Cannabidiol (CBD) is a non-intoxicating cannabinoid derived from Cannabis sativa. CBD initially drew scientific interest due to its anticonvulsant properties but increasing evidence of other therapeutic effects has attracted the attention of additional clinical and non-clinical populations, including athletes. Unlike the intoxicating cannabinoid, Δ9-tetrahydrocannabinol (Δ9-THC), CBD is no longer prohibited by the World Anti-Doping Agency and appears to be safe and well-tolerated in humans. It has also become readily available in many countries with the introduction of over-the-counter “nutraceutical” products. The aim of this narrative review was to explore various physiological and psychological effects of CBD that may be relevant to the sport and/or exercise context and to identify key areas for future research. As direct studies of CBD and sports performance are is currently lacking, evidence for this narrative review was sourced from preclinical studies and a limited number of clinical trials in non-athlete populations. Preclinical studies have observed robust anti-inflammatory, neuroprotective and analgesic effects of CBD in animal models. Preliminary preclinical evidence also suggests that CBD may protect against gastrointestinal damage associated with inflammation and promote healing of traumatic skeletal injuries. However, further research is required to confirm these observations. Early stage clinical studies suggest that CBD may be anxiolytic in “stress-inducing” situations and in individuals with anxiety disorders. While some case reports indicate that CBD improves sleep, robust evidence is currently lacking. Cognitive function and thermoregulation appear to be unaffected by CBD while effects on food intake, metabolic function, cardiovascular function, and infection require further study. CBD may exert a number of physiological, biochemical, and psychological effects with the potential to benefit athletes. However, well controlled, studies in athlete populations are required before definitive conclusions can be reached regarding the utility of CBD in supporting athletic performance.