A Canadian CBD firm is pulling out of China, the latest sign the giant market is being closed to the industry.
The country of 1.4 billion people had a growing cosmetic CBD market which was able to flourish thanks to a 2015 decision to allow the compound to be used in consumer applications.
While ingestible CBD products have never been formally permitted, four different cannabis extracts were approved for us on the ‘inventory of existing cosmetic ingredients‘.
In March, the Beijing-based regulator signalled it would move to reverse this decision, a bitter blow to the booming business.
It was confirmed on May 28 when all previously allowed cannabis extracts were added to the ‘list of prohibited use cosmetic ingredients‘.
The result is the retreat of international firms who had been hoping to crack the potentially lucrative market,
Yooma Wellness Inc, a Toronto-based CBD firm announced on Thursday it would be ceasing operations in China with immediate effect.
It said online marketplaces in China have already taking steps to restrict the sale of CBD products by imposing online controls.
Lorne Abony, chairman of Yooma, said: “The government’s decision to ban the use of CBD and other cannabinoids in cosmetics eliminates the progress made by Yooma in selling CBD skincare and beauty products to Chinese consumers.
“However, we do not anticipate this change will lead to any revenue shortfall for Yooma this year, as the company is experiencing significant growth in other markets which has exceeded our expectations, and we expect any longer-term impact on Yooma’s business to be minimal as we focus more of our attention on these other promising markets.”