On May 28, National Medical Products Administration (NMPA) released and implemented the finalized Inventory of Prohibited Ingredients for Cosmetics and Inventory of Prohibited Plant (Animal) Ingredients for Cosmetics. Four CBD-related ingredients, including Cannabidiol, CANNABIS SATIVA FRUIT, CANNABIS SATIVA SEED OIL, and CANNABIS SATIVA LEAF EXTRACT, are on the lists, implying the end of CBD products in China. From May 28, 2021, cosmetic registrants and notifiers are not allowed to produce or import products containing these ingredients. As for the products containing the newly prohibited ingredients that have been produced or imported, the NMPA will issue transitional measures granting a deadline for their sales.
Latest Market Dynamics
What is the market response to this latest regulatory change?
When searching keywords such as cannabidiol and CBD on Taobao, Tmall, Pinduoduo, and JD.com, users can still find related skincare products containing CBD, meaning that they are accessible for consumers.
CBD products on e-commerce platforms
As for brands, Simpcare, one of the most popular domestic CBD skincare brands, released a letter to consumers on May 30. It says that Simpcare will stop producing its cannabis sativa leaf extract products since the announcement date. The last batch of products will be sold during the legal sales periods announced by the state. The CBD containing product collection involved is Simpcare’s ace products. It has gained 100,000+praises on mainstream e-commerce platforms since the launch in early 2020. At present, the brand still has 21 SKUs containing cannabis Sativa leaf extract on sale. The highest monthly sales reached 1000+ units. Besides Simpcare, many beauty brands are still selling products containing cannabidiol on e-commerce, such as Cannaclear and Glamour.
Manufacturers act more quickly to the latest regulation. COSMAX, Guangzhou Zunyi, and other cosmetic manufacturers have fully stopped the production and processing of cannabidiol-related ingredients. Regulations about cannabidiol-related ingredients are strict, and factories are not allowed to directly dispose of their inventory, so some factories are waiting for the following instructions from the government. As for export orders, factories need to further negotiate with foreign brands further.
Reasons for CBD Ban
There are several reasons for the CBD ban.
Firstly, the risks in the production process still exist. Although the Tetrahydrocannabinol (THC) content contained in industrial hemp is less than 0.3%, it is possible that purifying processing is not standardized enough. Therefore, it requires strict governnance, but it can be a heavy burden on the government.
Secondly, the claimed efficacy of cosmetics containing CBD is not irreplaceable. For example, one of the most essential efficacies of CBD, the alleviation of inflammation, can be replaced by olive leaf extract.
Finally, there are cultural considerations. As a country with the strongest and most stringent anti-drug efforts, China has zero tolerance towards drugs. Though CBD (工业大麻) used in cosmetics is not additive, its name is still related to the heap (大麻). The governments are afraid that the public will decrease their wariness against drugs (THC) if CBD products are widely accepted.
Suggestions for International Stakeholders
1. General Trade-imported Cannabis Cosmetics
As of May 28, 2021, cosmetic companies shall stop manufacturing and importing products with prohibited CBD and three Cannabis Sativa-derived ingredients.
For companies that have not yet entered China’s CBD cosmetic industry, measures need to be taken to adjust the product formula. The possible substitutes for CBD ingredient’s anti-inflammatory efficacy could be bisabolol and dipotassium glycyrrhizinate. The possible substitutes for CBD ingredient’s antioxidant efficacy could be ceramide and Vitamin C.
For cosmetics containing those prohibited ingredients that have been notified, produced, and imported before May 28, 2021, China NMPA will later issue a public notice to clarify whether such cannabis cosmetics can continue to be sold and how long the buffer period will be. Cosmetic registrants and notifiers shall pay attention to the further updates of the CBD ban, stipulate response measures to the possible sales return, consumer complaints, etc. brought by the policy adjustments in advance, and properly dispose of CBD cosmetics.
2. CBEC-imported Cannabis Cosmetics
Under the current regulatory scheme of Tmall Global, China’s top cross-border e-commerce (CBEC) platform, imported CBD cosmetics can be sold on its platform but the information “the product contains CBD (cannabidiol)” must be clearly indicated at the time of the release and a THC testing report with the THC content less than 0.3% must be submitted.
However, the recent regulatory trend shows that Tmall Global and other mainstream CBEC platforms are raising their compliance standards and all banned the sales of cosmetics containing prohibited ingredients stipulated in the Safety and Technical Standards for Cosmetics (STSC) on their platform. Thus, companies entering China via this channel are also advised to pay close attention to the update of the platform’s prohibited ingredient rules, which may also change in step with the adjustment of STSC’s prohibited ingredient requirements.