Despite the CBD industry’s runaway success in the past couple of years, the sector’s position in several territories is tenuous at best. A relatively new product, cannabidiol (“CBD”) has attracted a ton of consumer attention thanks to claims of its medical efficacy. However, experts say that the hype has outpaced science because there is limited research into the possible benefits and risks of CBD. Furthermore, the European Cosmetic Regulation 1224/2009 prohibits the use of cannabis and its extracts in cosmetics. European authorities have been quite strict against firms in the CBD space as a result, passing policies such as the ban on using cannabis extracts such as cannabidiol in cosmetics.
Fortunately for players interested in entering the CBD cosmetics segment, the EU has legalized the use of cannabidiol as an ingredient in cosmetics. This February, the EU’s directorate-general for internal market, industry, entrepreneurship and SMEs added CBD to the list of legal cosmetic ingredients its Cosing guidelines. This is a cosmetic regulations database that lists authorized and outlawed cosmetic ingredients as well as their uses and functions. With this addition, CBD companies that choose to develop CBD-infused cosmetics can do so without fear of persecution from the authorities.
The CBD cosmetics segment has been on the rise for the past couple of years. Studies have found that CBD has anti-inflammatory and antioxidant properties that make it effective at treating skin conditions, including breakouts, acne, eczema and psoriasis. The global CBD cosmetics market was estimated to be worth $633.6 million in 2018, and it is projected to hit a whopping $1.7 billion by 2025 due to increased awareness of the healing power of CBD cosmetics. Demand for CBD, in general, has been on the rise in Europe, and the European CBD market is projected to grow by 400% over the next couple of years.
CBD’s addition to the EU’s list of legal cosmetic ingredients came after the European Industrial Hemp Association, a transnational organization that promotes the objectives of European industrial hemp entrepreneurs, submitted a proposal to the EU asking it to add CBD to the Cosing database. The organization also asked for the inclusion of a trio of new International Nomenclature Cosmetic Ingredient (“INCI”) names — root extracts from Cannabis Sativa, leaf/stem extracts from cannabis sativa and leaf extracts from Cannabis Sativa — as well as the removal of Cannabis Sativa L restrictions.
The infamous Kanavape Case was also partly responsible for CBD’s entry into the Cosing guidelines. Two French businessmen found themselves facing charges when they imported and marketed CBD oil extracted from hemp biomass with the aim of using it in e-cigarettes. Although their actions were in line with EU laws allowing the free movement of goods between member states, national law only allowed CBD that was extracted from hemp fiber and seeds. The court ruled that this French law was at odds with EU regulations and had a similar effect to restrictions on imports.
With this legalization of the use of CBD in cosmetics within the EU bloc, companies such as Flora Growth Corp. (NASDAQ: FLGC) that have beauty products containing cannabidiol could see major bursts of growth as they enter the European market.
NOTE TO INVESTORS: The latest news and updates relating to Flora Growth Corp. (NASDAQ: FLGC) are available in the company’s newsroom athttps://cnw.fm/FLGC
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