Hemp as a "drug"
How many users are there?
The Hemp Control Law
Harm reduction through Regulation
Hemp prohibition in Japan
In recent years the number of Japanese who visit foreign countries, either on business, as exchange students or as tourists, has risen dramatically and many brought back the experience of smoking cannabis. As many as one in fifty Japanese, or over two million people, may have tried it already. There probably are several hundred thousand current users of cannabis in Japan right now.
Though some people may indeed pay as much as quoted in police reports, it appears that normal street prices are much lower, around ¥2,000-3,000 per gram (US$18-$27 per gram at 110 ¥/$). That's maybe twice the price as in the USA (see the High Times website for current US prices). Since the current price of gold is about ¥1,000 (US$9) per gram, Japanese marijuana appears to be about twice the price of gold! However, considering that gasoline, food and many other articles are also much more expensive in Japan than in the USA, Japanese marijuana prices are not really unusually high.
Since hand-rolled cigarettes are not common in Japan, most Japanese cannabis smokers use pipes instead of rolling papers. These pipes are usually quite small and therefore easily concealed and efficient. A typical marijuana joint or pipe uses between 1/10 and 1/2 gram of marijuana and its effects last from 1 to 4 hours.
Though it is hard to give an estimate how many of the 14 million people who travelled to Japan last year were carrying marijuana, somebody is caught every couple of days. Many are naive young tourists who accept a few hundred dollars in travel money from professional dealers to carry hashish hidden in luggage, not expecting that Japanese sentences can be far harsher than in many western countries. If someone approaches you about carrying illicit substances into Japan, don't take the risk!
Other smuggling channels are via postal mail, but there too there have been many reports of busts. Packages weighing a few hundred grams to several kg from addresses in Thailand, Africa or British Columbia to foreign residents in Japan appear to be particularly suspicious.
There is also evidence of marijuana shipments involving hundreds of kg by boats, suggesting that the market is not just supplied by smale-scale dealers but that well-organised criminal gangs with international connections have gotten involved too. Traditionally the yakuza have sold only amphetamines, but that may no longer be the case as non-yakuza have also started selling all kinds of drugs and the financial situation of many gangs has been hit by the recession and by anti-gang legislation. It's not clear who else would have distribution channels big enough to handle hundreds of kg. Bags with tens of kg of marijuana and some hand guns have been found along Japanese coasts. Normally only yakuza smuggle handguns and they often use small boats to bring in illegal aliens, in cooperation with Chinese triad gangs. The triads also supply the yakuza with amphetamines from China and Burma so there are many business ties.
There are networks of illegal aliens from Iran and Thailand which may be handling fairly large quantities. Some of their supplies are brought in by couriers, some by mail and some is grown in Japan. Illegal aliens are also known to sell amphetamines as front men for yakuza, so some of the cannabis sold by Iranians may be from the yakuza-triad connection too.
There has not been a single bust involving marijuana brought in on boats yet, so until more large scale smugglers get busted the only ones who really know will be the smugglers. However the US federal drug police DEA has already given demonstrations to their Japanese counterparts on how to board smuggling vessels and how to retrieve drugs dumped overboard.
Drug seizures (1993-2002) 
Many rural users grow their own, effectively for free and many share their harvests with friends. 80% of Japan is wooded mountain land, with only 20% of the population living there. Sowing and harvesting often take place during hiking trips. Hemp seeds are imported from the Netherlands, from Canada and from most marijuana growing countries. Hemp and marijuana grow well, from Okinawa to Hokkaido. There's plenty of rainfall and the cooler climate of the mountains is no problem, as marijuana also thrives in the mountains of Colombia, Mexico, Nepal and Switzerland. People grow it on wooded hillsides, in abandoned fields, hidden in bamboo or goldenrod.
Increasingly marijuana is also cultivated at home, even in cities. Many Japanese growers read sophisticated foreign literature about growing indoors under lamps. The information is freely available in numerous books and websites. Electricity may be expensive in Japan, but that's even more true for cannabis if it's purchased on the black market.
Most of the home cultivated drug hemp is never sold. Even though the police is less interested in marijuana users than in speed users and their organized crime links, selling to people who later get busted for possession and snitch on you is still a good way to get yourself into a lot of trouble in Japan. So most growers take the safe route and only produce for their own personal use.