Background and Purpose: We sought to understand why (−)‐cannabidiol (CBD) and (−)‐cannabidiol‐dimethylheptyl (CBD‐DMH) exhibit distinct pharmacology, despite near identical structures.Experimental Approach: HEK293A cells expressing either human type 1 cannabinoid (CB₁) receptors or CB₂ receptors were treated with CBD or CBD‐DMH with or without the CB₁ and CB₂ receptor agonist CP55,940, CB₁ receptor allosteric modulator Org27569 or CB₂ receptor inverse agonist SR144528. Ligand binding, cAMP levels and βarrestin1 recruitment were measured. CBD and CBD‐DMH binding was simulated with models of human CB₁ or CB₂ receptors, based on the recently published crystal structures of agonist‐bound (5XRA) or antagonist‐bound (5TGZ) human CB₁ receptors.Key Results: At CB₁ receptors, CBD was a negative allosteric modulator (NAM), and CBD‐DMH was a mixed agonist/positive allosteric modulator. CBD and Org27569 shared multiple interacting residues in the antagonist‐bound model of CB₁ receptors (5TGZ) but shared a binding site with CP55,940 in the agonist‐bound model of CB₁ receptors (5XRA). The binding site for CBD‐DMH in the CB₁ receptor models overlapped with CP55,940 and Org27569. At CB₂ receptors, CBD was a partial agonist, and CBD‐DMH was a positive allosteric modulator of cAMP modulation but a NAM of βarrestin1 recruitment. CBD, CP55,940 and SR144528 shared a binding site in the CB₂ receptor models that was separate from CBD‐DMH.Conclusion and Implications: The pharmacological activity of CBD and CBD‐DMH in HEK293A cells and their modelled binding sites at CB₁ and CB₂ receptors may explain their in vivo effects and illuminates the difficulties associated with the development of allosteric modulators for CB₁ and CB₂ receptors.Linked Articles: This article is part of a themed section on 8^th European Workshop on Cannabinoid Research. To view the other articles in this section visit http://onlinelibrary.wiley.com/doi/10.1111/bph.v176.10/issuetoc