The present study prospectively evaluated cannabis use, abuse, and dependence in relation to the development of panic attacks and panic disorder. Participants at the start of the study were adolescents (n=1709) with a mean age of 16.6 years (SD=1.2; time 1) and were re-assessed 1 year later (time 2) and then again as young adults (time 3; mean age=24.2 years, SD=0.6). Results indicated that cannabis use and dependence were significantly prospectively associated with an increased odds for the development of panic attacks and panic disorder. However, cannabis was not incrementally associated with the development of panic after controlling for daily cigarette smoking. The theoretical and clinical implications of these findings are discussed.