With the recent advent of new products with cannabidiol (CBD)-infused formulas hitting the market, the potential for the next big entry into the cannabis sector could come from a personal care products giant. A potential partnership with a personal care products major could come through one of the companies is developing new CBD products, such as The Yield Growth Corp. (CSE:BOSS) (OTC:BOSQF), Canopy Growth Corp. (NYSE:CGC) (TSX:WEED), Charlotte’s Web Holdings, Inc. (OTC: CWBHF) (CSE: CWEB), Green Growth Brands (CSE:GGB) (OTC:GGBXF), and Tilray, Inc. (NASDAQ:TLRY).
The medical benefits of the non-psychoactive cannabinoid called cannabidiol (CBD) have been known for over 10 years. Now CBD products have become an instant hit among multiple demographics, and is moving from the fringe to mainstream acceptance.
The result is a wave of new products coming from cannabis companies, such as Urban Juve Provisions Inc.—a 100%-owned subsidiary of The Yield Growth Corp. (CSE:BOSS) (OTC:BOSQF), which has 50 formulas and sells hemp-based products based on a new proprietary ingredient. Through its management, Urban Juve presents a tangible connection between cannabis and the cosmetics industry.
Company President Sandi Lesueur, and Chairman Thomas Bond both served integral roles with M.A.C. Cosmetics, prior to entering the cannabis space. Leseur designed and launched several product lines, while Bond served as COO and CFO during the leadup to its high-profile sale to Estee Lauder. Lesueur and Bond’s addition to The Yield Growth Corp. round out a team of directors and officers that includes a who’s who from Aritzia, Skechers, Pepsi, Coca-Cola and now M.A.C. Cosmetics. Through Yield’s other subsidiary Urban Juve Topicals, the company has a deal signed to launch its CBD and THC formulas in the state of Oregon through a network of 400 stores.
It’s connections such as these, between cannabis and cosmetics/personal care that are likely set to become more commonplace.
Cosmetics and Cannabis Forming a Perfect Marriage
Other major sectors are already seeing the potential of incorporating cannabis assets into their fold—such as tobacco, alcohol, and other beverages. Given the potential of the CBD market, when mixed with growing personal care products sector, it’s hard to imagine that there won’t be a major such as P&G, Estée Lauder Companies Inc. (NYSE:EL), L’Oréal S.A. (OTC:LRLCF), Nu Skin Enterprises, Inc. (NYSE:NUS), Inter Parfums, Inc. (NASDAQ:IPAR), and Coty Inc. (NYSE:COTY).
So far, the sector is slowly warming up to the cannabis revolution. Estée Lauder Origins recently launched the Hello, Calm mask, made from cannabis sativa seed oil.
Back in October, former Procter & Gamble Company (NYSE:PG) executive Peter McDonough joined a Toronto-based marijuana and hemp products research and development firm. Less than a month prior to that, multinational personal care and beauty store chain Sephora began selling a cannabis-infused face mask.
Now the mainstream retail space is taking a chance on putting these new CBD-infused products on their shelves. Back in the fall of last year, footwear retailer DSW (NYSE:DSW) gave CBD products a chance on their shelves, through a deal with Green Growth Brands, to place its Seventh Sense products on sale. The experiment was a resounding success, leading to a deal that plans to sell nearly 55,000 more units of Seventh Sense across 96 of its 515 US stores.
That deal came through the relationships formed by GGB’s management and their former companies in the retail space. This is where the potential for another deal in the space seems almost inevitable.
According to cannabis industry analysts the Brightfield Group, the hemp-CBD market alone could hit $22 billion by 2022. The cosmetics giants will likely not be able to ignore the growing CBD wave for much longer.
POTENTIAL CBD-PRODUCT SUITORS
Like Green Growth Brands with its prior relationships with DSW, attention is being given to companies such as The Yield Growth Corp. (CSE:BOSS) (OTC:BOSQF) and its CBD-infused line of products from its subsidiary, Urban Juve Provisions Inc.
Urban Juve recently announced it had registered three Urban Juve Skin Exfoliants as cosmetics with Health Canada. Getting itself prepared ahead of cannabis topicals legalization in Canada, Urban Juve now has registered a total of 29 products with Health Canada, while also have an additional 50 formulas of hemp-based products based on a new proprietary ingredient—extracted with patent pending technology.
These new exfoliants are meticulously formulated with non-toxic ingredients to benefit each of the three targeted skin types as understood in the Ayurvedic system. Each body exfoliant combines botanical oils with a base of finely ground Himalayan Salt rich in 84 trace minerals for immediate skin absorption. The products have passed all required testing for manufacture in Canada. The product will be sold in 100mL glass jars with a suggested retail price of $25 per unit.
