Aims. To document patterns of cannabis use and dependence from late-adolescence through to the mid-twenties; to describe perceived consequences of cannabis use among young people; and to consider policy implications of these findings. Methods. This was a longitudinal study of the Dunedin Multidisciplinary Health and Development Study birth cohort with repeated measures of cannabis use at ages 18, 21 and 26 years. Results. Twelve month prevalence rates of cannabis use (just over 50%) and dependence (just under 10%) remained stable between age 21 and 26 years, contrary to an expected decline. Cannabis dependence, as distinct from occasional use, was associated with high rates of harder drug use, selling of drugs and drug conviction. Cumulatively, almost 3/4 of our cohort had tried cannabis by age 26. Young people thought the risk of getting caught using cannabis was trivial, and that using cannabis had few negative social consequences. Conclusions. The persistent high rates of cannabis use and dependence among young New Zealand adults raises important issues for policy makers. Current laws are not particularly effective in deterring use. Whereas occasional use does not appear to present a serious problem, cannabis dependence among users is a serious public health issue that warrants immediate action.