A drug derived from cannabis has been found to significantly ease chronic anxiety, the most common mental health disorder in Australia.

A small-scale 12-week study by youth mental health organisation Orygen found young people with treatment-resistant anxiety showed an average reduction of 42.6 per cent in the severity of anxiousness and impairment after taking cannabidiol, commonly known as CBD.

Study leader Paul Amminger said participants suffered fewer panic attacks and undertook activities they were previously not able to do, including going to school, attending appointments and socialising.

"That's an amazing change in the group which has had treatment-resistant, longstanding, severe to very severe anxiety," he said.

Patrick McGorry, Orygen's executive director and the study co-investigator, said the results showed CBD could be safe and side effects in the trial group were minimal.

"(CBD) seemed to be effective in successfully treating a group of patients who hadn't responded to anything else," Professor McGorry told AAP.

"It's unlikely there's going to be placebo response to explain this. Even though it's not a randomised trial, which is the only way to prove that something does actually work, it's very encouraging."

The most recent Australian Bureau of Statistics data shows one in five people experienced a long-term mental health disorder in 2020/21, with anxiety the most common group of disorders.

"Anxiety is very prominent in young people and so what it means is that they feel agitated or fearful," Professor McGorry said.

"To avoid that feeling, they can be become very withdrawn and not leave the house and try to avoid exposure to life.

"They can also have panic attacks and more extreme bursts of anxiety too, so it can be quite disabling."

Research indicates about one in two young people did not fully recover from anxiety using mainstream treatments, which include selective serotonin reuptake inhibitor medication and cognitive behavioural therapy.

The pilot involved 31 patients aged between 12 and 25 being treated for 12 weeks with cannabidiol.

All had been diagnosed with anxiety disorders that did not significantly improve after at least five sessions with a cognitive behavioural therapist.

Participants were started on 200 milligrams of CBD per day via capsule, which was increased to 400mg over a week. The doses for those whose anxiety did not improve were increased in 200mg increments up to 800mg a day.

Participants were also offered bi-weekly therapy.

Side effects most commonly reported were mild sedation and mild fatigue, which occurred when dosages were increased but usually eased after a few days.

Prof Amminger noted CBD did not contain the psychoactive substance tetrahydrocannabinol, or THC, from cannabis and therefore did not get recipients "high".

"It's important to stress that cannabidiol does not induce any significant side effects or lead to the emergence of any neurological or psychiatric manifestations," he said.

Further investigation into the effectiveness of CBD for treating anxiety is needed and the researchers are looking for funding from the National Health and Medical Research Council to conduct a randomised controlled trial.

The authors have also secured funding for a separate clinical trial testing CBD as a preventative treatment for psychosis and schizophrenia.