Is it safe? Even though Crayola does not publish a detailed and specific ingredient list, they do formulate their crayons so that toddlers can eat a whole box of the stuff without suffering anything more serious than a stomach ache. Crayons consist mainly of paraffin wax and non-toxic pigments. Wax is a major component in any lipstick or chapstick, and crayons' pre-mixed pigments will give you more choices, at less cost than either food coloring (I've tried that too) or the powders and gels cosmetic suppliers will sell you.
This recipe works surprisingly well. The colors last longer, and stick to your lips better than regular commercial lipstick. No need to worry about evidence left on shirt collars, or on cigarette butts carelessly left in ashtrays... although sometimes, depending on the specific crayon color, the pigments might need a little extra smacking of the lips to disperse evenly.
If you're using a chapstick tube (or a lipstick tube of a similar size) and you're making this as a gift, you can download a pop-up, pop art lip balm holder I designed. The template comes in two versions, one with text and the other with an empty speech bubble in case you want to add your own.
Step 1: Containers and molds
If you really want the real lipstick shape, you can buy molds at various suppliers. Most of these vendors cater to people who are making cosmetics for sale and not for personal use, so they sell trays with fifty or so molds, but Making Cosmetics sells a three stick mold. I decided I could do without the pretty shape, and stick with something easy and cheap. A good source for chapstick and other containers is called Specialty Bottle. They do not sell lipstick molds but they have a nice selection of tins, jars, and bottles, and no minimum quantity. Many other vendors sell similar items, and I'm not endorsing (or affiliated with) anybody.