DSM enters “new era” in CBD market with Mile High Labs partnership
16 Jun 2021 --- Royal DSM has entered into a commercial partnership with US-based cannabinoid ingredients manufacturer Mile High Labs (MHL) to develop “unique hemp-derived cannabinoid solutions.” DSM says the partnership signals the start of what will be a major industry breakthrough for R&D in the burgeoning global CBD market.
DSM will utilize MHL’s 400,000 sq ft manufacturing site in Colorado, US, to combine cannabidiol (CBD) and hemp derivatives with micronutrients.
The partnership says that DSM’s advanced experience in scientific research will create a platform from which nutrition industry players can quickly bring the resulting premix solutions into the dietary supplement and F&B segments.
“We are taking our first steps into the cannabinoid space as an end-to-end provider of market-ready and premix solutions through this strategic partnership,” a DSM spokesperson tells NutritionInsight.
“The CBD premix and market-ready solutions will be available in a range of formats starting with gummies, beverages and beyond. CBD products featuring DSM’s micronutrients will support a range of trending health concerns such as sleep, immunity, stress and mood.”
“DSM’s longer-term ambitions will leverage our clinical, regulatory and applications expertise to explore the health benefit potential of minor cannabinoids and partner closely with customers to develop the next generations of science-backed cannabinoid solutions.”
The “missing piece” for industry
Speaking to NutritionInsight, MHL’s CEO Jonathan Hilley says the agreement marks a breakthrough moment for the CBD industry.
“For the first time, our customers will be able to leverage decades of scientific evidence from DSM to communicate specifically what their product does. By partnering with MHL, customers can now make structure-function claims based on the secondary ingredients provided by DSM. This is the missing piece for many CBD brands today, and it’s a value that the DSM-MHL partnership uniquely delivers.”
DSM will mix unique CBD solutions for the dietary supplement and F&B markets.Frederic Boned, vice president of human nutrition and health at DSM North America, says the partnership “is just the beginning for DSM. Our partnership with MHL will be a key enabler for us as we take our first steps in this burgeoning market.”
The financial terms of the agreement have not been disclosed.
Taking CBD mainstream
MHL previously formed partnerships with other major players, including OceanSpray, Nisa, Herbalife Nutrition and Nature’s Way.
Hilley says the announcement of the partnership is already stirring increased interest in the CBD market from key supplement and F&B producers.
“This partnership means that big companies are starting to get excited about this market, and brands that work with MHL will be uniquely positioned to create the novel consumer products that will define this new era,” he asserts.
Boned asserts that despite rapidly evolving consumer interest in CBD products and their potential health benefits, the market has not yet reached a recognized standard in scientific research or product quality.
“DSM has the core competencies, combined with a deep understanding of consumer and customer needs, to help brands enter the cannabinoid market early and build a leading position. Our solutions will deliver the purity, reliability and traceability that are currently lacking and enable our customers to differentiate themselves,” he comments.
Innova Market Insights reports that 71 percent of US consumers are open to accepting CBD as an ingredient.
Improving standards
Boned says that DSM chose MHL as its partner due to the company’s staunch commitment to sustainability, quality and regulatory compliance, as well as its extensive cannabinoid manufacturing capabilities. Moreover, he says the duo are jointly committed to developing the improved standards that the cannabinoid industry “sorely needs.”
Boned moreover says that industry has not yet realized the technological and product potential in the CBD and hemp-derived product space – the main reason behind DSM’s decision to invest in the category’s future.
Lucrative market, regulatory confusion
Recent years have seen the burgeoning CBD market face myriad legislative issues and hurdles throughout different global regions.
The Association for the Cannabinoid Industry (ACI) and Centre for Medicinal Cannabis (CMC) predict the CBD industry will generate £690 million (US$959 million) in annual sales over 2021.
This figure surpasses predictions made in the seminal market sizing study undertaken by the CMC in 2019, which estimated the market would be worth £526 million (US$731 million) in 2021. According to ACI, the UK is now the second-largest CBD consumer after the US, spending more on the ingredient than on vitamin B and C combined.
However, despite the segment’s evident profitability, disparities in global legislation continue to slow development in many regions. Last year, the European Commision (EC) froze all applications of hemp extracts and natural cannabinoids under Novel Food regulation, considering them to be drugs.
Despite this “crushing blow” to the European market, the UK’s Food Standards Agency permitted the EIHA Novel Food Consortium to continue selling CBD in the UK market.
By Louis Gore-Langton
