonises the neurobehavioural effects of THC, while others show the opposite, that CBD potentiates the actions of THC. Various mechanisms are put forth to explain these divergent effects such as CBD antagonism at central CB1 receptors or that CBD inhibits proteins that regulate THC disposition and metabolism (e.g. the ABC transporter, P-glycoprotein).