Cannabis-infused beauty products are going to grab a piece of a $167 billion market

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Beauty products infused with cannabidiol, or CBD, are going to grab 15% of the $167 billion skincare market in a decade, Jefferies says.
CBD has been linked to a range of potential health benefits, and does not get you high.
Due to this wellness benefit, retailers are selling CBD-based products like teas, beer alternatives, coffee, supplements, and dog treats.
A wave of marijuana legalization has also driven the commercialization of CBD-infused beauty products, according to Jefferies.

Cannabis-infused beauty products are going to flood the skincare market, one Wall Street bank says.

"Consumers’ interest in wellness, natural ingredients, medicinal benefits and the legalization of marijuana in several states/countries have catalyzed interest in CBD beauty," Stephanie Wissink, an analyst at Jefferies said in a note out Tuesday.

She added that beauty products infused with cannabidiol, or CBD, one of the most well-known of more than a hundred different phytochemicals found in cannabis — will generate $25 billion in revenue globally in a decade, representing 15% of the $167 billion skincare market.

Beauty products are a natural extension of CBD in other wellness categories, according to Wissink.

While many natural compounds found in plants of the Cannabis genus, such as tetrahydrocannabinol (THC), have proven to have therapeutic properties, CBD has another huge advantage — It’s non-psychoactive, and based on current regulations, the trace amounts of CBD infused into beauty products cannot "get you high."

Due to this wellness benefit, retailers are already selling CBD-based products like teas, beer alternatives, coffee, supplements, and dog treats.

A recent wave of marijuana legalization has driven the commercialization of CBD-infused beauty products, Wissink said. Last year, Canada and the state of Michigan legalized the recreational use of marijuana, and the US Congress passed the Farm Bill, which legalized hemp, a key source of the CBD.

"From recent discussions with numerous CBD beauty brands, the pathway to market is improving (quality supply, consumer awareness/education/acceptance, retailer support)," she said.

"As with prior themes, as demand growth and TAM are established, a raft of competition is likely to enter the market. But early evidence suggests a more sustainable trend is forming."

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