Do you need a license to sell essential oils? Cosmetics & NHP

When it comes to topical essential oils, determining the correct regulatory pathway to ensure full compliance typically depends on how you wish to market the product. Do you intend your essential oil to be diluted and worn as a blissfully scented fragrance oil, or do you intend for the product to be used to help relax the consumer and offer some relief for that headache he or she has had all day? If you chose the former, then you can market your product under the Canadian cosmetic framework. If you choose the latter, then your product must be regulated as a Natural Health Product (NHP) in Canada.

The main difference between the manner in which cosmetics and topical NHPs are regulated often comes down to marketing. NHPs are required to carry a health claim on their labels whereas cosmetics are not permitted to make health claims. In the example above, the fragrance oil is considered a cosmetic, while the oil used for relaxation and headache relief is an NHP. It is important to note, that these 2 products (i.e. the cosmetic and the NHP) can be identified in the formulation and yet regulated via 2 different regulatory pathways in Canada. It typically comes down to the intended use of the product.

What is an Essential Oil?

Essential oils are natural products made from plants. They contain volatile compounds called terpenes, which give them their scent. These oils are used as aromatherapy treatments because they help with relaxation, stress relief, and pain management.

Why Should I Care About Licensing?

If you sell essential oils, you should care about licensing. This is because selling these oils requires a license from the state where you live. In some states, you must also register with the state before you can sell essential oils.

The Different Types of Licenses Available

There are two main types of licenses available for essential oil sellers: wholesale and retail. Wholesale licenses allow you to buy essential oils at wholesale prices and then resell them to customers. Retail licenses allow you to sell essential oils directly to consumers.

Which Type Is Right For Me?

If you’re just starting out as an essential oil seller, we recommend getting a wholesale license. This will give you access to more products than you would with a retail license, and you won’t have to worry about taxes until you start selling. However, if you plan to make a living selling essential oils, you should consider getting a retail license instead. It’s much easier to set up a business with a retail license, so you’ll save money by not having to pay sales tax upfront.

Health Canada (NNHPD) Cosmetic Notification submission

Health Canada defines aromatherapy as “a branch of botanical medicine which uses essential oils and other volatile/aromatic plant extracts for therapeutic or medicinal effect”. If you are looking to market your essential oils for their therapeutic purposes, the Natural and Non-Prescription Health Products Directorate (NNHPD) has published an aromatherapy monograph outlining the specific therapeutic indications of various commonly used essential oils. While this is an excellent resource, applicants are always permitted to submit their own evidence to support indications or oils which may not be present in the monograph.

If the therapeutic properties of the oil are not important to your marketing strategy, you may wish to consider marketing the essential oil as a cosmetic. Going the cosmetic route avoids some regulatory hurdles, such as product licensing and site licensing. To achieve compliance for a cosmetic, you require a compliant label and submission of a cosmetic notification to Health Canada within 10 days after the product is introduced into the Canadian market.

But wait! Isn’t there a third option for essential oils? If you are looking to sell your essential oils for use with a diffuser, then your product would be classified as either a consumer product or an NHP, depending on whether you wish to market the product for its health benefits. If the product is meant to be used only to add a pleasant aroma to any room, the product would be considered a consumer product. As discussed above, if the oil is intended to be diffused for use in aromatherapy, it would require licensing as an NHP prior to market access.

If you are interested in marketing essential oils in Canada, Quality Smart Solutions has a team of specialists who can assist you in determining the correct regulatory pathway for compliant market access.  Contact us today to discuss how we can be your solution!

Quality Smart Solutions is an end-to-end compliance solutions expert which has been assisting clients for 10 years in the areas of Dietary Supplements/NHPs, Foods, Cosmetics, Medical Devices, OTC drugs and canna. Ask us for details or visit our website at www.qualitysmartsolutions.com.