As of August, 2016, in the mobile versions of the Google Classroom app (iOS and Android):

Teachers and students can draw on, highlight, and write notes on documents and PDFs in the Classroom mobile app

https://support.google.com/edu/classroom/answer/6149237?hl=en

This is a terrific feature that adds to the flexibility and usefulness of Google Classroom. Users can now annotate PDFs and Google Drive documents distributed via Google Classroom. How might this be used in your classroom?

• Students can highlight and annotate their work for study purposes without the need to print it out, saving money and avoiding lost work.
• Students can take photos and annotate them for the assignments.
• Distribute digital interactive notebooks and worksheets.
• For students with poor fine motor skills and difficulty hand writing, the annotation feature in Google Classroom allows them to zoom in and write in a big space rather than having to cram writing into smaller spaces which can sometimes happen with paper based activities.
• Annotate with or without a stylus.

As other ideas come up, I will add them to the list. Feel free to share your own!

Below is a video tutorial outlining the features of annotations in Google Classroom from the student’s perspective. The document used is a Google Slides presentation.