FTC Continues Crackdown on CBD Marketing Practices

September 16, 2019

On Sept. 10, 2019, the Federal Trade Commission (FTC) issued warning letters to three undisclosed companies regarding their marketing claims on cannabidiol (CBD) products. The FTC claimed that each company made various unsubstantiated health-related claims in advertisements that their CBD oils, tinctures, capsules, gummies and cream products could treat or cure serious health conditions. The letters warned the companies that it is impermissible under the Federal Trade Commission Act to advertise that a CBD product will prevent, treat or cure human disease without substantial scientific evidence.

This most recent round of letters reflects the FTC’s continued focus on marketing of products containing CBD and reaffirms the importance of making substantiated claims in an evolving regulated environment.

Unsubstantiated Claims

According to the official release, one company claimed that CBD “‘works like magic’ to relieve ‘even the most agonizing pain’ better than prescription opioid painkillers” and touted “‘thousands of hours’ of research with Harvard researchers” to clinically establish CBD as a treatment for “cancer, Alzheimer’s disease, multiple sclerosis, fibromyalgia, cigarette addiction, and colitis.” Another company claimed that CBD products were a “miracle pain remedy” that treated a range of ailments in addition to those mentioned above, including post-traumatic stress disorder, anorexia, bipolar disorder, schizophrenia, Lou Gehrig’s Disease (amyotrophic lateral sclerosis or ALS), stroke, Parkinson’s disease, epilepsy, traumatic brain injuries, diabetes, Crohn’s disease, psoriasis and AIDS. Finally, the third company’s website touted its CBD products as “highly effective at treating ‘the root cause of most major degenerative diseases’” and added a few more serious health conditions to the list.

Increased Enforcement Environment

The FTC issued similar warning letters on March 28, in a coordinated effort with the U.S. Food and Drug Administration (FDA), to three other companies related to similarly unsubstantiated claims regarding the health benefits of CBD. Pursuant to Sections 5(a) and 12 of the FTC Act (15 U.S.C. §§ 45(a) and 52), the FTC generally regulates such advertising claims, which must be substantiated by reliable scientific evidence and true at the time they are made. Exaggerated or unsubstantiated claims, such as the claims referenced in the March letters and the September release above, may violate the FTC Act.

In accordance with its regulatory authority, FDA — pursuant to Section 201(g)(1)(B) of the Federal Food, Drug, and Cosmetic Act (FDCA), 21 U.S.C. § 321(g)(1)(B) — has taken the position that such CBD disease claims related to the treatment and cure of the laundry list of human diseases delineated in the March letters and above constitutes evidence that such CBD products are intended for use as drugs. FDA heavily regulates prescription drugs and prohibits introducing into the market products that do not meet the extensive testing and approval processes to establish that drugs are generally safe and effective and meet the requirements surrounding the marketing of drugs in a manner for which the purpose of the drug is intended. Making a disease claim on any product that is not an approved drug is a potential violation of the FDCA and evidence of marketing an unapproved drug.

Companies that are actively marketing or distributing CBD products, or considering doing so, should take note of the approach taken by the FTC and FDA and their overlapping regulatory authority as it relates to marketing claims surrounding products. Each company should review all claims made by the company (including consumer testimonials posted on company websites and social media) for their CBD products to ensure that they are backed by reliable scientific evidence. Companies should also pay particular attention to disease claim advertisements to ensure that CBD products do not make claims that might be construed as implicating CBD for use as a drug under the FDCA.