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Japan’s cannabis market growing rapidly amid regulatory shift

Japan’s cannabis market expanded sixfold over four years to ¥24 billion ($154 million) in 2023, a trend that is expected to accelerate with the amendment in December of cannabis laws, market research firm Euromonitor International said in a recent report.

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The growing sales of products using CBD (cannabidiol), a compound found in marijuana, are attributed to the rising demand for products that offer relaxation, sleep and stress relief, the firm said, estimating the current number of CBD users in Japan at 588,000.

Many users see CBD as alternatives to tobacco and alcohol, often using them to relax while watching movies or TV shows, the firm said.

Though some countries have in recent years moved to legalize or decriminalize marijuana, Japan has maintained a zero-tolerance policy, prohibiting its possession or sale.

The legality of products that contain cannabinoids, a group of substances derived from the cannabis plant, however, has been somewhat murky. There are more than 100 cannabinoids, of which CBD and THC are two major ones.

THC (delta-9-tetrahydrocannabinol) is what gives users a “high” when they smoke marijuana or consume an edible, and its use remains strictly prohibited in Japan.

Meanwhile, Japan has not regulated CBD extracted from matured stalks and seeds. A growing number of products containing CBD are on the market, often sold in the form of dietary supplements and cosmetics, as well as lotions and oils.

But there have been cases where trace amounts of THC were found in products claiming to contain only CBD. Products using synthesized THC derivatives have also proliferated, with regulators finding themselves in a "whack-a-mole" situation with marketers over a growing list of derivative products.

In December, Japan’s parliament passed a bill to revise the 1948 Cannabis Control Law for the first time in order to decriminalize the use of medical products derived from cannabis, while at the same time closing a loophole in current regulations by explicitly banning the use of marijuana.

The revisions, which could come into force as early as this year, would bring clarity to the regulatory landscape surrounding CBD use in Japan and accelerate its legal use in diverse fields ranging from medicine, health, beauty and beverages to edibles in Japan, said Aya Suzuki, a senior analyst at Euromonitor International.

“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,” Suzuki said, noting that major companies such as UHA Mikakuto and Cheerio have already launched CBD-containing gummies and drinks in certain regions and sales channels.

For the CBD market to grow in Japan, an industrywide effort to establish guidelines to wipe out illicit products, in addition to complying with government regulations, would be vital, Suzuki said.

“It is normal for businesses to source CBD ingredients and CBD-containing products from abroad,” she said.

“Therefore, it is important for them to find reliable (overseas) suppliers. Many small and individual business owners who import ingredients and products have increasingly seen their packages disposed of (by customs regulators) through the detection of THC in them or the suspicion that they contain THC.”



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