BACKGROUND: Several epidemiological studies have shown that cannabis; the most widely used illegal drug in the world, is associated with schizophrenia spectrum disorders (SSD). AIMS: To assess the characteristics of cannabis use and its association with SSD in a cohort of psychiatrically ill patients and discuss the implications for policy development METHODS: This is a retrospective analytical study of a cohort of psychiatric patients who received treatment in the psychiatry unit of the Provincial General Hospital, Ratnapura, Sri Lanka over five years (2000 - 2004). The schizophrenia spectrum disorders defined in this article include schizophrenia and the schizoaffective disorders. RESULTS: A total of 3644 patient records were analyzed. The percentage of self reported life time cannabis (LTC) use was 2.83% (103, all males). Sixteen percent (576) of the total cohort was diagnosed with SSD by 2009. Male sex and LTC use were significantly associated with SSD (p < 0.01 and 0.001 respectively). In the majority (91.5%), cannabis use preceded the diagnosis. There were 17(16.5%) patients diagnosed as cannabis induced psychosis and 7 (41.2%) of them were subsequently diagnosed as SSD. This group was significantly more likely to have had a past psychiatric consultation, but other demographic and clinical correlates did not differ from the rest of the LTC users. CONCLUSIONS: Self reported LTC use was strongly associated with being diagnosed with SSD. However we could not identify a particular subgroup of users that are at increased risk to recommend targeted primary prophylaxis. The policy implications of this observation are discussed.