Through its subsidiary UJ Topicals, Yield is ready to roll out their products in a US market. Already they’ve signed a deal to launch in Oregon through a network of 400 stores to sale an array of their CBD and THC formulas. With the deal, the team is already gaining momentum for its launch.
At the helm of Urban Juve, through parent group The Yield Growth Corp., is a team of directors and officers with experience working at multi-billion dollar international companies. These include M.A.C Cosmetics, Aritzia, Skechers, Best Buy, Future Shop, Pepsi and Coca-Cola. Much like Green Growth Brands, the connections in the greater retail world for The Yield Growth Corp. are strong.
Now with roughly 50+ products set to enter the market in 2019, the Urban Juve line is primed for the opening up of CBD products on the North American market.
With cannabis sativa hemp root oil as its key ingredient, Urban Juve’s product line combines natural and pure essential oil-based formulations to create quality products that are now available online and will soon be available at select retail stores across Canada.
The company’s introductory product line will include an anti-aging serum and a lip balm. The premium Anti-Aging Serum (selling for $85 CDN) incorporates the soothing qualities of hemp root and hemp seed oil with a proprietary blend of essential oils, tailored to absorb into and hydrate skin cells. The lip balm (selling for $10 CDN) creates a soothing protective layer with coconut oil and beeswax, which provides a healthy, hydrating environment for the critical hemp root and seed oils to moisturize and freshen.
With 50 SKUs of formulas for hemp-based products based on a new proprietary ingredient (extracted through a patent pending technology) ready for rollout upon full legalization, The Yield Growth Corp. and its subsidiary Urban Juve, are prime targets for either a partnership or outright takeover from a cosmetics major.
FURTHER CBD PERSONAL CARE DEVELOPMENTS
Canopy Growth Corp. (NYSE:CGC) (TSX:WEED)
While much of the company’s new product expectations are being put upon its deal with Constellation Brands to develop new cannabinoid-infused beverages and possibly foods, Canopy Growth is also developing an array of CBD products on its own. Later this year, Canopy will likely unveil its new cannabis drinks, which officials promise will offer low-calorie, no hangover, healthier alternatives to alcohol. However, the company is also working on CBD products such as ones that can treat anxiety in pets, which is another potentially huge market. The US pet industry expenditures are estimated to by $72.13 billion for 2018, according to the American Pet Products Association and the global pet care market is expected to reach $202.6 billion by 2025.
Charlotte’s Web Holdings, Inc. (OTC: CWBHF) (CSE: CWEB)
Whole-plant hemp extract product maker Charlotte’s Web assured the market that it would have the supply necessary to meet its products’ demand, thanks to a bumper crop of harvested hemp. Compared to its 2017 grow season, the company’s 2018 harvested hemp results were 10 times higher. The 100% US-grown hemp will be processed through proprietary extraction methods to create whole plant hemp extract that will be used in Charlotte’s Web products for sale this year and next year. Charlotte’s Web products are sold throughout the US through select distributors, brick and mortar retailers, and online through the company’s website. Products sold feature an array that includes CBD oil tinctures (liquid products), CBD capsules, CBD topicals, as well as CBD pet products.
Green Growth Brands (CSE:GGB) (OTC:GGBXF)
Leveraging the company’s management’s connections to the retail world, Green Growth Brands signed a large deal with shoe retailer DSW to sell Green Growth Brands CBD products in DSW stores. The agreement will have GGB selling personal care products under the Seventh Sense Botanical Therapy brand at select DSW stores throughout the US. The Seventh Sense brand offers high-quality CBD-infused products and affordable prices, including muscle balms, body lotions, body washes and foot creams. The agreement came on the heels of a successful test phase conducted last fall, where GGB sold select Seventh Sense products in 10 DSW stores. During the first 10 weeks of the test period, 74.4% of the product presented on shelves was sold, significantly exceeding expectations.
Tilray, Inc. (NASDAQ:TLRY)
Following in the footsteps of Green Growth Brands, Tilray signed its own long-term revenue-sharing agreement with a shoe retailer. Tilray recently announced its deal to market and distribute cannabis products with Authentic Brands Group, which owns the shoe brands Nine West, Airwalk, Frye, and Tretorn sneakers. ABG has a global retail footprint of over 100,000 points of sale, and more than 4,500 branded freestanding stores and shop-in-shops. The deal is quite large, as Tilray is initially paying ABG $100 million and as much as $250 million in cash and stock, subject to milestones. Tilray will have the right to receive up to 49% of the net revenue from cannabis products bearing ABF brands, with a guaranteed minimum payment of up to $10 million annually for 10 years, which guarantees Tilray will at minimum recoup its original payment. Tirlay will be the preferred supplier of active CBD ingredients for products within the portfolio of brands, including muscle rubs and lip balms under the Spyder ski wear brand.
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