Youth cannabis use is associated with psychiatric problems, cognitive impairment, educational underachievement, and unemployment. Individuals with genetic liabilities, such as carriers of the catechol-O-methyltransferase (COMT) Val allele, may be particularly sensitive to the effects of cannabis use, but evidence for gene-by-environment (GxE) interaction is inconclusive. It is also unclear if youth cannabis use causes negative outcomes, or if unmeasured factors are responsible for both cannabis use and functional problems. Two studies were conducted to elucidate the nature of the association between youth cannabis use and young adult functioning. Both studies were based on a prospective sample of 1512 twins from the Minnesota Twin Family Study who were assessed six times from age 11 to age 29. The first study examined whether adolescent-onset cannabis use interacts with genetic factors to increase psychotic traits and impair attention and memory at age 29. The results revealed that adolescent-onset cannabis use is associated with higher levels of psychotic traits and worse memory regardless of genotype, with no evidence for GxE interaction. The second study examined if twins discordant on youth cannabis use disorder (CUD) have different psychiatric, cognitive, educational, and occupational outcomes at ages 20, 24, and 29. This design controlled for genetic and other familial confounds shared between twins. Analyses showed that many associations between youth CUD and psychosocial problems were attributable to familial confounding. Still, there was residual evidence for a potential causal effect of youth CUD on the development of other illicit drug use disorders and on deficits in numerical reasoning, even after controlling for premorbid functioning.