A brief history of the therapeutic uses and legal problems of cannabis as well as the component cannabinoids is given. This is followed by a discussion of drug development from Delta (1)-tetrahydrocannabinol and its synthetic analogues. The controversy of whether the pharmacological effects are of central or peripheral origin is included. Then, the potentials for the development of new drugs based on the cannabinoid structure for the treatment of pain, inflammation, and related conditions are outlined. It is concluded that the central activity of cannabinoids is confirmed and that the presence of a C-5 hydroxy group confers potent peripheral activity.