Sales of cannabidiol, or CBD, are expected to exceed $22 million dollars over the next three years. The industry has grown exponentially, and major brands are starting to take note. This year’s Oscar’s goodie bag was full of name brand CBD products including High Beauty High Five Cannabis Facial Moisturizer and High Expectations Cannabis Facial Oil Instytutum skincare products. These brands paid big money to make it into the hands of celebrities in the hopes that these famous individuals will one day influence consumers into buying the brand.
Getting In On The Ground Floor
Companies who are looking to invest in the early stages of the CBD market are positioning themselves well for the eventuality of legalization. Companies who establish themselves as a reputable CBD brand will have an easier time adding THC products to their arsenal once cannabis is legalized for the recreational market.
For now, CBD is being used to make oils, tinctures, face creams, body salves, bath bombs and many other products. CBD infused products are gaining in popularity throughout the health and beauty industry and are being touted as the next big wave in skincare.
The Big Brands
Many celebrities are jumping on the CBD bandwagon, including Martha Stewart, who recently signed a contract with Canopy Growth to start a CBD pet care line of products that will eventually encompass products for humans as well. Stewart stated “I am delighted to establish this partnership with Canopy Growth and share with them the knowledge I have gained after years of experience in the subject of living. I’m especially looking forward to our first collaboration together, which will offer sensible products for people’s beloved pets.” Bruce Linton, CEO of Canopy Growth expressed excitement towards working with Martha Stewart: “As soon as you hear the name Martha, you know exactly who we’re talking about. Martha is one of a kind and I am so excited to be able to work alongside this icon to sharpen our CBD product offerings across categories from human to animal.”
Snoop Dog also signed a contract with Canopy Growth to develop a line of CBD products to relieve anxiety in animals, called “Leafs By Snoop”, although this product line has yet to hit shelves.
Constellation Brands, who owns companies such as Corona and Modelo beer, is also getting in on the CBD action and developing a line of CBD infused beverages. Constellation Brands signed a $4 million investment deal with Canopy Growth to sell infused beverages in 2018 but has yet to launch their new product line due to strict FDA regulations.
Another brand trying to secure its place in the CBD market is Molson-Coors Brewing Company, who just committed to a joint venture with HEXO Corporation for production of an infused beverage line. Molson-Coors is looking for ways to combat the decline in alcohol sales and offers deep pockets and marketing experience to HEXO for future branding of infused beverages.
The Canadian cannabis company Tilray signed a $100 million-dollar deal with Authentic Brands Group to launch a line of CBD infused products under the popular brand names Juicy Couture, Nine West and Jones of New York. Tilray seems to understand the potential of hemp and hemp-based CBD products after spending $314 million to purchase Manitoba Harvest, the largest hemp producer in Canada.
Finally, beauty giant Sephora now offers a full line of CBD-based skincare products in its stores. Sephora has partnered with brands such as Lord Jones and Herbivore and offers lotions, body oils and serums that not only moisturize but may help reduce the aches and pains of the day.
Going Up Against the Food and Drug Administration (FDA)
The FDA and lawmakers are certainly having their say in the infused beverage industry. The Motley Fool reported “on Sept. 27, 2018, it was announced that California Gov. Jerry Brown had signed a bill prohibiting bars, liquor stores, restaurants, and essentially any establishment that isn’t a licensed cannabis dispensary from selling alcoholic beverages infused with cannabidiol, or CBD, as of Jan. 1, 2019.”
This was a huge blow to companies like Molson-Coors and Constellation Brands who plant to launch CBD beverages in a growing market. The Motley Fool went on to say that “Brown’s signature provides further validation to a ruling made in July by California’s Department of Alcoholic Beverage Control (DABC) that banned the use of cannabis oils or CBD-infused alcoholic beverages, although the DABC has suggested that no beverages outside of dispensaries should be sold with infused CBD. Presumably, this leaves the door open for further legislation to restrict the use of cannabis oil or CBD in any beverages, not just alcoholic beverages. Should that happen, experimentation in CBD-infused beverages could slow and provide even less impetus for brand-name beverage companies to seek a cannabis partner.”
It is critical that retailers understand what CBD products are legal to sell at the current time. Under FDA law the only CBD products that should be available are health and beauty care products. It remains illegal to sell CBD infused food or drink in the United States, although products such as CBD oil remain legal for retail sale.