Latest News: CBD Beauty Growth, Marketing Lawsuits, Fresh Thyme Adds CBD and CES Cannabis Award

Here at HealthMJ, we like to keep a pulse on all things trending within the CBD niche and greater cannabis industry in 2020. Today, we have four of the needle-moving stories to cover in an effort to keep cultivating headlines that matter and have long-lasting sticking power as the marijuana and hemp markets mature.

First, we will review the social report analysis about CBD's beauty market growth and demand for cannabis-infused cosmetics, then talk about the rise in CBD-related lawsuits regarding wrongful product advertising claims. Next up we will talk about Fresh Thyme Farmers Market grocery store chain stocking more CBD supplements and wrap up with an interesting story coming from the 2020 Consumer Electronics Show in Las Vegas about a new cannabis product coming to market.

The Rise of CBD Beauty is Going Social via Instagram

• CBD is gaining traction on top social media platform, Instagram, who has hundreds of millions of users, through the analysis considered 195 million public posts.
• The sector that seems to have the most interest from the beauty industry.

Instagram was founded in 2010, launching a major social media platform that had over a million users in less than three months. Presently, it is used by well over half a billion people on a monthly basis alone, making it a good indicator of the trends in the market.

Recently, a comparative analytics platform called Social Standards released their own analysis of 195 million public Instagram posts in the United States to see how the public views CBD.

In the 2019 CBD Report, the platform examined the consumer retention of CBD, as well as four main characteristics that consumers generally associate with the hemp-based compound. Devon Bergman, the CEO and co-founder of Social Standards, stated,

“Our data shows that CBD isn’t entirely a new thing – consumers have been talking about it on social media for years. In recent months, we’ve seen conversation volume start to plateau, suggesting that CBD is no longer niche and is becoming mainstream.”

As Bergman sees it, regulatory matters need to be settled before brands can truly see CBD as an opportunity for profit. The trends on Instagram clearly indicate that consumers want natural solutions to their conditions, and they have faith that CBD could potentially offer therapeutic results.

The beauty space has clearly gained a lot of interest in CBD in skincare products, due to the effects that it seemingly offers for inflammation. The personal care sector is interested in the effects that CBD has on pain relief, leading this part of the industry to be focused on post-workout muscle recovery. The food and beverage sector is also seeking the natural healing benefits, but the primary focus of these consumers is on the quality of these products. The brands that highlight their organic or premium quality are the ones most likely to see the most victory with their products.

One of the other discoveries is that there is substantial consumer loyalty with these products, which suggests that buyers truly see results and believe in the effects of CBD.

This may come as no surprise, as many experts are in agreement that the CBD cosmetic market is set to experience the biggest growth path in the new decade, as forecasted in our 2020 cannabidiol outlook. Next, to put a little cold water on the hottest trend in the supplement industry, let's take a quick look at the legal troubles brewing inside the CBD industry.

Improper CBD Advertising Claims Result in Uptick of Class-Action Lawsuits

• The FDA sent out 15 warning letters in November to manufacturers of CBD.
• The current lawsuits target no less than four manufacturers of the industry.

The CBD industry reached a major victory at the end of 2018, as the Farm Bill made the sale, cultivation, and ownership of hemp legal, which extended to CBD extracts as well. Through the year, the industry focused on expanding the repertoire of products that consumers can use with CBD, but it seems that a lot of these companies went about the process in the wrong way.

The Food and Drug Administration ultimately had to send out 15 warning letters to manufacturers of the groundbreaking compound in November last year (and in March). The manufacturers seemingly sold their products with marketing tactics and claims that violated rules outlined in the Food, Drug, and Cosmetic Act. There have been many lawsuits against these types of companies already, going after companies for their false claims on how CBD benefits consumers and how much CBD can be found in a product. However, the new lawsuits are aggressively going after the companies for having any CBD at all.

At least four manufacturers are being pursued in the lawsuits, including Charlotte’s Web and CV Sciences. Charlotte’s Web brings in an annual revenue of $70 million, while CV Sciences follows at about $48 million in sales for CBD alone in 2018. Both of these companies are top companies in the industry, but the writing in the lawsuits seem to include all customers in the US that have made purchases.

The lawsuits push for the judge to require the manufacturers to issue refunds on any profits they’ve earned as a result of selling the products. If the judge agrees with the plaintiffs that the products were illegal, then the CBD industry could see a major hit. Furthermore, if the lawsuits are ultimately successful, then consumers have inherently been tricked into purchasing an illegal substance, and even Bloomberg Law suggests that additional suits could be filed for other health substances if the case ends up succeeding.

Realistically, the CBD industry is likely already seasoned in this way, since there’s yet to be any reliable scientific evidence to support the claims of its benefits. The only real approach that CBD companies can take is to make unproven or even vague statements to help the user understand what CBD may help with. There seems to be a gray area that essentially circumvents these requirements with the help of influencers, who are not bound by these laws.

Of the little research available in the industry, CBD appears to be able to deal with anxiety, though incredibly high levels are required to achieve this effect. For instance, to potentially reduce these symptoms, approximately 60 Sunday Scaries CBD gummies would be necessary. Statements like these are exactly what the FDA has gone after in recent months, as baseless health claims violate numerous laws concerning dietary supplements.

What happened to the companies? The answer is mostly a mystery, as the actions of the industry seemingly just slapped the company on the wrist. If there’s no consequences or regulations on the industry for bad players, how will it survive?

