Ban on CBD-cosmetics trade in China looks likely

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In a move that would shut down the Chinese market for cosmetics containing cannabis, the government is expected to enact a law that would block all imports and cross border e-commerce, leaving no loopholes for CBD-infused beauty products.

The National Institutes for Food and Drug Control announced the proposed law at the end of March. Signals since that time indicate that a ban could very well be afoot.

The proposed law would ban hemp flowers, seed oil and extracts in cosmetics — the only CBD application that can be legally sold to Chinese consumers.

‘Grinding halt’ ahead?

“Cannabis cosmetics are undoubtedly one of the hottest products in China. Once the ban takes effect, it will have tremendous impact on the industry,” Hedy He, an analyst at Hangzhou-based consultancy Chemlinked told Cosmetics Design-Asia. “The rising prosperity in the cannabis cosmetic sector will come to a grinding halt.”

Analysts say the proposed ban on cannabis in domestic cosmetics is rooted in revived “anti-drug” education initiatives which view the popularization of beauty products based on cannabis as clashing with government policies aimed at Chinese youth.

Authorities also worry that dependable THC tests to assure products are under the national limit of 0.3% are not widely available, and say that CBD can easily be replaced by other cosmetic ingredients already well-known to consumers, as justification for the new law.

Limited to exports

As a growing number of Chinese health and bio-technology companies stake out positions in CBD and other cannabinoids, promoting hemp’s fit in traditional Chinese medicine and other natural healing applications, many have also projected significant business in the cosmetics sector.

If the domestic ban comes, those companies can be expected to quickly become aggressive in pursuing export markets, where Chinese companies have already proven their mettle – by some estimates supplying nearly one third of the world’s CBD.

More than 60 companies are involved in CBD production in Yunnan and Heilongjiang provinces, the only regions of China where hemp can be grown and processed legally. At least twelve enterprises are currently authorized for extraction and processing in Yunnan, which has rapidly grown into a major CBD supplier to world markets of such end products as cosmetics, e-cigarettes, medicines and pet food.

Public comments on the proposed ban on cosmetics containing cannabis are being taken until April 19.

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