Yeast expression of human G-protein-coupled receptors (GPCRs) can be used as a biosensor platform for the detection of pharmaceuticals. Cannabinoid receptor type 1 (CB1R) is of particular interest, given the cornucopia of natural and synthetic cannabinoids being explored as therapeutics. We show for the first time that engineering the N-terminus of CB1R allows for efficient signal transduction in yeast, and that engineering the sterol composition of the yeast membrane modulates its performance. Using an engineered cannabinoid biosensor, we demonstrate that large libraries of synthetic cannabinoids and terpenes can be quickly screened to elucidate known and novel structure–activity relationships. The biosensor strains offer a ready platform for evaluating the activity of new synthetic cannabinoids, monitoring drugs of abuse, and developing therapeutic molecules.