Jonathan Miller, the general counsel of the U.S. Hemp Roundtable, perhaps has predicted the future of the industry the best:

“We’re just going to see a lot of this sort of mischief go on until the FDA does what it needs to be doing, which is establishing a formal regulatory framework for CBD.”

There was also a quote from a legal cannabis specialist, Ranjeev Dhillon, who said this in regards to more regulatory and financial troubles transpiring in the fast-paced growth of the CBD market:

“We have had a number of busy years in the cannabis industry, and I think we will continue to see that in 2020. But there will be a shift to more bankruptcy and insolvency type of work in the next 12 months.”

It will be interesting to see how these legal battles shake out as we start to see a separation of the winners from the losers. Next, let's cover the retail market expansion of CBD as it makes its way into major Farmers Market grocery store, Fresh Thyme.

Fresh Thyme Farmers Market Stores to Expand CBD Product Collection

• CBD product collections are expanding by 65% at Fresh Thyme Farmers Market locations

Fresh Thyme Farmers Market, who has 77 different store locations throughout the Midwest, just announced plans to expand their CBD oil-infused product selection to 10 different states.

Senior Director of the grocery section at Fresh Thyme, Jonathan Lawrence spoke regarding this matter and disclosed that such a move was taken to show their commitment in promoting healthy living along with what the 99 new CBD products will cover. In particular, he was referenced saying:

“We are excited to announce the expansion of our CBD items in the health and beauty, supplement and pet product categories.”

Fresh Thyme first shelved CBD products back in November 2018, and this new endeavor is expected to increase product presence by 65 percent. The bulk of the 99 additions fall in health and beauty (52.5%) followed by supplements (31.3%) and pet products (16.6%). As for the locations to witness said expansion, they include Kentucky, Illinois, Michigan, Minnesota, Missouri, Indiana, Nebraska, Ohio, Pennsylvania and Wisconsin.

How have the products been chosen? As per Lawrence, consumer demand was an important factor. In this case, ensuring that the grocery store did not fall short or selections was a must. Another obvious factor was that of safety, which was checked off their list by consulting industry experts. Finally, manufacturing was emphasized on, hence each selected product was required to be prepared in a cGMP facility to make the cut.

Keep Labs Banned from Using “Cannabis” at CES Despite Innovation Award Honoree Win

• The CES categorized the device as a Home Appliance, though the creators state that it is exclusively designed as a storage container for cannabis.
• The company will not be featured on the show floor, as the creators refused to pull the term “cannabis” from their product information or their marketing materials.

There is substantial controversy around cannabis as an available substance, but it may be surprising that even the term is taboo in some areas, even at the CES awards. According to a recent article with TechCrunch, Keep Labs was given the Innovation Award Honoree award, but they were given a stipulation – they are not allowed to say the word “cannabis” on the show floor. The only way that Keep Labs will see their signage, marketing materials, or products at the event if there are no cannabis products or paraphernalia.

For any company, becoming a nominee is an honor, but the nomination of a product that is designed exclusively for cannabis is practically historic. As it stands, this nomination is the first time that a company focused on marijuana has been the recipient of an award from CES. Even though Keep Labs managed to win one of the top awards at CES, the company chose against exhibiting on the floor, as it wasn’t in their best interest. However, the company is still featured on the official website, and Keep Labs doesn’t shy away from using the banned word through their entire description.

The Keep device is meant for storing cannabis for freshness and safety, though it is disguised as a smart speaker that features a clock. By engaging the lock, the user opens the top to show multiple storage containers. The device is secure and offers mobile alerts, a hermetic seal, and a built-in scale. The creation of this device was due to the work of two Canadian dads after a friend accidentally consumed gummies infused with cannabis.

Though the creators sought out a way to securely store cannabis items, their search was ultimately a failure. However, it made Philip Wilkins and Ben Glicksman acutely aware of this opportunity to create a new product for the industry. Glicksman and Wilkins decided to abandon their former careers as a venture capital attorney and business owner (respectively) to create their own company.

The device can be purchased in either chalk-white or slate black, allowing users to secure cannabis without having to hide it. The device is protected with facial recognition software, and the user gets a smartphone notification if anyone tampers with it. With the airtight seal, the odor is contained and each of the containers is preserved. Surprisingly, this is the first product from Keep Labs, though it is available for pre-order through their fundraising campaign. The campaign is self-run, as both Indiegogo and Kickstarter chose against promoting the product over the use of the word “cannabis.”

CES has consistently had a ban against cannabis and e-cigarettes, and they’ve banned companies like Pax, Puffco, and Juul from exhibiting in the past, though Keep Labs seems to have been included for creating a storage product. Still, as the product is specifically meant for cannabis storage, it cannot be featured.

In a statement to TechCrunch, the association remarked,

“There are no cannabis or e-cigarette products on the exhibit floor at CES, as the show does not have a category about that market. Given cannabis is not a category at CES, the company was able to exhibit under the terms they’d showcase their product as a storage device.”

Later, the group explained that the device from Keep Labs is categorized under Home Appliances.

Latest Updates: Final Word

There you have it MJ lovers, four all-over-the-cannabis-map headlines that help capture the essence of how the cannabis industry is looking to start the 2020 calendar year. The growth of CBD in the beauty and cosmetic skincare market appears to be inevitable, while the marketing of alleged health benefits causes a legal stir and a major grocer is boosting its CBD collection to fit the growing demand of cannabis oil-infused supplements. Then, a cherry on top story showing how cannabis is still hush-hush despite its massive momentum into mainstream media and use on the 2020 CES show floor.

Be sure to stay in the loop as we have more trending stories ready to hit the Internet air waves later today and this week!