Last week, the Federal Trade Commission issued a press release announcing that it had issued warning letters to three unnamed sellers of cannabidiol (CBD) products who marketed everything from gummies to creams with bold claims that the products could treat a wide variety of the most serious diseases known to man. This follows an earlier wave of letters that it issued jointly with the U.S. Food and Drug Administration (FDA) last March, which warned other CBD marketers of misbranding and introducing an unapproved new drug without prior approval, and of making unsupported claims about their CBD products’ ability to treat and cure serious diseases such as cancer and Alzheimer’s, among other medical conditions.
In the latest press release, the FTC reaffirms its interest in monitoring health-related advertising claims in the budding CBD industry. The FTC did not disclose the recipients of the warning letters, but the Commission quoted several problematic claims made by the undisclosed CBD companies. Examples of claims that the FTC appears focused on include 1) assertions that CBD products have been “clinically proven” to treat cancer, Alzheimer’s disease, or other serious medical diseases; 2) claims that CBD products are effective in relieving various types of pain; and 3) references to the amount of research companies have acquired to support these claims.
In the letters, the FTC asked that the companies review all of their claims that a CBD product can prevent, treat, or cure diseases or other medical conditions to ensure that those claims were supported by “competent and reliable scientific evidence.” The FTC demanded that the companies “notify the FTC within 15 days of the specific actions they have taken to address the agency’s concerns.”
This is the FTC’s second appearance in the CBD space, and its first solo act. Though the industry may primarily focus on FDA and Drug Enforcement Agency (DEA) regulation, the warning letters are a reminder that the quickly growing CBD industry is getting more attention from an alternative threat—the FTC. Going forward, it appears that the FTC will continue to pay closer attention to whether claims that CBD products can treat various diseases, or are otherwise “clinically proven,” are backed by competent and reliable scientific evidence. If not, CBD companies can potentially face more serious legal action related to false advertising, such as FTC enforcement actions, state attorneys general action, and consumer class actions.
Because of these risks, CBD companies should have a formal compliance plan in place to ensure their marketing plans comply with federal guidelines, which include guidelines for compiling and maintaining claim substantiation. These recent letters serve as a cautionary reminder to companies operating in the CBD space to verify the accuracy of their advertisements and other marketing material. Failure to do so could result in further FTC action for monetary and injunctive relief, as well as FDA actions to remove products from the market—and both outcomes could be real buzz kills.