Globally, the market for legal and illegal cannabis stands at around €136bn (US$150bn) and is forecast to surge to €150bn (US$166bn) by 2025, at which point legal cannabis should represent 77% of the market, according to Euromonitor International.
Use of cannabidiol (CBD) – an active compound found in several species of Cannabis sativa L. – in beauty has been touted by many as an important and growing space, particularly in skin care. Earlier this year, cannabis market intelligence firm Prohibition Partners predicted CBD skin care alone to pull in €870.5m (US$959m) in revenues by 2024 and represent 10% of the total global skin care category.
UK set to be ‘major market’ in CBD beauty
Cannabis consultancy firm Hanway Associates said there were clear opportunities in CBD beauty.
Speaking to CosmeticsDesign-Europe, Charlotte Bowyer, senior consultant at Hanway Associates, said there was “significant opportunity” for CBD beauty to take off, especially across Europe.
“We’ve seen CBD food and drink products explode in popularity of late, and CBD cosmetics are a natural continuation of this trend. European attitudes towards cannabis-derived products for both medical and wellness purposes have really evolved over the past few years, and CBD beauty is a great, low-risk way to try out the trend or supplement an existing CBD regime,” Bowyer said.
And the UK, specifically, presented an important market for CBD beauty, she said.
“The UK is set to be a major market for the sector. Not only do we have a large population in the UK, but consumers have already shown enthusiasm for CBD products in a variety of forms such as oils and soft drinks. Many high street retailers such as Boots, Tesco and Holland & Barret already stock a range of CBD-infused cosmetics, making the segment visible and approachable for even casual shoppers.”
Bowyer said many successful CBD brands originated from the UK and those not already operating in the cosmetics space soon would be.
Medical cosmetics and hemp for conscious capitalism
As research on CBD and its applications in beauty continued, Bowyer said products at the borderline between cosmetics and medicines like eczema creams or acne treatments could “start to emerge”.
“Some companies are already finding some very positive results in small trials in this area and I think there are great opportunities for companies that gather this data to get approval for a CBD product with a minor medical purpose. This in turn will allow them to explicitly target and market towards specific demographics and sufferers of certain ailments,” she said.
Hemp would also continue to be a strong choice in the beauty world, she said, aligning well with wider market trends. “Use of hemp and other botanicals fits nicely with the current trend of ‘conscious capitalism’, and there’s great opportunity for companies to curate a sustainable ethos. For example, through the use of hemp bioplastic packaging and green environment initiatives tied to hemp cultivation.”
“…As laws on CBD are clarified across Europe, as well as regions like North America and Asia, I’d expect to see markets emerge for an increasingly wide range of hemp-derived beauty products. I also expect to see products make greater use of other hemp constituents such as terpenes, the aromatic oils that give cannabis plants their unique odour and which, like essential oils, are thought by some to exert positive physiological effects,” she said.
Within three to five years, Bowyer said beauty majors like L’Oréal and Estee Lauder – who had, so far, capitalised on the hemp trend but stopped short of using CBD – would also bring cannabidiol beauty products to market.
“Beauty is an ideal category in which to develop a cannabis-derived offering that eschews the typical ‘stoner’ iconography, and it will be interesting to see how this segment develops.”
Sourcing CBD extracts considering regulations
Bowyer said as more companies shifted into the CBD beauty space, it would be paramount to fully understand labelling laws and regulations governing use of cannabidiol in beauty products.
“One of the most complex concerns relates to the type of CBD that can actually be used in cosmetics,” she said.
Under the EU Cosmetics Regulation (EC No. 1223/2009), use of narcotics such as cannabis and cannabis extracts were prohibited in cosmetics. In early 2019, the European Commission (EC) added entries into its database to clarify use of naturally-derived CBD from cannabis plants was also prohibited but use of hemp-derived or synthetically-produced CBD was allowed.
Use of certain parts of the cannabis plant, however, – notably flowers – remained unclear, said Bowyer. “The international definition of ‘cannabis’ that the EU regulation relies on doesn’t differentiate between high-THC [Tetrahydrocannabinol] cannabis flower and the low-THC hemp flower that’s used as the primary source of CBD extract. This makes it unclear whether using hemp flower-derived CBD is against EU regulations, even if the extract itself is not a narcotic. The European Commission takes the view that it should not be used, but ultimately it’s up to national agencies to interpret and enforce the regulations and there’s been little guidance from individual countries on the issue.”
Bowyer said for companies looking to “play it safe” and avoid hemp flower-derived CBD, there were two clear alternatives: CBD derived from other parts of the plant, such as hemp leaves, or synthetic CBD, though both were more difficult and expensive to source.
“The ‘grey area’ that this leaves manufacturers in is one of the reasons why we haven’t seen many established beauty brands fully embracing CBD in Europe yet; such companies are naturally more conservative and are content to let smaller, independent operators test the water and push for regulatory clarity first,” she said.
Avoiding ‘over-hype’ and ‘greenwashing’
As more beauty brands did jump aboard, Bowyer said industry would have to work hard to collectively “protect itself” from irresponsible and misleading marketing.
“There have been some blatant examples of ‘greenwashing’ in the sector where brands have marketed products as containing CBD only to actually contain hemp seed oil, if anything hemp-related at all, which does have its own benefits but certainly isn’t the same as CBD (…) The beauty companies that charge a premium for CBD products, make overblown claims and then fail to deliver put the credibility of the broader industry in jeopardy.”
Industry had to be careful not to “over-hype” products, she said, particularly those containing negligible amounts of CBD. The best strategy was to clearly label the amount of CBD in each product so consumers could make “informed decisions” and some CBD cosmetic claims were also best avoided, like ‘pain-relieving’ or ‘healing’ – two that would be open to regulatory difficulties down the line, she said.
“This type of behaviour will likely subside as the industry matures, but the prevalence of CBD brands that can pop up online, provide sub-standard products and make whatever claims they like is certainly a major risk against more mainstream adoption.”
