Changes in Japan likely to limit cannabinoid production to medical hemp only

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Japan’s House of Representatives has signed off on an amendment that would loosen up rules for hemp while tightening regulation of marijuana.

Central to the amendment is a provision that will technically allow the production of medical-grade cannabinoids, but sources say that activity will be restricted to products derived from industrial hemp and not marijuana.

It is unclear if the law will legitimize the import and sales of over-the-counter extracts and other products made from the hemp plant’s flowers (primarily CBD).

Under current Japanese rules, only products made from hemp seeds or stalks are legal, but that has not prevented the development of a CBD retail market estimated at more than $60 million, as enforcement agencies have turned a blind eye to a growing gray market for products produced from hemp flowers.

Brisk business

As many as 150 companies are believed to be involved in the CBD trade in Japan as importers or distributors of products sold online and in physical retail outlets. In many cases, producers and sellers have simply labeled their products as coming from hemp stalks when in fact they were made from flowers.

The amendment generally calls on the government to set a framework to promote the production of seed- and stalk-based products, and to establish licensing for the cultivation of hemp flowers – likely to be restricted to pharmaceutical companies making prescription-only products. The measure must still be passed by the Japan’s (upper) House of Councillors and approved by the cabinet before being signed into law. That process is expected to take at least six months.

Already a market

CBD sales flourished in Japan up until 2021, when the introduction of hemp-derived psychoactive substances such as delta-8 THC and HHC caused that market to cool, a Japanese source told HempToday.

The source said consumers buying CBD before 2021 were people who wanted to get high but who didn’t have the option, so they bought CBD. When the psychoactive products became available, those consumers turned away from CBD.

Health authorities eventually cracked down on the hemp-derived high-producing products, regulating them off the market.

GW poised to win

The new amendment, if enacted, would appear to be a boon to medical CBD maker GW Pharmaceuticals (a unit of Ireland-based Jazz Pharmaceuticals), which has already conducted clinical trials in Japan for its Epidiolex high-concentration CBD product, a drug that has shown promise in the treatment of childhood epileptic patients who suffer Dravet and Lennox-Gastaut syndromes. Epidiolex already has market approval in Europe and the U.S.

In addition to changes affecting hemp-derived cannabinoids, the government would also officially categorize THC as a narcotic and close a loophole in current drug laws that punish importing, exporting, cultivating, transferring or possessing cannabis products but which do not specifically address marijuana “use.”

“Users,” who are not technically under threat of penalty now, could be subject to up to seven years imprisonment under the amendment that passed the House of Representatives.

Criminalization lingers

Opposition parties, citizen groups and other organizations oppose the reclassification of marijuana use as a crime, saying it is counter to global drug policy, which has shifted in recent years to prioritize harm reduction over criminalization.

The proposed changes also call for regulations to be set that include a maximum THC level in hemp products.

The amendment would replace the existing Cannabis Control Act with a Law Concerning Regulation of the Cultivation of Cannabis Plants.

Japan’s Cannabis Control Act, which was established under American occupation in 1948, and is based on the notorious U.S. Marijuana Tax Act of 1937, comprises laws that are among the most restrictive in the world.

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