The business of CBD beauty

We’re only a few weeks into 2020, and already CBD beauty looks set to dominate the beauty industry after creating major buzz over the last year. Sephora launched its largest ever CBD beauty partnership with Saint Jane, a U.S. CBD cosmetics company that will now be sold in 281 Sephora stores in 22 states.

At the moment, Sephora stock over twenty CBD products from ten skin care different brands – however only two of these brands are dedicated to producing CBD and cannabis products. While regulation around CBD struggled to move fast enough to keep up with the market, consumer interest hasn’t waned.

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Before the launch of Saint Jane, CBD skin care products from larger established brands had been slowly creeping on to the virtual shelves of beauty companies around the world, from Sephora and Ulta in the United States to Debenhams, Harvey Nichols and Boots in the UK. While this is all great news for more established brands in the beauty industry that are dipping their toes in the CBD pond, what does this mean for indie CBD businesses?

With large retail conglomerates like LVMH giving CBD the green light – who also own Fenty Beauty, Dior, Tiffany and Benefit Cosmetics – this gives cannabinoid beauty more exposure. By showcasing innovative new CBD skin care companies, this opens the door for smaller indie brands in the beauty industry.

The fact that Sephora has put so much faith into a relatively young brand like Saint Jane (stocking their products online just four months after the company launched) means that CBD beauty is likely to be bigger and better in 2020. After all, why invest in an idea if it’s not worth the risk? Although large companies like Sephora might have a lot more money to gamble than small indie brands, they also have a much larger reputation to uphold.

European beauty industry vs U.S.

The beauty and skin care industry in Europe is much more rigorously regulated than the United States. The FDA, which is responsible for regulating food and pharmaceutical drugs across the U.S., does not monitor cosmetics ingredients in the same way. So, only prescription-strength skin treatments are subject to FDA testing.

In the EU, there are much stricter regulations around ingredients that can and cannot be used in skin care products and cosmetics. To put it in perspective, the FDA have only banned or restricted the use of 11 ingredients in cosmetics – while the EU has banned over 1,300. This rigorous approach to cosmetics testing is one of the reasons why Europe has yet to see the same explosion of CBD skin care as in the U.S.

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However, this rigorous testing is not without good reason. In the U.S., many dangerous chemicals like formaldehyde are found in products like hairspray, nail polish and nail polish remover.

How changes in the U.S. beauty industry can benefit the European Market.

While regulation in Europe is much stricter, it is useful to look at the American market as a benchmark for what could be possible in Europe and the UK.

In fact, several insider reports have indicated that the beauty industry will see massive growth in the area of CBD products. According to statistics from Grand View Research Inc., the global CBD skin care market alone is expected to reach $1.7 billion by 2025.

The CBD skin care industry has been dominated mostly by U.S. and Canadian brands, which accounted for over 40% of the market in 2018. This is largely due to the increased legalisation of cannabis and better regulation around CBD.

The fact that American beauty giants are welcoming the CBD skin care market with open arms, can work as a litmus test for indie European brands. By seeing the revenue that CBD skin care can generate, lawmakers in the UK and EU may call for more research into the area, as brands continue to pop up across Europe.