Ulta Beauty Expands Its CBD Assortment With Sagely Naturals

Sagely Naturals is solidifying its position as a top indie player in the CBD segment with a launch at 500 Ulta Beauty stores.

The beauty specialty chain joins a diverse distribution network for the brand that includes Neiman Marcus and CVS, and comes as it’s experiencing rapid growth as large retailers increasingly embrace CBD products. Sagely Naturals’ sales are projected to skyrocket as much as 900% this year. The brand is a CBD bestseller at CVS, where it’s rolled out to 1,500 stores and commands 29% market share in its category.

“If you had asked me three years ago if Ulta and Sephora would be early entrants into the CBD market, I would have probably said no because, at the time, I considered them to be beauty retailers, but I feel like health and wellness, and this concept of beauty from within has really changed retail over the last few years,” says Kerrigan Behrens, co-founder and CMO of Sagely Naturals. “Everyone is looking for self-care in whatever way that means to them, and retailers like Ulta have quickly adapted to that idea.”

Behrens’ health—specifically the health of her lower back—led her CBD. After visiting 14 doctors for back pain, a friend suggested she try CBD, a remedy that worked better for her than Advil or Vicodin. Simultaneously, Sagely Naturals co-founder and COO Kaley Nichol was eliminating personal care and over-the-counter medication with suspect synthetic ingredients from her bathroom, and turning to natural solutions for skincare and routine ailments. While Nichol and Behrens, who share professional backgrounds in the finance and food industries, originally considered creating a food brand together, their mutual interest in alternatives to conventional wellness offerings redirected them to CBD.

Sagely Naturals was established in 2015 and its debut product, Relief & Recovery Cream, a perennial strong performer that pairs CBD with menthol, and argan, marula and peppermint oils to combat bodily aches, was released in 2016. The brand was developed to attract a broader audience for cannabis products than its predecessors with superior design, baby boomer women as a primary customer target, understandable topical formats, and strict product protocols epitomized by the triple lab assessments it does to verify the amounts of CBD in its formulas and that they don’t contain THC. Sagely Naturals has stayed away from tinctures, common CBD delivery mechanisms that are unfamiliar to many consumers and often don’t taste good.

“We make people feel comfortable using cannabis products by making the brand look approachable and ensuring our quality standards are the highest in the industry.”

“We make people feel comfortable using cannabis products by making the brand look approachable and ensuring our quality standards are the highest in the industry, and all of our ingredients are natural,” says Behrens. She notes that 80% of Sagely Naturals’ customers don’t use other cannabis products and that its customer base has spread beyond its initial target. Behrens says, “We were targeting baby boomers specifically because the Relief & Recovery line was meant to address their needs, but we figured out a lot of millennials were following our brand that didn’t need products from the Relief & Recovery line. They were asking for products that would help them relax and that’s when we came out with the Tranquility line.”

Today, Sagely Naturals’ assortment spans 13 products priced from $19.99 to $74.99 across its Tranquility, Relief & Recovery, Extra Strength and Drift & Dream collections. In addition to Relief & Recovery Cream, Tranquility Cream and Tranquility Roll-On are robust sellers. Sagely Naturals has ventured into ingestibles with capsules in its Tranquility, Relief & Recovery and Extra Strength collections, but topical products are sales drivers at stores. In the fall, Sagely Naturals will unveil a premium line with unique products and loftier prices for prestige retailers.

At the outset, the brand concentrated on distribution in natural food stores and dispensaries. It didn’t take long for Sagely Naturals to cut off its dispensary business because Behrens discovered dispensaries to be full of products with towering THC levels and low quality standards, not the sort of competitive set she had in mind for the brand. Sagely Naturals has maintained a presence at natural food stores the likes of Erewhon, Lassens and Sprouts.

Once the Farm Bill passed late last year, major beauty, drugstore and department store retailers rushed into the CBD sector and courted Sagely Naturals. In January, Neiman Marcus announced its CBD lineup with Sagely Naturals, Cannuka, Cannabliss Organic, Code of Harmony, Ildi Pekar, Vertly and Yuyo Botanics, and Ulta and CVS picked up on the CBD craze in March. Ulta’s current CBD selection features the brands Cannuka, Naturally G4U, Hustle Butter and Revolution Skincare as well as Sagely Naturals. In total, Sagely Naturals is available in upwards of 5,000 retail doors.

“It’s a huge deal that these retailers are selling CBD, and it’s very exciting, but they are only testing it in a percentage of their stores.”

Behrens foresees Sagely Naturals deepening relationships with existing retail partners. “Not a single one of these retailers has expanded CBD to all doors. We are getting amazing reads from these tests so far and, as there becomes more clarity around state laws with regard to CBD, our footprint is going to build. It’s a huge deal that these retailers are selling CBD, and it’s very exciting, but they are only testing it in a percentage of their stores,” she says. “What I really look forward to is when we can start to more directly engage with the customers through in-store activations or more traditional marketing.”

As retailers extend their CBD reach, Sagely Naturals is prepared to meet their merchandise demands. It’s profitable, has secured capital and its on-hand inventory rose 800% year-over-year. Sagely Naturals has gone through two rounds of funding, the first involving angel investors and the second involving a backer Behrens describes as a “well-known Silicon Valley investor.” She declined to disclose the names of the brand’s investors and its annual revenues. IRI data shows Sagely Naturals is the biggest female-founded CBD brand on the market.

“I like to call CBD ‘business unusual.’ It’s not like any category that’s ever been sold before. Typically, you have a trending ingredient and every large brand in America adds it to their products, but because CBD has regulatory hurdles, most entrenched CPG companies—the Revlons and L’Oréals of the world—can’t add CBD to their products because I don’t think their legal teams are comfortable with it,” says Behrens. “That’s allowed brands like Sagely Naturals to really stake a claim in this industry, and we are now experts. We have been doing it longer than anyone else, and we have developed an expertise in product development, quality and in our brand approach in order to continue to make these products.”