Natural products make up a large proportion of medicine available today. Cannabinoids from the plant Cannabis sativa is one unique class of meroterpenoids that have shown a wide range of bioactivities and recently seen significant developments in their status as therapeutic agents for various indications. Their complex chemical structures make it difficult to chemically synthesize them in efficient yields. Synthetic biology has presented a solution to this through metabolic engineering in heterologous hosts. Through genetic manipulation, rare phytocannabinoids that are produced in low yields in the plant can now be synthesized in larger quantities for therapeutic and commercial use. Additionally, an exciting avenue of exploring new chemical spaces is made available as novel derivatized compounds can be produced and investigated for their bioactivities. In this review, we summarized the biosynthetic pathways of phytocannabinoids and synthetic biology efforts in producing them in heterologous hosts. Detailed mechanistic insights are discussed in each part of the pathway in order to explore strategies for creating novel cannabinoids. Lastly, we discussed studies conducted on biological targets such as CB1, CB2 and orphan receptors along with their affinities to these cannabinoid ligands with a view to inform upstream diversification efforts.