The sale of Cannabidiol (“CBD”) products are growing significantly throughout the country and internationally, but there is often confusion about how to lawfully market CBD products in the United States. Increasing the risk, the Federal Trade Commission (“FTC”) and Food and Drug Administration (“FDA”) have been targeting CBD companies for the claims made in advertising and in labeling.
Further confusing many advertisers is the 2018 Farm Bill. While some think this law legalized the sale of all types of CBD products, that is not the case. In fact, while the Farm Bill exempts hemp-derived products from Schedule I under the Controlled Substances Act, it does not legalize marijuana derived CBD, or CBD otherwise containing more than .3% of THC. Despite the exemptions of the 2018 Farm Bill, the FDA has taken the position that CBD is not a dietary supplement and needs to be regulated like a drug, whether for use by humans or animals, and that the FDA has stated that it may initiate enforcement actions if CBD products are coupled with therapeutic claims.
While risks of enforcement actions by the FTC are more substantial, the FTC’s enforcement powers are limited to the issue of whether false misrepresentations about CBD products are made to consumers. To this end, the FTC has taken the position that it is illegal to advertise that a CBD product can prevent, treat, or cure human disease without competent and reliable scientific evidence to support such claims. Accordingly, selling CBD products without the requisite substantiation could violate the FTC Act and other laws. The FTC can pursue a number of remedies, including obtaining immediate injunctive relief and an asset freeze, filing a federal lawsuit, commencing an administrative action, serving a civil investigative demand (“CID”), or issuing a warning letter.
Before marketing CBD products to consumers, companies and individuals should seek experienced legal counsel to review marketing practices to ensure compliance with federal and state laws. Kronenberger Rosenfeld has experience reviewing CBD products and CBD product advertising for legal compliance, and we would be happy to bring that experience to bear for your business.