diff --git a/src/cli/init.rs b/src/cli/init.rs
index 496c75c70..0b5f58d3b 100644
--- a/src/cli/init.rs
+++ b/src/cli/init.rs
@@ -1,7 +1,9 @@
 use crate::{config::get_default_author, consts};
+use anyhow::anyhow;
 use clap::Parser;
 use minijinja::{context, Environment};
 use rattler_conda_types::Platform;
+use std::io::{Error, ErrorKind};
 use std::{fs, path::PathBuf};
 
 /// Creates a new project
@@ -40,7 +42,7 @@ const GITIGNORE_TEMPLATE: &str = r#"# pixi environments
 
 pub async fn execute(args: Args) -> anyhow::Result<()> {
     let env = Environment::new();
-    let dir = args.path;
+    let dir = get_dir(args.path)?;
     let manifest_path = dir.join(consts::PROJECT_MANIFEST);
     let gitignore_path = dir.join(".gitignore");
 
@@ -53,7 +55,15 @@ pub async fn execute(args: Args) -> anyhow::Result<()> {
     fs::create_dir_all(&dir).ok();
 
     // Write pixi.toml
-    let name = dir.file_name().unwrap().to_string_lossy();
+    let name = dir
+        .file_name()
+        .ok_or_else(|| {
+            anyhow!(
+                "Cannot get file or directory name from the path: {}",
+                dir.to_string_lossy()
+            )
+        })?
+        .to_string_lossy();
     let version = "0.1.0";
     let author = get_default_author();
     let channels = if args.channels.is_empty() {
@@ -93,3 +103,53 @@ pub async fn execute(args: Args) -> anyhow::Result<()> {
 
     Ok(())
 }
+
+fn get_dir(path: PathBuf) -> Result<PathBuf, Error> {
+    if path.components().count() == 1 {
+        Ok(std::env::current_dir().unwrap_or_default().join(path))
+    } else {
+        path.canonicalize().map_err(|e| match e.kind() {
+            ErrorKind::NotFound => Error::new(
+                ErrorKind::NotFound,
+                format!(
+                    "Cannot find '{}' please make sure the folder is reachable",
+                    path.to_string_lossy()
+                ),
+            ),
+            _ => Error::new(
+                ErrorKind::InvalidInput,
+                "Cannot canonicalize the given path",
+            ),
+        })
+    }
+}
+
+#[cfg(test)]
+mod tests {
+    use crate::cli::init::get_dir;
+    use std::path::PathBuf;
+
+    #[test]
+    fn test_get_name() {
+        assert_eq!(
+            get_dir(PathBuf::from(".")).unwrap(),
+            std::env::current_dir().unwrap()
+        );
+        assert_eq!(
+            get_dir(PathBuf::from("test_folder")).unwrap(),
+            std::env::current_dir().unwrap().join("test_folder")
+        );
+        assert_eq!(
+            get_dir(std::env::current_dir().unwrap()).unwrap(),
+            PathBuf::from(std::env::current_dir().unwrap().canonicalize().unwrap())
+        );
+    }
+
+    #[test]
+    fn test_get_name_panic() {
+        match get_dir(PathBuf::from("invalid/path")) {
+            Ok(_) => panic!("Expected error, but got OK"),
+            Err(e) => assert_eq!(e.kind(), std::io::ErrorKind::NotFound),
+        }
+    }
+}