Objectives To review the known impacts of recreational cannabis legalization on mental health and substance use, in the context of recent changes in the status of cannabis laws in Canada. Methods PubMed database was systematically searched using various terms regarding mental health and cannabis legalization. Two independent investigators then assessed a total of 272 titles and abstracts and 11 articles were ultimately found eligible for review. Results Most studies measuring the impact of legalization on cannabis use showed an increase in cannabis use after the legalization. Moreover, no study demonstrated a reduction of cannabis use after legalization of recreational cannabis. All three studies regarding health care contacts demonstrated an increase in the number of cannabis-related emergency department visits after cannabis legalization. Two studies revealed reduction of perceived risks associated with cannabis after legalization, while another study offered opposite results. To interpret these observational results accurately, we also need to consider the long-term trends that prevailed before the changes in cannabis laws. Conclusions The quantity of evidence on the impacts of recreational cannabis legalization on mental health and substance use is limited. Further research is needed to strengthen these results and explore the effects of cannabis legalization on other mental health issues such as psychosis.