Cannabis Cosmeceuticals: A NEW Market With A $700B Prize

    Stockhouse | May 8, 2019

    It’s an understatement to say that there is a great deal of coverage of the cannabis space at Stockhouse. Indeed, some investors have questioned whether there is too much “cannabis” here. Our response is that there are very good reasons why Stockhouse devotes so much time, energy and coverage to cannabis and the investment opportunities associated with it.

    Thanks to nearly 100 years of cannabis Prohibition, a (literal) world of cannabis commercial opportunities are opening up – virtually simultaneously. It’s difficult to even describe cannabis as a sector since commercial opportunities associated with cannabis extend across dozens of industries.

    Cannabis as medicine: both licensed/approved pharmaceutical products and over-the-counter treatments. Cannabis as a superior recreational drug: both non-toxic and non-addictive. Cannabis as a health supplement. Cannabis as a potent nutritional supplement (or simply cannabis as food).

    Then there are the thousands of existing commercial and industrial applications for the hemp sub-species of cannabis. New commercial applications derived from cannabis are being put onto the drawing board or are already being commercialized, on practically a weekly basis.

    Cannabis is very simply the most versatile and commercially useful species of plant on Earth. And it is benign.

    “Cannabinoids” (the active ingredients in the cannabis plant) are produced naturally in the human body. Known as endocannabinoids, there is a growing medical consensus that these (endo)cannabinoids play an important role in regulating and promoting human health.

    For all of these reasons, it should come as no great surprise to investors to see that there are a number of cannabis companies who are devising commercial applications for cannabis that target the beauty, skin care, and anti-aging products market. Investors who follow the “cosmeceuticals” space (and all women) know: this is Big Business.

    In a February 2019 article, a market research firm estimated the “beauty and personal care products” market growing to US$717.6 billion by 2026, at a very solid CAGR of 7.2%. While women have always been the primary consumer base driving this market, Acumen Research and Consulting notes that:

    Developing mindfulness about wellbeing, health, and individual preparing and appearance among men is anticipated to represent an ascent in the need for men’s prepping products.

    In regional terms, the Asia-Pacific region is seen as providing the largest growth markets, most notably the economies of China, India, and Japan. Now cannabis companies are positioning themselves to acquire a large presence in this marketplace.

    Stockhouse went to the source for some further insights into opportunities in this space. We asked Terry Howlett, President of Ovation Science Inc. (CSE: OVAT, Forum) two questions: what attracted Ovation to focus its energies on cannabis-based skin care and anti-aging products, and what potential does the Company see for cannabis-based products to claim market share here?

    “Our background is twenty plus years developing skin care products for the dermatology market. So when we were first introduced to the prospect of formulating topical cannabis products with our patented delivery system we thought we could make a huge impact with our science-based products. We developed our ARLO Beauty line of skin care products as research shows that CBD from hemp, when delivered as effectively as we do, can have a great benefit in topical skin care products due to its anti-inflammatory and antioxidant properties. We believe that CBD will be disruptive in the personal care market not just for anti-aging but also to treat a number of skin conditions.”

    Opportunity.

    Cannabis companies entering this large sector aren’t simply seeing a chance to claim a small portion of this revenue pie. With cannabis being a benign and potent natural input for the manufacturing of these products, cannabis beauty-and-skin-care companies see the potential for cannabis-based products to acquire dominant positions.

    Women have always had a strong appetite for beauty and anti-aging products. As rising incomes in other regions create additional demographics of middle-class consumers, demand for such luxury products is coming from entirely new sources. Greater image-consciousness among men is making this a rising demographic within this growth market.

    And cannabis companies are already making an impact in these markets. As noted above, Ovation Science has already rolled out a line of CBD-based skin-care products derived from hemp.

    An article at MBG Lifestyle is especially effusive about the potential of hemp oil as an anti-oxidant. The Yield Growth Corp (CSE: BOSS, OTCQB: BOSQF, Forum) is developing its own broad line of hemp oil-derived beauty products under its “Urban Juve” label. Online beauty subscription giant ipsy recently contracted with BOSS to carry their products in the ipsy GlamBag.

    Khiron Life Sciences Corp (TSX: V.KHRN, OTCQB: KHRNF, Forum)is already a leader in cannabis in Latin America, a region with a population in excess of 600 million, and with cannabis normalization steadily spreading through these nations. Khiron has recently signed multi-channel distribution agreements for broad distribution of its cannabis-based wellness and beauty products across Columbia.

    An important avenue for cannabis commercialization is the development of new technologies for the delivery of the cannabinoids in the cannabis plant. Nanosphere Health Sciences Inc (CSE: NSHS, OTCQB: NSHSF, Forum) has developed patented “nanoparticle” delivery for cannabinoids. Now Nanosphere is using this cannabis-derived delivery technology for the development of unique skin-care and anti-aging products.

    Cannabis is big news at Stockhouse because the cannabis “industry” has the potential to make an enormous impact across numerous industries. Cannabis investors are already familiar with the potential of cannabis to revolutionize healthcare and as a safer recreational drug option. Now investors need to also focus on the potential of cannabinoid-based products to transform the marketplace for beauty, skin-care, and anti-aging products.

    Ubika Research/SmallCapPower has received compensation from OVATION Science Inc. to provide analyst research coverage. For full disclosure please visit here >>

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