Personal care product makers follow the green gold rush of cannabis

It’s natural, it’s been used since antiquity, and almost overnight, it’s become the ingredient to have in personal care products. Cannabis is the latest sensation showing up in creams, salves, massage oils, and hair care products. Some brands tout moisturizing effects, but many more suggest cannabinoids can relieve pain, reduce inflammation, and treat acne and other skin conditions, such as psoriasis and eczema.

Call it marijuana or call it hemp, Cannabis sativa and its derivatives have taken off because of easing regulations globally. In the US, passage of the farm bill in December bestowed the federal government’s blessing on industrial varieties of cannabis with low levels of the psychotropic ingredient ∆⁹-tetrahydrocannabinol (THC).

The bill does not legalize marijuana, a term that designates cannabis varieties with THC levels in excess of 0.3%. However, it is paving the way for widespread use of the low-THC plant, known as hemp, in applications such as food, beverages, clothing, rope, plastics, and paper. Hemp seed oil and hemp derivatives such as the nonpsychotropic molecule cannabidiol (CBD) are increasingly showing up as ingredients in personal care products.

Start-up ingredient producers such as Lilu’s Garden and Folium Biosciences are rushing to meet the demand for hemp derivatives. They are capitalizing on ingredients that are shedding their counterculture image and becoming part of the mainstream.

Yet traditional ingredient suppliers such as BASF, Dow, and Evonik Industries are still confused about the regulatory climate and fearful of government actions that could hurt their business should they wholeheartedly embrace hemp. They also question the quality and consistency of the hemp ingredients now available. This is one gold rush they are willing to join late.

Many retailers have no such compunction and are embracing the newfound respectability of hemp-containing personal care products. At the end of March, the US drugstore chains CVS and Walgreens said they would start selling CBD-containing creams, patches, and sprays in a few states where regulations seemed clear. In Walgreens’s case, that means selling topical CBD products at 1,500 stores in nine states.

Small, independent brands are making their way to market. Several of them, including Cannuka, Code of Harmony, and Cannabliss Organic, began selling CBD-infused balms, serums, and soaps in January through the luxury retailer Neiman Marcus in select stores and online. Well-known brands are also getting into the act. In late 2018, Estée Lauder’s Origin line introduced Hello Calm, a face mask with hemp seed oil. Earlier this year, L’Oréal’s Kiehl’s brand launched a hemp seed oil herbal concentrate to “calm” skin prone to blemishes and redness. And Walmart is offering topical products on its website, including a CBD relief and recovery cream.

Converts are amassing. Gerry Gruber, a Michigan farmer, uses a CBD-containing salve to alleviate the pain of arthritis. He buys the salve and ingestible CBD oils at state-licensed shops. “It’s prime arthritis weather now,” he says, “and the salve seems to help.”

The still-active 87-year-old, who chops wood to warm his home over the winter, says he had a root canal recently and alleviated the pain by rubbing the salve on his cheek. “I hope they never take it off the market because I’m going to be a lifelong customer,” he says.

Market research firms are taking note of the allure of cannabis derivatives to a broad range of consumers. Euromonitor calls the legalization of cannabis disruptive and likely to have an impact on many industries, including beverages, tobacco, supplements, and food.

Reviewing the personal care category, Euromonitor points out that hemp seed oil has been around for decades. But the new “superhero ingredient in beauty” is CBD for its “anti-oxidizing, oil balancing, and anti-inflammatory properties.”

“As health becomes intrinsic in every brand’s strategy, cannabis’s remedial and therapeutic credentials present an immediate investment prospect,” says Euromonitor personal care consultant Irina Barbalova. “Cannabis may well become as ubiquitous as any other mainstream beauty ingredient in the not-so-distant future.”

Rival market research firm Mintel is equally optimistic about the prospects for cannabis derivatives in personal care. “Every part of the cannabis plant can be linked to calming and soothing properties in skin care,” says Vivienne Rudd, the firm’s director of innovation and insight. With cannabis having been an illegal substance until recently, “you feel slightly naughty using it,” she says.

Because of the US government’s blessing of hemp and rules in Europe and Canada that also favor it, personal care ingredient makers say they focus on low-THC plant sources. A market research firm dedicated to hemp, New Frontier Data, estimates the size of the US personal care market for hemp seed oil at about $180 million in 2017.

Unlike other parts of the hemp plant, hemp seeds and the oil pressed from them contain little CBD. But these days, CBD is getting the attention. Sean Murphy, director of hemp analytics at New Frontier, says he expects the body care market for CBD will more than double to over $100 million in 2019. The main growth driver now, he says, is topical CBD products sold at big drugstores such as Walgreens. Overall, Euromonitor predicts that the legal market for cannabis-containing products will grow to $166 billion worldwide by 2025.

But do they work? Hemp seed oil itself “definitely” has skin benefits, says Jeanette Jacknin, a board-certified dermatologist specializing in topical application of cannabinoids. The oil is rich in omega-3 fatty acids that are good for moisturizing skin, she says.

The benefits picture is murkier for CBD and other cannabinoids extracted from the hemp plant. CBD is the most prevalent legal cannabinoid, but more than 100 others can be isolated from the plant, Jacknin says.

Plenty of anecdotal evidence exists for the anti-inflammatory and antiaging benefits of CBD; however studies proving efficacy are relatively rare. In the PubMed database, Jacknin has found fewer than two dozen double blind studies supporting the benefits of CBD in treating acne, itchiness, psoriasis, and eczema. She expects more studies will come as hemp’s legal status becomes clearer.

