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New FTC Warning Letters Issued to Companies Selling CBD Products

posted by Jennifer Diaz September 24, 2019 0 comments

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The United States Federal Trade Commission (FTC) issued a press release confirming is sent three warning letters to companies that sell oils, tinctures, capsules, “gummies,” and creams containing cannabidiol (CBD), a chemical compound derived from the cannabis plant. While the warning letters are not made publicly available, the FTC advised the warning letters were sent because the companies were advertising their CBD products could treat or cure serious diseases and health conditions, in violation of both the FTC Act (as well as U.S. Food and Drug Administration (FDA)) laws and regulations.

FTC’s mission is to “Protect consumers and competition by preventing anticompetitive, deceptive, and unfair business practices through law enforcement, advocacy, and education without unduly burdening legitimate business activity.” As part of its regular monitoring of health-related advertising claims, the FTC issued the three warning letters for advertisements of CBD products claiming to treat or cure serious diseases and health conditions. The letters 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.

One of the CBD advertisements described the product with claims such as, “work like magic … to relieve even the most agonizing pain” better than prescription opioid painkillers; To bolster its claims that CBD has been “clinically proven” to treat cancer, Alzheimer’s disease, multiple sclerosis (MS), fibromyalgia, cigarette addiction, and colitis, the company states it has participated in “thousands of hours of research” with Harvard researchers.

Another company’s website claims that CBD products are proven to treat autism, anorexia, bipolar disorder, post-traumatic stress disorder, schizophrenia, anxiety, depression, Alzheimer’s disease, Lou Gehrig’s Disease (ALS), stroke, Parkinson’s disease, epilepsy, traumatic brain injuries, diabetes, Crohn’s disease, psoriasis, MS, fibromyalgia, cancer, and AIDS. The company also advertises CBD as a “miracle pain remedy” for both acute and chronic pain, including pain from cancer treatment and arthritis.

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The third company’s website promotes CBD gummies as highly effective at treating “the root cause of most major degenerative diseases, including arthritis, heart disease, fibromyalgia, cancer, asthma, and a wide spectrum of autoimmune disorders.” The company also claims its CBD cream relieves arthritis pain and that its CBD oil may effectively treat depression, PTSD, epilepsy, heart disease, arthritis, fibromyalgia, and asthma.

FTC has instructed the companies to respond to FTC’s concerns within fifteen (15) days of the date of the letter confirming the claims are backed by scientific research. FTC alleges that CBD companies making drug claims on their products are subject to potential violations of Sections 5(a) and 12 of the FTC Act, codified at 15 U.S.C. 45(a) and 52, which typically carry a civil penalty of not more than $10,000 for each violation.

The FTC in conjunction with the United States Food and Drug Administration (FDA) issued three similar letters earlier this year to three other CBD companies for alleged violation of FDA regulation and FTC regulations. It is important to note, both FDA and FTC regulate not only the product, but, also all ancillary advertisements, including websites

Under FDA’s Food Drug and Cosmetic Act, products are drugs under section 201(g)(1) of the FD&C Act, 21 U.S.C. 321(g)(1), because they are intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease and/or intended to affect the structure or any function of the body. In the case of the CBD companies at issue, blatant claims to treat a disease are “drug” claims. When there is not a current over the counter drug monograph (or rulemaking process) for CBD (which there is not), then the products are considered “unapproved new drugs” sold in violation of sections 505(a) and 301(d) of the Federal Food, Drug, and Cosmetic Act (the FD&C Act)).

The federal agencies seek to prevent unproven medical claims regarding CBD from flooding commercial markets. Diaz Trade Law has helped countless small, medium, and big businesses with FTC and FDA compliance. Contact our office at info@diaztradelaw.com to discuss how to ensure your CBD products remain on the shelves and not subject to an FTC and/or FDA warning letter.

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