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Not So Fast…The FTC Issues Warning Letters to CBD Companies

On September 10, 2019, the Federal Trade Commission (FTC), whose mission is “[p]rotecting consumers and competition by preventing anticompetitive, deceptive, and unfair business practices,” issued warning letters to three companies that sell products containing cannabidiol (CBD).  The letters allege that the companies have made unsubstantiated health claims, including claims that the products have been proven to treat anorexia, fibromyalgia and Alzheimer’s disease. According to the FTC, such claims are illegal if made without competent and reliable scientific evidence.

These warning letters follow other warning letters issued jointly by the FTC and the Food and Drug Administration (FDA) earlier this year. In July 2019, the FDA  also sent a separate warning letter to CuraLeaf Inc., asserting that the company was “illegally selling unapproved products containing cannabidiol (CBD) online with unsubstantiated claims that the products treat cancer, Alzheimer’s disease, opioid withdrawal, pain and pet anxiety, among other conditions or diseases.”

The three companies that received the most recent FTC warnings letters are not identified. According to the FTC’s press release, the companies are urged “to review all claims made for their products, including consumer testimonials, to ensure they are supported by competent and reliable scientific evidence. The letters also warn that selling CBD products without such substantiation could violate the FTC Act and may result in legal action that could result in an injunction and an order to return money to consumers. The letters instruct the companies to notify the FTC within 15 days of the specific actions they have taken to address the agency’s concerns.”

Since industrial hemp was removed from the federal Controlled Substances Act via the 2018 Farm Bill, a number of companies have been selling products containing hemp-derived CBD. These products currently exist in a regulatory limbo, insofar as the FDA has stated, “At present, any CBD food or purported dietary supplement products in interstate commerce is in violation of the [Food Drug and Cosmetic Act (FD&C Act)].” This prohibition extends to cosmetics. However, while it evaluates appropriate regulatory approaches for CBD-containing products, the FDA has refrained from any enforcement activity unless companies cross the line into making unlawful health claims.

The FTC also has regulatory authority in this area, given its own statutory mandate. The agency has posted information for both companies and consumers to assist in evaluating CBD-related claims.

 

Grimaldi Law Offices has been advising clients for over 20 years on chemical and product regulation. For knowledgeable advice and in-depth analysis on your chemical regulatory compliance obligations, contact Grimaldi Law Offices at (415) 463-5186 or email us at [email protected].

 

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Ms. Grimaldi maintains a diverse environmental law practice focusing on chemical and product regulation and litigation defense. Her practice areas include Proposition 65, California's Safer Consumer Products Regulations, California's Rigid Plastic Packaging Container Act and the federal Toxic Substances Control Act. Ms. Grimaldi graduated from the University of California Hastings College of the Law magna cum laude and holds a Bachelor of Science Degree in Bacteriology from University of California, Davis. Prior to attending law school, she worked as a research assistant in laboratories at the University of California, San Francisco Cancer Research Institute and at the University of California, San Francisco School of Medicine.