As the wave of positive reviews roll in, hemp-infused beauty products containing the non-psychoactive cannabinoid known as CBD are piling up the praise. But it’s in the investment world where the products are gaining even more infatuation, as analysts are predicting the CBD Beauty market to reach $25 billion in 10 years. As the hemp-infused beauty potential increases, so too does interest in the companies producing these products, including The Yield Growth Corp. (CSE:BOSS) (OTC:BOSQF), Green Growth Brands (CSE:GGB) (OTC:GGBXF), Cronos Group Inc. (NASDAQ:CRON)(TSX:CRON), Khiron Life Sciences Corp. (OTC:KHRNF)(TSX.V:KHRN), and The Estée Lauder Companies Inc. (NYSE:EL).
CBD skin care is hot, it’s hip, and it’s gaining traction across multiple demographics. However, among publicly-traded companies, there are still only a few companies that have gotten into the space early. One of the first to get into the market is innovative product developers The Yield Growth Corp. (CSE:BOSS) (OTC:BOSQF)—parent company of the popular brands Urban Juve Wellness, and Wright & Well.
Most recently, under the Urban Juve line, The Yield Growth Corp. (CSE:BOSS) (OTC:BOSQF) announced plans to target the growing luxury spa market. With a new CBD-infused Urban Juve Spa Treatment line, The Yield Growth is targeting high-end, reputable spas that are increasingly embracing cannabis-infused products for treatments—such as leading Philadelphia luxury hotel, The Logan, as recently reported by Forbes.
CBD-infused beauty and wellness products are also gaining exposure on mainstream shelves.
Front-facing with its Seventh Sense product line, Green Growth Brands (CSE:GGB) (OTC:GGBXF) has opened more than 50 stores in malls across the United States. The company’s plans for the remainder of 2019 will see ongoing action with the rapid rollout of new stores.
At beauty counters across the country, cosmetics giant The Estée Lauder Companies Inc. (NYSE:EL) launched its own cannabis-derived products. Through its Origins brand, Estée Lauder launched the Hello, Calm mask made of cannabis sativa seed oil, which paves the way into mainstream stores like Barneys and Neiman.
Under its Kuida Skin Care brand, Khiron Life Sciences Corp. (OTC:KHRNF)(TSX.V:KHRN) recently showcased its wares to over 40,000 retail buyers, distributors, and beauty industry professionals at the CosmoProf North America conference at the end of July. Ahead of the conference, Khiron announced a 50/50 joint venture with Dixie Brands for enhanced marketing and distribution in the US market.
Making its own aggressive move into the US market, Cronos Group Inc. (NASDAQ:CRON) (TSX:CRON) acquired popular CBD beauty brand Lord Jones. The $300-million deal includes the acquisition of a line of CBD-infused lotions, gummies, bath salts, and oils.
MERGERS AND ACQUISITIONS MANIA UNDERWAY
The Cronos/Lord Jones deal highlights a potential for more M&A activity in the CBD beauty space in the coming months. Cronos itself received a $1.8 billion investment late last year from tobaccos giant Altria, which took a 45% stake in the company.
Rather than going it alone, companies are looking for any kind of advantage it can gain to get products in front of new batches of consumers. The Yield Growth Corp. (CSE:BOSS) (OTC:BOSQF) recently announced a deal for the global rights to 8 cannabis product topical formulas for men, with Antler Retail that includes hair pomade, beard oil, shaving cream, deodorant and 4 essential oil colognes.
The Yield Growth Corp. (CSE:BOSS) (OTC:BOSQF) in particular has been racking up partnerships and distribution deals for the last few months, including: an alliance with on-demand delivery service ParcelPal Technology Inc. (CSE:PKG) (OTC:PTNYF); a definitive agreement for exclusive distribution of Urban Juve products in Greece and Cyprus; a marketing and sales alliance with beauty commerce giant ipsy; sales through luxury PopSquare kiosks in Hong Kong; and engaging seasoned New York agency Cornerstone Strategic Branding for a new hemp and cannabis beverage business.
As it accumulates these notable partnerships and deals, The Yield Growth Corp. (CSE:BOSS) (OTC:BOSQF) is priming itself possibly for its own headline grabber not unlike the recent Cronos/Lord Jones deal. Currently, Urban Juve and Wrigth & Well products are being sold in over 130 retail locations in North America, as well as shipping internationally as well.
The company’s strategy is driven by its proprietary manufacturing technique that derives high concentration of terpenes in hemp root oil. Legally viable in several markets, hemp root oil production is one of Yield Growth’s biggest strengths that separates it from most of the field.
While much research has been undertaken to understand the potential health benefits for other parts of the cannabis plant, Yield Growth’s research and development to date is focused on the plant’s root. According to a review paper written by Dr. Ethan Russo, medical and therapeutic use of the cannabis root throughout history includes uses to treat fever, inflammation, arthritis, joint pain, burns and tumors.
“With the hemp plant supplying such a dynamic range of health benefits for the above ground portion of the plant, why should we expect anything less from the roots, the very foundation of the plant?” says Bhavna Solecki, Director of Product Development of The Yield Growth.
PRIMING FOR UPCOMING CBD POTENTIAL
Since its inception, The Yield Growth Corp. (CSE:BOSS) (OTC:BOSQF) has targeted the significant potential of a CBD beauty and wellness market. Ahead of the herd, the Urban Juve brand launched in December 2018, with a product line that included anti-aging serum and a lip balm.
Back in February, analysts at Piper Jaffray said they could see further growth in this industry which could boost the overall CBD market to be worth up to $100 billion. Much of the growth they attribute to the growing popularity of CBD beauty and wellness products.
Growing popularity of the Urban Juve line has gone on to grow Yield Growth into a small empire, led by its management team whose deep experience with global brands includes Johnson & Johnson, Procter & Gamble, M·A·C Cosmetics, Skechers, Best Buy, Aritzia, Coca-Cola and Pepsi Corporation.
Much like Yield Growth, Green Growth Brands (CSE:GGB) (OTC:GGBXF) also has a team of experts with diverse experience—mostly specializing in the major retail space. Led by a CEO whose resume includes c-level roles with Victoria’s Secret, American Eagle Outfitters and more, their wholly-owned Seventh Sense line of CBD products is showing up on mainstream shelves as well as the shelves in their own stores.
Household name, Estée Lauder (NYSE:EL) is also doing its part to remove any remaining stigma surrounding the CBD market. Sales of the cannabis-based Hello, Calm face mask began last fall on the Sephora website. Thanks to EL’s inroads, now more than 35,000 US retailers have shown a keen interest in carrying CBD products.
Prior to EL, Lord Jones was the first CBD brand to land a spot in beauty retailer Sephora. Now with the sale to Cronos Group Inc. (NASDAQ:CRON) (TSX:CRON), Cronos plans to capitalize with Lord Jones on a growing number of consumers clamoring for beauty products, foods and oils containing the cannabis compound in the fast-growing US CBD market.
But the US isn’t the only market that could surge for these types of products.
Based out of South America, Khiron Life Sciences Corp. (OTC:KHRNF)(TSX.V:KHRN) announced in July that it obtained final approval to commercialize CBD production, as well as approval for an additional 17 strains from Colombian Agricultural Institute, bringing its total up to 22 strains. The company expects sales by Q3 2019.
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