CBD-Infused Cosmetics Industry to Expand at a CAGR of 25% from 2020 to 2024

CBD-Infused Cosmetics Market Heats Up

Cannabis continues to be one of the biggest growth industries on Wall Street. Case in point, the global legal marijuana market is expected to reach $70.6 billion by 2028, expanding at a compound annual growth rate (CAGR) of 26.7% from now until then. (Source: “CBD-Infused Products Market Is Expected to Exceed $210 Billion by 2028, at a CAGR of 45.6%,” Financial News Media, August 5, 2021.)

Not all marijuana business segments are created equal, though, and over the coming years, some will significantly outpace others. One market to watch is the cannabidiol (CBD)-infused products segment, in particular the often-overlooked global CBD-infused cosmetics market.

CBD is a non-psychoactive compound found in two kinds of cannabis plants: marijuana and hemp. In contrast, tetrahydrocannabinol (THC), which gets people high, is only found in marijuana plants.

CBD-infused cosmetics include topicals like balms, gels, lotions, and salves that are applied directly to the skin. They’re used for a wide variety of symptoms, including localized pain, inflammation, and muscle soreness.

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An emerging body of research is showing that CBD-infused topicals can be used to treat additional issues, including arthritis, headaches, cramping, dermatitis, and psoriasis.

Because of the increased adoption of CBD-infused products, the global CBD market is projected to experience massive growth over the coming years.

Between 2021 and 2028, the CBD-infused product market is forecast to reach $216.8 billion, growing at a CAGR of 45.6%. (Source: “The Worldwide CBD-infused Products Industry is Expected to Reach $216.8 Billion by 2028,” Cision PR Newswire, July 30, 2021.)

It’s tough to think that investors would shy away from growth projections like that.

Based on type, the edibles segment accounts for the largest share of the CBD-infused market. But the cosmetics segment is expected to erode some of that dominance. During the 2020-2024 period, the CBD-infused cosmetics market is projected to grow by $2.2 billion, expanding at a CAGR of almost 25%.

The U.S. and Canada are leading that surge, due to Canada legalizing both medical and recreational cannabis and at least 36 U.S. states legalizing medical marijuana. Other key markets for CBD-infused cosmetics include the U.K., Germany, China, and Mexico.

While the term “cosmetics industry” might conjure images of thick blue eyeshadow and fake eyelashes, it’s a lot broader than that, with subsegments that include skincare, fragrances, haircare, and—of course—makeup.

Are CBD-infused personal care products worth the hype?

While there hasn’t been a ton of research done on the benefits of CBD, some studies have shown that the substance has anti-inflammatory and anti-oxidant properties and that it can help with skin problems like acne.

People want to look and feel healthy and younger. That’s why the global beauty and personal care market is valued at $422.0 billion and is expected to reach $558.0 billion by 2026.

If cannabis companies can provide people with better options for specialty skin care and other types of personal care, more power to them.

Which cannabis stocks could be the biggest winners?

Many companies have entered the CBD-infused cosmetics market.

American actress Kristen Bell recently launched a CDB skincare brand with Cronos Group Inc (NASDAQ:CRON).

Valens Company Inc (TSE:VLNS, OTCMKTS:VLNCF) sells health and wellness products, including CBD-infused bath bombs.

Amyris Inc (NASDAQ:AMRS) is a biotechnology company that recently introduced a new range of CBD health products focused on sustainably sourced, natural cannabinoids.

Analyst Take

Thanks to the legalization of medical and recreational cannabis in many areas, there has been a raft of innovative ways to consume cannabis.

Because not everyone likes to smoke pot nor feel its kaleidoscopic effects, one of the biggest winners over the next few years will be CBD-infused products. Of those products, cosmetics represent some of the most compelling opportunities for investors.

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