We aimed to study the effects of cannabidiol (CBD) in out-patients with early psychosis on clinical metrics of psychosis and cognition and on psychophysiological electroencephalogram (EEG) metrics of psychosis. Adult outpatient subjects with a primary psychotic disorder within approximately five years of psychosis onset were enrolled in a four-week, two-period, randomized, placebo-controlled crossover trial (clinicaltrials.gov NCT02504151). Subjects were randomized in a one-to-one ratio to receive either CBD (oral 800 mg/day) or placebo in the first of two treatment periods in a randomized, double-blind manner. Primary outcome measures assessed were psychosis symptoms measured using the Positive and Negative Syndrome Scale (PANSS); and cognition measured using the MATRICS Consensus Cognitive Battery (MCCB). Secondary clinical outcomes included Clinical Global Impression of Severity or of Improvement (CGI-S, CGI-I) and Quality of Life Scale (QLS). Statistical analyses were conducted using linear mixed models and nonparametric tests. Psychophysiological measures were collected for exploratory EEG analyses. Eight CBD-first and ten placebo-first participants were randomized in this trial which is no longer recruiting. Seven CBD-first and ten placebo-first participants (mean age 25, mean baseline total PANSS 83) were included in the final analyses. Placebo treatment over time (not CBD) was associated with improved total and general PANSS (p = 0.0151 and p = 0.0195). CBD over time was not associated with any significant improvement in positive PANSS (p = 0.0843), negative PANSS (p = 0.5702), CGI-S (p = 0.700), CGI-I (p = 0.927), MCCB composite score (p = 0.895), MCCB neurocognitive subscore (p = 0.132), or QLS total score (p = 0.237). No treatment-related significant adverse events were reported. CBD over time was not associated with significant changes in neural noise measured as LZC (p = 0.482) after adjusting for treatment order. This cross-over pilot study of CBD treatment in patients with early psychosis demonstrated no significant improvement in psychosis symptoms, cognition, or quality of life and exploratory analyses revealed no significant improvement in EEG biomarkers of psychosis. Further investigation into CBD’s antipsychotic potential is needed.