On December 17, the FTC issued a press release announcing its first law enforcement crackdown on deceptive claims in the growing market for cannabidiol (CBD) products. According to the press release, a number of “companies made unsupported claims that their oils, balms, gummies, coffee, and other goods could treat serious diseases such as cancer and diabetes.” We’ve written extensively about the FDA’s role in preventing CBD companies from making health claims about their products, and covered the overlap between the FDA and FTC’s enforcement roles here.
The federal Food, Drug & Cosmetic Act (“FDCA”) provides the FDA with regulatory authority over product labeling and seeks to ensure that consumer products (foods, dietary supplements, cosmetics, tobacco products and drugs) are not misbranded, meaning that the labels do not contain false and misleading statements. The role of the FTC under the Federal Trade Commission Act (“FTC Act”), however, is to regulate “advertising” to protect the public from unfair and deceptive claims.
The overlap is apparent, but the distinction between packaging/labeling and advertising is not always clear. Some courts have expanded the authority of both the FDA and FTC by interpreting “labeling” to include products sold on the Internet, especially where the products are purchased directly from a website. This has led the two agencies to increased collaboration in regulating the advertising of food and dietary supplement products and has blurred the line between where each agency’s authority ends and the other’s begins.
In this particular enforcement instance, the FTC announced it is taking action against six sellers of CBD-containing products for allegedly making a number of scientifically unsupported claims about their ability to treat serious health conditions, including cancer, heart disease, hypertension, Alzheimer’s disease, and others. In addition to requiring each of the companies to immediately cease making these unsupported health claims, the companies will be required to pay monetary judgments to the agency. The orders settling the FTC’s complaints “bar the respondents from similar deceptive advertising in the future, and require that they have scientific evidence to support any health claims they make for CBD and other products.”
According to Andrew Smith, Director of the FTC’s Bureau of Consumer Protection:
The six settlements announced today send a clear message to the burgeoning CBD industry: Don’t make spurious health claims that are unsupported by medical science. Otherwise, don’t be surprised if you hear from the FTC. In particular, this crackdown against CBD companies is attempting to protect consumers from false, deceptive, and misleading health claims made in advertisements on websites and via social media.
The six offenders in this crackdown are as follows:
We expect enforcement of this nature from both the FTC and FDA to be a major theme in the coming year, and urge all companies selling these types of products to consult with an attorney to ensure that your advertising and labeling comply with all applicable laws.
If you have questions about what you can or cannot say with respect to a cannabis product, whether on a label, on social media or on any other platform, or if you have questions about how, where or to whom these products can be bought or sold, contact our team of regulatory and hemp CBD attorneys.
FTC Cracking Down and Issuing Fines for Deceptive Claims by CBD Companies on Harris Bricken.