Japan’s Hemp Market to Grow in Response to Regulatory Changes

Japan’s Hemp Market to Grow in Response to Regulatory Changes

Japan’s cannabis market has experienced phenomenal growth over the last four years, and the increase is expected to accelerate due to recent regulatory changes. Euromonitor International’s research found that Japan’s cannabis market grew from $26.3 million in 2019 to $173.8 million in 2023.

The revenue increase is attributed to increasing demand for products offering stress relief, relaxation and sleep improvement. However, the market would have grown even more if there had been more legal clarity about the cultivation and use of cannabis. That was addressed in 2023 with the passage of an amendment to the Cannabis Control Law, the first change made in 75 years.

Japan has had a zero-tolerance policy for marijuana. Japan has experienced the same issues as other countries with murky laws on CBD. One is that Japan’s lack of regulation concerning CBD extracted from matured stalks and seeds has led to products being sold that claim to contain only CBD but have trace amounts of THC. There has also been a significant increase in products with THC derivatives. Additionally, Japan has seen an increase in illicit cannabis cultivation and smuggling. The 2023 illegal cannabis market was estimated to be 2.5 times larger than the legal market.

The new bill amending the Cannabis Control Law decriminalizes the use of medical products made from cannabis, like Epidiolex, but continues to ban the use of marijuana. However, hemp cultivation is now authorized for medical use. CBD use is expected to expand to medicine, beauty, health, edibles and beverages.

“The liquid containing CBD (vapes) is the most common product type, but we expect large businesses to enter the market by launching food, beverages and dietary supplements,” said Aya Suzuki, a senior analyst at Euromonitor International.

Countries around the world continue to struggle with adopting cannabis laws that control the production and sale of psychoactive cannabinoids while making CBD legal. The lack of regulations only leads to an illegal market and the proliferation of products with questionable ingredients. Suzuki also said there must be an industry-wide effort to end illicit products because regulations alone are insufficient.


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