“We all have an endocannabinoid system and receptors that cannabinoids can bind to,” Jacknin says. Some of those receptors are in the skin, she notes, and are thought to help regulate skin health.

Beyond questions of efficacy, many firms don’t label CBD content in their products and don’t offer a third-party certificate of analysis, so consumers don’t really know what they’re getting, Jacknin says, adding, “It’s a total gold rush.”

Major cosmetic ingredient suppliers are aware of the trend but are hesitant to jump on it. “Customers are asking us to consider” hemp-derived ingredients, but it’s too early to introduce something, says Ricardo Luiz Willemann, active ingredients vice president at Evonik. “We are considering it as a product to develop,” he says, “but we have to consider questions of efficacy, and we need to do studies and plan the right claims.” Evonik would want to launch any hemp-derived products globally, Willemann says, and with regulations varying from country to country, that would be difficult to do now.

Two other major ingredient suppliers are more reticent on the subject. A BASF spokesperson indicates the firm has “nothing yet” derived from hemp. Eric Peeters, Dow’s home and personal care business director, says, “We are not interested now in hemp and derivatives, though we see it coming onto the market. Regulations about it are so unclear.”

The farm bill legalizing hemp did not limit the US Food and Drug Administration’s jurisdiction over hemp derivatives in medicine, food, and cosmetics, notes Daniel Shortt, an attorney at Harris Bricken, which has a large cannabis-focused practice. Since the bill passed, the FDA has said that oil, fiber, and protein from hemp seed are generally recognized as safe in food. Because the FDA approved Epidiolex, a CBD-containing epilepsy treatment, the agency decided that CBD and other cannabinoids extracted from the plant can’t be added to food and dietary supplements, Shortt says. The agency has also sent warning letters to makers of CBD products making medical claims. So the FDA may decide the mere presence of CBD makes any product a drug.

Conversely, the FDA could allow cannabinoids in cosmetics to remain on the market and go after only those manufacturers making medical claims, Shortt says. For instance, calling CBD an anti-inflammatory ingredient “probably makes it a drug,” he says. Overall, he notes, the FDA regulates cosmetics more lightly than food or drugs. Because the cosmetics category is so big and CBD is so popular, “it presents a regulatory challenge for FDA,” he says.

For now, the lack of clarity poses problems for ingredient developers. Vince Gruber, who is the nephew of Gerry Gruber, the Minnesota CBD aficionado, says his firm, Jeen International, is interested in developing a skin delivery system for natural oils, including oils with added CBD. But regulatory issues are giving Jeen pause, he says.

Gruber, a director of new technology at Jeen, says that he can get nonstandardized CBD products on the web. But he can’t obtain a standardized CBD from a pharmaceutical-grade ingredient maker to test his firm’s delivery system.

At Folium Biosciences, which calls itself the largest US producer of hemp-derived phytocannabinoids, CEO Kashif Shan says he thinks the FDA will provide more guidance on CBD and the product claims allowable for cosmetics before the end of the year.

But Folium isn’t waiting. The firm says production capacity for its CBD-enriched oil will increase 10-fold to 15,000 kg per month when it opens its newest CO₂ extraction unit in Colorado in August. The firm plans to open extraction facilities in Canada by 2020 and in Greece by 2021. Folium now has 215 employees and expects to have 500 by the end of the year.

Though just 5 years old, the firm has also created a line of CBD-containing edible gummies, animal health products, and cosmetics. It has CBD-containing face moisturizing pearls and has developed a CBD-infused face mask with a South Korean cosmetic maker.

Unlike Folium, hemp cannabinoid start-up Lilu’s Garden uses a water extraction technology to create its products. The firm recently opened a 20,000 kg per day extraction facility in Kentucky that makes use of a 1 m diameter, 12 m tall distillation column to separate various cannabinoids, CEO Tom Guel says.

He and a partner became interested in marijuana and hemp and went to Colorado, a state that legalized the plant early on, to learn about the business. His mother’s experience with an inoperable brain tumor, and her cure, which he attributed to a potent CBD tincture he supplied her, “changed how we looked at this industry.” His mother, he notes, refused all treatments her doctor offered. To scale up production, Guel says, he hired process engineers, chemical engineers, and organic chemists “to do a deep dive in extracts and the technologies of separation.” They considered butane, ethanol, CO₂, and other solvents but decided on water “because that’s as clean as it gets,” he says. The company, which employs about 100 people, makes a full-spectrum cannabinoid oil and what it describes as isolated CBD, cannabinol, and cannabidiolic acid extracts.

For formulators interested in working with specific cannabinoids, Hyasynth Biologicals, a Montreal-based start-up, “focuses on making one cannabinoid at a time” using strains of engineered yeast, says CEO and cofounder Kevin Chen. “For us, the pharmaceutical market seems most promising,” Chen says, but he is also interested in supplying cannabinoids to cosmetic makers.

Chen dropped out of graduate school at McGill University to launch Hyasynth in 2014. To date, the 18-person firm has attracted about $9 million in funding.

Because the company can produce individual cannabinoids using its yeast-based system, it could supply personal care makers who want standardized ingredients. Chen says the firm is now gearing up to offer samples to customers and is looking for partners. “Our technology is engineered so that we can get truly 0% THC cannabinoids,” he says.

The biotech firm Amyris is also developing fermentation-derived cannabinoids. In March, it signed a deal to develop and commercialize technology for a newly formed cannabis company called Lavvan.

As newcomers pile into the cannabinoid business, traditional suppliers of ingredients to the personal care industry caution that they still need research to back up any claims their customers might want to make. But that won’t stop smaller companies from rushing ahead and promising the moon, Jeen’s Gruber warns. “There’s money to be made here,” he says.