Today, the U.S. Federal Trade Commission (FTC) announced Operation CBDeceit, a suite of six settlements that herald the FTC’s ongoing efforts to monitor the marketplace regarding misleading cannabidiol (CBD) product claims. In a statement, FTC leadership said the six settlements “send a clear message to the burgeoning CBD industry” to avoid making “spurious health claims that are unsupported by medical science.” The FTC noted that companies, particularly CBD product manufacturers, “that represent expressly or by implication that what they sell can prevent, treat, or cure serious medical conditions will be held to the highest substantiation standards and marketers can expect careful scrutiny of those promises.”
The FTC announced settlements with Bionatrol Health, LLC, Isle Revive, LLC, Eipchouse, LLC, CBD Meds, Inc., HempmeCBD, Reef Industries, Inc., and Steve’s Distributing, LLC and certain associated individuals. The six settlements involve CBD products (one of the settling companies was also targeted for deceptive claims regarding cannabigerol (CBG) allegedly making a range of health claims that respectively involve serious ailments, such as cancer and Alzheimer’s Disease. The companies are required to stop making such claims unless they are supported with competent and reliable scientific evidence, namely, “randomized, double-blind, and placebo-controlled” “human clinical testing” on the product or one that is “essentially equivalent.” Based on the FTC’s actions even against CBD marketers claiming that their products are “medically proven,” this clearly represents a higher bar for evidence quality than the FTC believes CBD manufacturers are currently able to produce. The settlements also require the companies to notify consumers and, in all but one case, pay fines between $20,000 and $85,000.
As the industry continues to await guidance from the Food and Drug Administration (FDA) regarding the marketing of CBD products, Operation CBDeceit is a significant reminder that government bodies are increasingly scrutinizing unsupported health claims by CBD manufacturers, especially those related to cancer and COVID-19. Earlier this year, the FTC brought an action against a CBD product manufacturer that allegedly claimed its wares could prevent or treat COVID-19 and cancer. Collectively, these actions are particularly notable because the FTC initiated them independently, whereas previous FTC actions involving CBD marketing claims were primarily undertaken in concert with the FDA.
The FTC’s action indicates that it is not waiting on the FDA’s forthcoming enforcement policy to take action against unsupported health claims. Going beyond warning letters, the FTC appears ready to take enforcement action against CBD product health claims it finds objectionable. In sum, there is good reason for CBD companies to be careful regarding unsupported healthcare claims.