Whats’s driving consumer interest in the CBD-cosmetics space?
Pierre Killeen, manager of Strategic Business Development, HEXO, will lead a session at in-cosmetics North America on ‘Whats’s driving consumer interest in the CBD-cosmetics space?’ on Thursday 24 October at 13:45 in the Marketing Trends Theater. Adam will present findings from consumer trends research conducted exclusively for in-cosmetics North America into the use of CBD-based products, looking at what is driving the consumer interest in CBD-based products, how and why are consumers using it, and what does this mean in terms of market opportunity.
Personal Care spoke with Pierre to find out more.
Personal Care: Is the growth of CBD cosmetics showing any sign of slowing down?
Pierre Killeen: No, it’s quite the opposite. We are at the forefront of business opportunities for CBD and cosmetics. In 2018, CBD sales in the US were just under $2 billion dollars, with topicals accounting for approximately 10 per cent of those sales. It is expected that CBD sales will increase five-fold in the next five years as CBD migrates from the dispensary to the retail shelf. When you consider the therapeutic qualities of CBD for skin, cosmetics could be one of the first CPG industries to feel the lift from this move.
In the United States, we’re seeing some early movers in the CBD cosmetics space building brands and taking interesting leadership positions, and we’re seeing consumer sales that validate the opportunities ahead. We are also witnessing leading beauty retailers like Sephora and luxury retailers like Barneys New York responding to customer demand for CBD cosmetics.
The other trend in the cosmetics industry to watch is cannabis topicals for health and wellness sold by dispensaries. Consumers with skin conditions like acne and psoriasis are turning to these products for relief. Most of these products include THC as well as CBD, so it will be interesting to watch the convergence of these two trends and their impact on the cosmetics industry.
At HEXO Corp, we have some major skincare companies interested in working with us on the development of the next generation of CBD cosmetics. We’ve built an industry-leading innovation team and are focussed on developing CBD and CBD/THC formulations for the cosmetics industry.
There’s a lot of anecdotal evidence to suggest CBD is going to be a major ingredient and we’re excited to move that conversation into the domain of science-based evidence. HEXO’s strategy is to work with cosmetic industry leaders to bring products to market that respond to consumer demand, while conducting the research needed to validate the right product claims for the cosmetics industry.
PC: Many consumers view it almost as an elixir – are any recent studies backing up the claims?
PK: Yes, there are a few studies, and the good news is that with the legalization of CBD and THC more studies are happening. A meta-analysis in the Journal of the American Academy of Dermatology in 2017* looked at several studies, including the use of topical cannabis creams for itchy skin caused by kidney disease. Other studies tackled cannabinoid topicals for melanoma, contact dermatitis, acne and sclerosis.
It’s important to keep in mind that the illegality of cannabis has served as a barrier to research. Even today, the federally illegal nature of cannabis is acting as a major barrier to clinical research. In Canada the entire cannabis plant is federally legal – this means THC, CBD and the other 100+ minor cannabinoids. This creates the opportunity for HEXO and our cosmetics company partners to conduct research, prototyping and clinical trials into the therapeutic and cosmetic uses of cannabinoids, without the legal constraints and related risks facing large US and European companies. At HEXO, we encourage our partners to work with us to get it right in Canada and then take it to the US when the market conditions are right.
PC: Do you foresee any legislative issues on the horizon?
PK: In the US, hemp-derived CBD has been removed from the controlled substances list through the 2018 Farm Bill, so the next step is regulating CBD products. Practically speaking, this means that CBD is not illegal, but that we still need to develop the rules governing how CBD enters consumer products such as food, food additives and cosmetics.
When it comes to cosmetics, the FDA approach to regulating CBD is different than its approach to food. Generally speaking, CBD is allowed in cosmetics so long as the FDA does not determine that CBD in a cosmetic is a “poisonous or deleterious substance which may render it injurious to users under the conditions of use prescribed in the labeling, or under such conditions of use as are customary or usual.”
In Canada, we’re going to see CBD and THC topicals legal by Oct 17, 2019, and available for sale on December 16, 2019.
So, the current state of the law allows for CBD in cosmetics in the US and CBD and/or THC in cosmetics in Canada. Research suggests that the benefits of CBD are enhanced when combined with THC. Given this, the federal legality of THC and THC levels in the US is something to keep an eye on.
We’ll have to move into clinical trials to talk about the cosmetic benefits of CBD topicals. But the good news is that the legal and regulatory environments are prepared for that to happen in Canada (THC and CBD) and the US (hemp-based CBD).
PC: What are the opportunities for cosmetics companies?
PK: CBD is currently found in a range of cosmetics products, from serums to creams to moisturizers. CBD is also found in a range of topicals used to help with skin conditions. We see opportunities for cosmetics that make can make us look better and can heal us. We believe that the consumer will look for CBD cosmetics backed by claims and that this is the winning opportunity for cosmetics companies.
There’s a lot of hype about CBD and what it can do, so there’s an educational opportunity for cosmetics companies that needs to happen. In addition, HEXO needs to communicate to cosmetics companies that we have the legal and regulatory environment and R&D skills to help them move beyond the hype. We have a major investment in the research side of things and now it’s time to capitalize on this opportunity.
Pierre Killeen is Manager, Strategic Business Development with HEXO Corp, a Canadian cannabis company that creates and distributes innovative products to serve the global cannabis market. Through its hub and bespoke business strategy, HEXO Corp is partnering with Fortune 500 companies, bringing its brand value, cannabinoid isolation technology, licensed infrastructure and regulatory expertise to established businesses, leveraging their distribution networks and capacity. As one of the largest licensed cannabis companies in Canada, HEXO Corp operates with 2.4 million sq. ft of facilities in Ontario and Quebec. The company will be presenting a talk on ‘What’s driving consumer interest in the CBD cosmetics space?’ at in-cosmetics North America this October.
For more information on the in-cosmetics North America 2019 education program, visit: https://northamerica.in-cosmetics.com/