'A defining moment for the industry': DSM enters CBD space with Mile High Labs partnership

By Stephen Daniells contact

- Last updated on GMT

© MysteryShot / Getty Images
© MysteryShot / Getty Images

Related tags: Cbd

Royal DSM has entered into a broad commercial partnership with Colorado-based cannabinoid company Mile High Labs (MHL) for next generation science-backed cannabinoid solutions.

The partnership extends DSM’s capabilities to create a platform from which leading consumer products companies can deliver novel, health-benefit driven products with globally trusted ingredients, said DSM in a press release. The partnership is global, a DSM spokesperson told us, but the availability of DSM’s solutions is dependent on local regulatory clearance and DSM’s focus at the moment is primarily on the US.

The relationship will also see MHL and DSM partner in the development of unique hemp-derived cannabinoid solutions, including market-ready and premix solutions (CBD and hemp derivatives with micronutrients, for example) that will enable dietary supplement, food and beverage and other nutritional product brands to “deliver science-backed innovation with speed and confidence”,​ added the press release.

The Dutch company noted that its longer-term ambitions are to leverage its clinical, regulatory and applications expertise to explore the potential benefits of minor cannabinoids. DSM will also partner closely with customers to develop the next generations of science-backed cannabinoid solutions.

“This is just the beginning for DSM,”​ said Frederic Boned, Vice President, Human Nutrition & Health at DSM North America. “Our partnership with MHL will be a key enabler for us as we take our first steps in this burgeoning market.

“The potential of CBD and other hemp-derived cannabinoids hasn’t yet been fully realized, so we’re investing in the future of the category. As regulatory frameworks are defined, DSM’s end-to-end capabilities and unrivalled portfolio make us ideally positioned to lead and shape the market. This category is full of promise, and we’re excited to partner with MHL and play an integral role in tapping into the potential and enabling customers to create products with real purpose. Watch this space!”

A defining moment for the industry

Jonathan Hilley, Chief Executive Officer at MHL, which owns 400,000 sq ft of manufacturing facilities in Colorado, called the partnership, “important milestone in the evolution of MHL and a defining moment for our industry.

“We look forward to pooling our expertise to deliver cannabinoid innovation that is scalable, sustainable, cost-effective and provides the building blocks for exciting new consumer products.”

Market

CBD and hemp have experienced stellar growth in recent years, and sales of dietary supplements with hemp-derived CBD ranked number one in the natural channel in 2019 and were number 9 in the mass channel, according to the American Botanical Council.

However, sales dropped in 2020, with the Nutrition Business Journal​ reporting that U.S. sales of hemp CBD products declined 2% to $803 million, and with CBD supplement sales fell an estimated 6% in 2020.

But that was 2020, and a recent report by Brightfield Group that forecasts that sales in 2021 will grow 15% year over year. 

“There is a strong consumer pull in the CBD space for high-quality, health-benefit driven solutions, but as yet the market is still to arrive at recognized science or quality standards,” ​added Boned. “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.

“MHL is the ideal partner due to its staunch commitment to sustainability, quality and regulatory compliance, as well as its extensive cannabinoid manufacturing capabilities. Together, we are committed to developing the standards the cannabinoid industry sorely needs. Our complementary areas of expertise will support customers along the entire product development process.”

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