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CBD, Hemp Fiber, Seeds and Oil: Meros – USDA report series on Japan’s market for hemp-derived products released

Posted by Lucia Vancura in Market Trends, Publications

Anyone exploring the shops and cafes of Japan’s major cities in the past two years has certainly noticed the explosion of CBD products on retail shelves, online shops and in a growing number of cafes. CBD consumer products range from tinctures and gummies to cosmetics and even pet products, some imported and some manufactured in Japan using CBD raw materials primarily from the U.S., China and the EU.

While CBD products are a major current trend, interest in the Japanese market for a variety of hemp-derived products has grown dramatically in the past few years.Hemp seed and hemp seed oil appear poised for growth in the Japanese health food sector; longer term, there may be opportunities for hemp fiber in construction, insulation and plastic.

Meros recently teamed up with the U.S. Embassy Japan to develop a series of reports on the Japanese market and import regulations for hemp-derived products, to serve as a resource for U.S. exporters planning their business development in Japan. The 2018 U.S. Farm bill legalized the production of industrial hemp in the U.S., defined any cannabis plant or derivative thereof, that contains not more than 0.3 percent delta-9 tetrahydrocannabinol (“THC”) on a dry-weight basis. This authorization of production in the U.S. has brought optimism that a new commodity crop can be developed in the U.S., with a wide range of uses in industrial, feed and wellness markets and potential for export to global markets.

While Japan has a long history of hemp cultivation, today Japan’s domestic hemp use is mainly limited to fiber for traditional uses linked to the Shinto religion, such as shimenawa ropes decorating shrines or the belts of top ranked sumo champions. To grow cannabis in Japan, a cultivation license is necessary and as of 2019 there were only 35 licensed cannabis cultivators, primarily in Tochigi Prefecture, and a total of 9 hectares under cultivation. There is little expectation that this number will increase in the near term.

And yet industrial hemp has a wide potential range of uses in Japan from seeds for human and animal consumption, fiber for use in apparel, building insulation, plastics and construction materials to hemp extracts such as CBD and other cannabinoids in cosmetics and wellness products. It is expected that these raw materials will need to be imported to Japan; this makes it essential for potential hemp product suppliers to have a deep un

Under Japan’s legal regulatory framework, the Cannabis Control Act bans importation of “cannabis”. The Act defines ‘cannabis’ as “the cannabis plant (Cannabis sativa L.) and its products. However, mature cannabis stalks and products made from stalks (excluding resin, which is illegal), as well as cannabis seeds and products made from the seeds are excluded from this legal definition of “cannabis”. Japan has a zero-tolerance level for tetrahydrocannabinol (THC) in any product.

The Cannabis Control Act does not explicitly mention THC, however, in practice, the Ministry of Health, Labour and Welfare (MHLW) interprets the presence of THC in a product to mean that parts of the cannabis plant other than mature stalks or seeds were used.Unacceptable parts include flowers, buds, leaves, immature stalks, or roots.

Exporting hemp products to Japan, therefore, requires various documentation and administrative steps in order to comply with the import regulations for legal hemp products.

In this new series of reports, Meros not only looks at the current market dynamics of each product category, but also examples of the import flow and documentation required for hemp fiber, hemp seed, hemp seed oil, CBD and hemp extract products.

Further regulatory changes are expected Japan’s hemp product market in the coming years, so success as a supplier to Japan’s hemp product markets will require on-going observation of the changing dynamics of each market and potential changes in regulation. As always, strong relationships with importers and partners in Japan will be critical for suppliers to navigate these dynamic markets.

The series of reports can be found at the following links:

The Japanese Market for Hemp Fiber

The Japanese Market for Hemp Seed and Hemp Seed Oil Products

The Japanese Market for CBD and Hemp Extracts

27 May

CBD Products Making a Move into Mainstream Channels in Japan

Posted by Team Meros in Market Trends

CBD products are increasing in the Japanese market, taking steps to move from a niche product into mainstream channels. Although the Japanese government hasn’t explicitly legalized CBD (and continues to strictly ban cannabis itself and any trace of THC), Japan allows importation of some types of CBD products as long as the products remain within the guidelines of several key relevant laws. CBD products first entered Japan around 2016 and have been continually expanding their market. Now, some mainstream retail chains have begun to handle CBD products and a CBD specialty store opened just this year in Tokyo’s trendy Harajuku.

cbd products in japan

Discount retailer Don Quijote has shelves of CBD vape liquid and HealthyTOKYO cafe in Harajuku offers original CBD beverages.

Don Quijote, one of the largest discount chain stores in Japan, with almost 400 branches nationally, sells a large variety of CBD vape products such as CBD vape liquids, cartridges, and disposable vaping devices. Don Quijote handles overseas brands such as NATUuR CBD, as well as domestic CBD vape liquid brands like Kamikaze and Tsukinoha. Not all branches of Don Quijote handle CBD products, but the fact that this kind of mega-chain has started to sell CBD indicates that CBD awareness has moved to the next level in the Japanese market.

