Abstract: Insomnia is highly prevalent among military veterans, with rates nearly double that of civilian populations. Insomnia typically co-occurs with other psychological problems, including substance use (e.g. cannabis) and perceived stress. Much of the research focused on insomnia, stress and cannabis use explores cannabis as a sleep aid and a mechanism for stress relief. However, recent theoretical and empirical evidence suggests a dynamic interplay between insomnia, cannabis use and perceived stress, yet few longitudinal studies exist. Using a sample of 1105 post-9/11 veterans assessed over four time points across 12 months, we used latent difference score modelling to examine proportional change between insomnia, perceived stress and cannabis use. Results revealed a complex interplay between all three constructs. In particular, we show that higher prior levels of insomnia are associated with greater increases in perceived stress, and greater prior levels of stress are associated with greater increases in cannabis use. Perhaps more importantly, our results also point to cannabis use as a catalyst for greater increases in both stress and insomnia severity. Our results suggest there may be both benefits and costs of cannabis use among veterans. Specifically, for veterans who experience chronic sleep problems, perceived stress may become overwhelming, and the benefit of stress reduction from increased cannabis use may come at the cost of increasing insomnia symptomology.