Clinical trial data are beginning to emerge with respect to the therapeutic efficacy of cannabis extracts for the treatment of chronic pain. Although there is some evidence of efficacy, a major issue concerns the narrow margin between doses producing therapeutic effects and those producing the "highs" associated with cannabis misuse. In addition, long-term use is associated with an increased risk of psychiatric illness. These negative aspects constrain the doses of cannabis extracts and psychoactive cannabinoids that can be given to patients, and raise the risk that properly conducted clinical trials with too low dosages will impact negatively on subsequent drug development in this field. However, recent research has opened up a number of avenues whereby compounds acting directly upon cannabinoid (CB) receptors may have therapeutic potential. In this review, two such areas are discussed, namely a) the possible use of peripherally acting CB agonists and CB2 receptor-selective agonists for the treatment of pain, and b) the possible utility of CB2 receptor agonists for the prevention of stress-induced exacerbations of skin disorders such as psoriasis. A second area of drug development at present is that of CB1 receptor antagonists/inverse agonists, spearheaded by rimonabant, for the treatment of obesity and as an aid for smoking cessation. An important aspect of these compounds is their efficacy and selectivity, and this is discussed in detail in the present review.