The use of medicinal cannabis to improve mental health is increasing globally, both in clinical settings and through self-medication. This involves a variety of products containing ∆9-tetrahydrocannabinol (THC), cannabidiol (CBD), THC + CBD combinations, or derivatives. This review provides an up-to-date overview of the positive and negative effects of medicinal cannabis on mental health diagnoses and related symptoms of the Diagnostic and Statistical Manual of Mental Disorders 5th Edition. Searches in PubMed, PsycInfo, Embase, and the Cochrane Library (October 2023 and July 2024) identified 18,341 studies, of which 49 controlled studies from 15 different countries were included. All studies focused on treatment-seeking participants using medicinal cannabis for (symptoms of) their mental health diagnosis. Included diagnoses were anxiety disorders, tic disorders, autism spectrum disorder, attention-deficit hyperactivity disorder, obsessive-compulsive disorders, anorexia nervosa, schizophrenia, psychosis, substance use disorders, insomnia, and bipolar disorders. Varying product compositions showed different effects. Most consistently, high doses of CBD were followed by some acute relief in anxiety, while CBD + THC combinations alleviated withdrawal in cannabis use disorder and improved sleep. In clinical trials, THC was associated most with dose-dependent adverse events and, in some cases, deterioration of primary study outcomes, e.g., in psychosis. In naturalistic studies, participants who used THC reported symptom improvement following usage. Risks of bias across studies were prevalent, and no study found long-lasting medicinal effects or improvement. Overall, medicinal cannabis may provide short-term relief for certain symptoms but is not a cure or without mental health risks.