September 10, 2019, the U.S. Federal Trade Commission (“FTC”) issued a news release announcing the recent distribution of warning letters to three companies advertising cannabidiol (“CBD”) products as a medical treatment option for a range of various illnesses. Cautioning that such unsubstantiated claims may violate the Federal Trade Commission Act (“FTC Act”), the agency warns that the continuation of these assertions may result in formal legal action and a possible court-mandated refund to consumers.
Without providing the names of the three companies in receipt of the letters, the FTC points to the lack of scientific evidence on CBD products and notes the illegitimacy of claims that suggest otherwise. “The letters warn the companies, which the FTC is not identifying publicly, that it is illegal to advertise that a product can prevent, treat, or cure human disease without competent and reliable scientific evidence to support such claims.” Citing the businesses’ websites, the FTC directly highlights numerous, unfounded medical assertions that CBD products may be used to treat Alzheimer’s disease, multiple sclerosis (MS), fibromyalgia, cancer, asthma, and/or a range of mental illnesses, among other ailments.
The FTC announcement reiterates the existing federal concern on false health claims used to promote the sale and use of products that contain CBD. In April of this year, the U.S. Food and Drug Administration (“FDA”) sent warning letters to three companies – Advanced Spine and Pain LLC (d/b/a Relievus), Nutra Pure LLC and PotNetwork Holdings Inc. – for similar misconduct in collaboration with the FTC. In a statement written by then FDA Commissioner Scott Gottlieb, Gottlieb provided multiple examples of claims utilized to advertise CBD products, and clearly expressed the risk to consumer safety, “I believe these are egregious, over-the-line claims and we won’t tolerate this kind of deceptive marketing to vulnerable patients.”
Similarly, the FDA sent a warning letter in July to the largest CBD company in the U.S., Curaleaf, Inc., regarding several unapproved CBD products and for using claims that suggest a particular medical use.
According to the FTC’s release, the aforementioned companies have been urged to review and correct any claims regarding the use of their products that are not currently supported by “competent and reliable scientific evidence.” Allowing a fifteen-day response window, the companies are required to notify the FTC of the steps taken to correct the agency’s concerns. It should be noted that when it comes to ingestible CBD, the only FDA approved product is Epidiolex.
The FTC’s enforcement and intention to hold companies to the letter of the law is currently unknown. Whether the agency will consider any advertisement for ingestible CBD products illegal, or if it will establish some sort of détente with the industry – allowing more traditional “dietary supplement type” claims and only punish cannabinoid companies that make health or medical claims – remains to be seen. Either way, increasing federal pressure without clear guidelines on CBD appears to be inching the industry closer towards regulatory clash.