Induction of high-frequency shoot regeneration using nodal segments containing axillary buds from a 1-yr-old mother plants of Cannabis sativa was achieved on Murashige and Skoog (MS) medium containing 0.05–5.0 μM thidiazuron. The quality and quantity of regenerants were better with thidiazuron (0.5 μM thidiazuron) than with benzyladenine or kinetin. Adding 7.0 μM of gibberellic acid into a medium containing 0.5 μM thidiazuron slightly increased shoot growth. Elongated shoots when transferred to half-strength MS medium supplemented with 500 mg l−1 activated charcoal and 2.5 μM indole-3-butyric acid resulted in 95% rooting. The rooted plants were successfully acclimatized in soil. Following acclimatization, growth performance of 4-mo-old in vitro propagated plants was compared with ex vitro vegetatively grown plants of the same age. The photosynthesis and transpiration characteristics were studied under different light levels (0, 500, 1,000, 1,500, or 2,000 μmol m−2 s−1). An increase in photosynthesis was observed with increase in the light intensity up to 1,500 μmol m−2 s−1 and then decreased subsequently at higher light levels in both types of plants. However, the increase was more pronounced at lower light intensities below 500 μmol m−2 s−1. Stomatal conductance and transpiration increased with light intensity up to highest level (2000 μmol m−2 s−1) tested. Intercellular CO2 concentration (C i) and the ratio of intercellular CO2 concentration to ambient CO2 (C i/C a) decreased with the increase in light intensity in both in vitro as well as ex vitro raised plants. The results show that in vitro propagated and hardened plants were functionally comparable to ex vitro plants of same age in terms of gas and water vapor exchange characteristics, within the limits of this study.