I'd throw in a LOT of anecdata for this one. For agitating full blown psychosis, few things are better than the array of legal highs. Where MJ (alone) has negatively effected the people I've known, it's always been down to some anxiety disorder.

If I were to start armchair theorising, I'd say it is because of cannabis' effect on the "linguistic center" of the brain. Couple this with nicotine - similar effect to cocaine in that it reduces the activity of neurotransmitter depletion enzymes - and you have serious potential for wild ideas that could interact with underlying issues to create disturbing problems. From the reclusive shut in, to the raging paranoiac, I've seen it all and I've often thought that the prevailing notion that the drug is benign is downright wrong. It is a drug. A very powerful drug. One to be respected and used wisely, and left the hell alone if it doesn't 'work' for you. But I agree wholeheartedly that it should not be criminalised.

To reply to the comment below also.

The substance of the cannabis-schizophrenia claims is largely based on Nordic research (given the extensive surveys carried out as part of Armed Forces programs). Typically (or at least in the study I have read), the association is based on around 10 cases in 10,000. Note that these are only the people who tested positive in their bloodstream, not those who (sensibly) stopped taking drugs a few weeks before joining the army.

After controlling for various factors, they found a significant association between marijuana use and later diagnosis of schizophrenia. I believe they used linear regression, rather than something more appropriate like survival analysis.

The interaction with anxiety disorders I am much less familiar with, can you provide some links (preferably to the original papers, even if they're paywalled)?

Schizophrenia is another one that can become exacerbated by marijuana use.