'Cannabis is hot' and the beauty industry is taking note
Bee venom. Snail mucus extract. Salmon eggs. With the beauty industry’s trend of incorporating unusual ingredients in skin care products, cannabis is the latest additive major cosmetic players are eyeing.
The Estée Lauder Companies Inc. recently launched a US$28 face mask product with cannabis sativa oil in the U.S., highlighting how major beauty companies are the next industry to adopt cannabis as a viable element in their products.
“Right now, cannabis is hot. With marketing being what it is, cosmetic companies are required to stay on point and on trend,” said Samantha Roman, a former clinician and president of Credible Cannabis Consulting, in a television interview with BNN Bloomberg.
Although cannabis-infused skin care products are currently the domain of smaller, quasi-legal independent outfits, its potential could be massive if customers indeed gravitate to them. A recent report by cannabis data provider Brightfield Group estimates beauty products with cannabis as a central ingredient could generate revenue of roughly US$1 billion by 2022.
“Major companies are seeking new market opportunity in an already saturated market of beauty and wellness products,” said Stephanie Spangler, a U.S.-based lawyer who specializes in cannabis at Norris McLaughlin, in an email to BNN Bloomberg.
That opportunity was showcased on Monday after Toronto-based Cronos Group announced a three-year research agreement with the Technion – Israel Institute of Technology to explore the use of cannabinoids and their role in regulating skin health and skin disorders.
“We believe that the potential applications of cannabinoids to regulate skin health and treat skin disorders are vast,” said Mike Gorenstein, Cronos Group’s chief executive officer, in a statement.
Cronos isn’t the only pot producer eyeing the skin care space. Alison Gordon, chief executive officer of Toronto-based 48North Cannabis Corp., said the pot producer is actively in talks with one major cosmetic brand to develop skin care prototypes with marijuana as a major ingredient.
“We are building a health and wellness company based on the female market and our emphasis is on extracted products and brands,” Gordon said in a recent interview with BNN Bloomberg at her Toronto office.
Despite the potential opportunity, Canadians have to wait to slather on pot-infused face cream or enjoy a marijuana bath bomb. Health Canada stated in an email to BNN Bloomberg that the legislation that will legalize cannabis Wednesday “does not authorize the legal sale of beauty products or cosmetic products containing cannabis.”
Cannabidiol (CBD), which is the more likely cannabinoid used in beauty products, will be regulated under the Cannabis Act and products infused with the chemical can only be sold by an authorized retailer or licensed medical marijuana seller. “The sale of such products in health food stores and beauty boutiques will not be allowed,” said Health Canada.
South of the border, the latest U.S. Farm Bill which is currently awaiting review by lawmakers could also push forward gradual change in allowing cannabinoids to be an active ingredient in beauty products.
Even as policymakers incrementally outline a path for cannabis to be a viable product in the beauty product sector, retailers like Sephora will be permitted to sell products with very small amounts of CBD in the U.S.
Gordon said she is positioning her company to become the Canadian cannabis partner of a major beauty and skin care company that wants to conduct research and development in Canada to eventually make a viable wellness product for the North American market.
“A lot of these companies don’t actually make the product but work with a contract manufacturer,” Gordon said. “Our strategy to partner with contract manufacturers in beverage and skin care is to work with these larger brands. They want to have the first facility licensed in Canada to handle cannabinoids, but they also don’t want to be in the back of the line for that.”
Norris McLaughlin’s Spangler sees many beauty industry players positioning for a future in cannabis. “Even if the products currently do not contain CBD or THC, they are setting the foundation to quickly incorporate these types of ingredients in the future,” she said.
Even so, Estee Lauder’s "Hello Calm” cannabis face mask by its Origins brand, despite generating significant publicity, doesn’t actually contain CBD or THC and seems "unambiguously legal," according to April Scee, an analyst at Renaissance Macro Research.
"Origins is not the first to launch a Hemp product, but it may be the largest premium brand," Scee outlined in a recent note to clients. "Estee’s early participation in the category should help further legitimize cannabis in [the beauty industry]."
Roman warns it is important to watch out for “misleading” branding that she says is "typical" of the beauty industry, which often makes product claims without actually having any scientific studies backing it up.
“A company can't claim to reduce aging and wrinkles, only ‘the appearance of.’ So that’s highly regulated,” said Roman.
"I think the challenge here, though, is really trying to get the accurate information as to what is the plant source and what are you actually getting. So, what is the ingredient that you are actually putting on your skin and what claim is being made? And I think, in the short term, that's going to be very confusing for people."
Cannabis Canada is BNN Bloomberg’s in-depth series exploring the stunning formation of the entirely new – and controversial – Canadian recreational marijuana industry. Read more from the special series here and subscribe to our Cannabis Canada newsletter to have the latest marijuana news delivered directly to your inbox every day.