Cannabis Cosmetics: a Rising Segment
Since 2019, the sale of cannabis products for topical use has been legalized in Canada, the country where our columnist Tiago Zamponi resides, and this is the central theme of this article.
By Tiago Zamponi
Topical cannabis products, such as skin creams, lotions, bath bombs, massage oils, and lubricants, became legal in Canada in late 2019, but the category remains small compared to other cannabis-derived products that entered the market at the same time, including vape pens, edibles, and beverages. However, the significant potential in this segment cannot be ignored.
In this sense, we need to understand that the speed at which new cannabis-based products emerge is not the same as the market absorbs, either because there are still some stigmas regarding the plant, or because there is a lot of regulation and little information.
The most well-known form of cannabis use is through smoking the flower. However, there are oils, edibles, beverages, and topical products. Thus, consumers who do not like smoking can use cannabis in one of these other forms.
Therefore, it is necessary to invest in product information to increase awareness, not only among consumers but also among retail cannabis store employees, known as Budtenders. As mentioned in another article, Budtenders are important in consumer education, as they are the only ones who can interact with them.
Furthermore, it is crucial to increase the availability of topical products in the market so that consumers can have more access to this type of market. Due to the limited supply at the moment, given that it has only been 3 years since legalization and the market is still maturing, there is not much data regarding these products. The most recent information is from March 2021, almost a year ago. (image below)
As can be seen, monthly sales of topical products through recreational channels only surpassed the 10,000 unit mark in July 2020. Sales in March 2021 exceeded 24,000 units, still a very small value compared to other categories, but it demonstrates a significant growth potential.
Sales could increase even more with regulatory changes, such as making some cannabis health products available outside regulated stores (dispensaries), which is under consideration.
According to Headset (a leading cannabis analytics company in Canada), cosmetic sales in 2020 in adult-use stores in Alberta, British Columbia, and Ontario totaled nearly CAD$5 million (Alberta: CA$1.38 million, BC: CA$1.29 million, Ontario: CA$1.87 million).
It is important to note that in Ontario - Canada's largest provincial cannabis market - cannabis topical products were the second smallest category in terms of dollars during the third quarter of 2020, lagging behind all other cannabis derivative categories and representing only 0.6% of sales. This indicates a lack of information and product options.
An interesting fact is that recreational sales of cosmetics are higher than medicinal sales. This is because there are still few studies on the benefits and which diseases these products could be used for. Furthermore, promoting the potential benefits of cannabis dermatological products can be challenging in the Canadian recreational market due to restrictions on promotions and advertising – but not impossible. Regulation needs to be modified to meet market needs.
A study conducted in November 2021 showed that cannabis was used topically at least once by 24.3% of the survey respondents. The most common form of topical cannabis was creams (26.2%). The most common dermatological conditions treated with topical cannabis include atopic dermatitis (25%), acne (19%), and anti-aging (16%); for non-dermatological conditions, common uses were for joint stiffness or tendinitis (30%) and headaches and migraines (27%). Topical cannabis was reported as more effective for joint stiffness and tendinitis, general muscle pain, headaches, eczema, itching, acne, and psoriasis.
The study concluded that Canadians use cannabis products for topical use for a wide range of systemic and dermatological purposes, most of which have limited evidence. Future clinical studies are needed to elucidate the therapeutic efficacy and safety of topical cannabis.
Although the numbers are not significant at the moment, topicals have a promising future, as preliminary studies have shown efficacy in treating some diseases, as reported above, and that, combined with information, product diversity, and a regulatory change, will allow this segment to grow.
The opinions expressed in this article are personal and do not necessarily reflect the position of Sechat.
About the author:
Tiago Zamponi is a lawyer, lives in Canada, works in business development, and is currently the sales director at Molecule, a Canadian cannabis beverage company.