Vape products are not the only CBD products that you can find in Japan. Biople by CosmeKitchen, a shop that sells natural and organic cosmetics, sells foreign branded health and beauty CBD products such as EliXinol’s CBD oil, Endoca’s CBD capsules and Medeterra’s CBD cream. Biople has 18 stores in Japan and some outlets are located in well-known department stores such as Lumine and OIOI (Marui).

While Don Quijote and Biople sell a variety of CBD products, they don’t have their own branded products. HealthyTOKYO CBD Shop & Café, the first CBD specialty store in Japan just opened this year, sells its own branded CBD products. HealthyTOKYO not only sells CBD oil, cream, and capsules but also CBD snacks, coffees, teas and cocoa in their café. According to the manager, their own private brand HealthyTOKYO CBD is the best-selling of their product lines. The store’s main customers are non-Japanese people and travelers, and therefore sales have unfortunately dropped recently due to COVID19 and the decline in tourists.

With CBD products beginning to appear in popular discount chains and well-known department stores, as well as many online channels, it is clear that CBD has entered a new phase of market expansion. As more people become aware of what CBD is, we expect further domestic product development, increased imports and potentially new usages in health, beauty and food products.

Interested in understanding more about the CBD market in Japan or understanding the steps that exporters have to take in order to export CBD products to Japan? Reach out to us at inquiry@merosconsulting.com

What is CBD?

CBD (Cannabidiol) is a chemical compound found in cannabis. Unlike the cannabis compound THC (Tetrahydrocannabinol) that makes a user feel “high”, the chemical compound CBD is associated with health benefits such as relaxation of the mind and body and relief of anxiety and worry. Products such as oils, cosmetics, and even snacks that contain CBD are increasingly popular in many countries around the world.

07 Jul

Vietnam’s Specialty Coffee Entrepreneurs are Tasting Success

Posted by Team Meros in Market Trends

Vietnam has a rich tradition of coffee drinking and coffee cultivation and in the past decades the country has grown into a global coffee exporting powerhouse and world’s largest producer of robusta coffee. However, much of Vietnam’s coffee exports are commodity coffee; robusta beans are often used as a base in coffee blends or coffee drinks like Japan’s ubiquitous canned coffees.

Commodity coffee prices are determined on international exchanges and there is little opportunity for growers to differentiate their crops or capture additional value for higher quality or better flavors. This leads to a potential opportunity to further develop the specialty coffee industry in Vietnam, especially coffee for the domestic market, where rising incomes and urban lifestyles are fueling a dynamic café culture.

This specialty coffee industry has been a target of Meros’ ongoing work in Vietnam. We are working with the Japan International Cooperation Agency (JICA) to understand opportunities and challenges for Japanese and other foreign investors into Vietnam’s agricultural value chains.

The team, led by Meros’ Chisa Ogura, together with experts in program evaluation, investment and private sector development recently visited La Viet, an example of a larger, fast growing specialty coffee business. It is located in the highlands of Dalat, the center of the coffee industry. The owner Tran Nhat Quang is enthusiastic and clearly committed to creating high-quality, specialty coffee in Vietnam. The company grows coffee in their own fields as well as collecting coffee from 120 farmers. 60% of their coffee is exported as green beans for roasting overseas. The other 40% is processed and roasted by La Viet themselves, mainly for the domestic market. This domestic market is expanding and La Viet now operate 5 retail coffee shops in Vietnam.

La Viet owner Tran Nhat Quang has also invented an original style of Vietnamese coffee maker. (There is now one in the Meros office in Tokyo – come try it in our office!)

Who will drive the emerging specialty coffee industry?

But can a small Vietnamese coffee producer get to the size of La Viet? Is it realistic for small producers to take the risk of leaving the reliable sales channel of commodity export beans to take on the domestic specialty coffee market? With the right investment, is there really opportunity here for Vietnamese growers? These are the questions we wrestle with.

Mr. Nguyen Van Son’s business Sonpacamara indicates that there are entrepreneurs who may be able to do it. Nguyen Van Son’s business is small – he harvests 4 hectares of his own coffee, plus 6 hectares from a partner. While he used to sell for export to Japanese roasting giant UCC, he now only deals with specialty coffee. He invested in his own roaster and now roasts 90% of his coffee for the domestic market. His coffees are characterized by a very clear and fruity taste.

Mr. Nguyen is not originally a coffee grower – left his career as a car dealer for coffee in 2005. Entrepreneurial spirit, charisma and passion for coffee drive his success, attracting volunteers and interns from around the world. Why coffee? “Oh, I didn’t choose coffee,” Nguyen says. “Coffee chose me!”