Rapid Expansion: Japan’s Surging Cannabis Market

Recent years have witnessed a remarkable surge in Japan’s cannabis market, a trend unveiled in a newly published report by Euromonitor International. The report reveals an astonishing sixfold growth from JPY4 billion (USD26.3 million) in 2019 to JPY24 billion (USD173.8 million) in 2023, attributing this surge to the escalating demand for relaxation, sleep improvement, and stress relief products.

According to Euromonitor International, the initial hesitancy among major Japanese companies to invest in the cannabis market stemmed from legal uncertainties and negative perceptions surrounding its use. However, a significant turning point occurred in 2024 when Japan amended its Cannabis Control Law for the first time in over 70 years.

The amendment is poised to revolutionize the landscape of cannabis use in Japan, particularly accelerating the adoption of cannabidiol (CBD) across various sectors, including medicine, health, beauty, beverages, and edibles. Despite a relatively low percentage of cannabis consumers compared to Western countries, Japan witnessed a surge in illicit cultivation and smuggling operations, particularly among younger demographics. The domestic illicit cannabis market in 2023 was estimated to be 2.5 times larger than the legal CBD market, underscoring the need for regulatory reforms.

The revision to Japan’s cannabis law, enacted in December, not only eased restrictions on cannabis-derived medicine but also introduced stricter penalties for illicit cannabis use, including a maximum prison sentence of seven years. This move sparked debates among lawmakers, with some expressing concerns over the severity of the penalties.

Furthermore, the amended law permits the cultivation of hemp, aiming to reduce Japan’s reliance on imported products. The momentum for regulatory change gained traction following similar relaxations in other countries, prompting the Ministry of Health, Labour, and Welfare to establish an expert panel to review the Cannabis Control Law in 2021.

Despite the rapid growth of Japan’s CBD market, challenges persist, including limited consumer awareness, concerns over product safety, and regulatory compliance. However, the revised law is expected to pave the way for clearer guidelines, attracting major companies to enter the market by 2024.

As Japan’s cannabis market continues to evolve, it presents significant opportunities for growth across various sectors. The increasing utilization of CBD underscores a shifting societal perception towards cannabis, albeit accompanied by lingering consumer concerns. The key to unlocking the market’s full potential lies in educating consumers about the benefits of CBD products while ensuring compliance, quality control, and scientific validation.


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