FDA and FTC Fire Warning Shots At Cannabis Companies – Lexology

Last week the Federal Trade Commission (FTC) joined the Food and Drug Administration (FDA) in sending warning letters to several companies marketing products with cannabidiol (CBD), which claim to treat a variety of diseases and other ailments.

We have blogged in the past about the emerging cannabis industry and its consequences for advertisers and agencies alike (see here and here). To summarize the current legal landscape, although marijuana (i.e. cannabis with THC) is still illegal under federal law, the Farm Bill passed at the end of 2018 made some hemp-based products, such as CBD, legal under certain circumstances. The Farm Bill, however, made clear that the FDA has authority to regulate these products and, so far, the FDA has approved very few CBD products. Notwithstanding that the FDA has not given blanket approval for CBD and is still studying the health and safety effects, a trip to any local organics store will reveal numerous CBD products available for purchase, which claim to provide a whole host of health benefits.

In this case, the FDA and FTC targeted three companies, which were selling CBD products for humans and pets, which claimed to effectively treat diseases such as cancer, Alzheimers, fibromyalgia, and “neuropsychiatric disorders.” One ad also stated that “Science … shows that CBD has anti-emetic, anti-convulsive, anti-inflammatory, and analgesic properties.” The FDA took the position that the CBD products were “unapproved new drugs” (and in the case of the CBD products for dogs, “unapproved new animal drug[s]”), which were being sold in violation of the federal Food, Drug and Cosmetic Act (the “FD&C Act”). The FDA also foreclosed any argument that the CBD products were dietary supplements, concluding that the CBD products at issue did not meet the definition of dietary supplements in the FD&C Act. Similarly, the FTC took aim at the companies’ promotional materials, expressing concern that the claims “may not be substantiated by competent and reliable scientific evidence.”

These warning letters provide helpful insight into how the FDA and the FTC are approaching the cannabis industry and the steps they will take to regulate products and claims. The letters are also a helpful example of the interplay between the FDA and the FTC: the former being focused on whether the products are safe enough for distribution and on the on-label claims and the latter focusing on the advertising about the product’s benefits. Only time will tell how aggressive these agencies will be in regulating CBD products but, in the meantime, companies should keep in mind that there is a great deal of uncertainty surrounding cannabis products and the regulators are watching.

Source: https://www.lexology.com/library/detail.aspx?g=b5e492c5-a994-4cb8-9ac5-1da96d206ed0

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