The Federal Trade Commission (“FTC”) announced on December 17 that it has taken action against six sellers of CBD products. In case you need a refresher, CBD is a substance found in the cannabis plant that is widely touted for its health benefits. The 2018 Farm Bill legalized hemp-derived CBD at the federal level, and almost all states have followed suit in the last two years. Notably, however, the FDA still prohibits adding CBD to food and dietary supplements. While CBD is generally thought to have certain health benefits – including, for example, sleep, relaxation, inflammation, pain – to make health claims in advertising requires a high level of scientific support.
Which brings us to Operation CBDeceit. The FDA and FTC alike have previously sent warning letters related to CBD claims, but last week the FTC announced the first organized crackdown against unsubstantiated CBD claims: Operation CBDeceit. That’s right, CBDeceit. We may just keep repeating it because it’s that fun to say. Hats off to whoever at the Commission thought of this one. The focus of CBDeceit is the same as that of the warning letters – companies that claim their CBD products can treat serious diseases, such as cancer and Alzheimer’s. In its press release, the FTC described it this way:
“The FTC is taking action against six sellers of CBD-containing products for allegedly making a wide range of scientifically unsupported claims about their ability to treat serious health conditions, including cancer, heart disease, hypertension, Alzheimer’s disease, and others.”
These actions do differ from the FTC’s previous warning letters, however, in one critical way. While previously the FTC and FDA sent warning letters, in each of these cases the FTC issued a complaint and a proposed consent order. This signals an increased level of enforcement from the Commission. In the wake of the 2018 Farm Bill, warning letters were used to educate industry, but the FTC now appears to have moved past warnings to formal legal action. This is often a typical sequence for the FTC – gentler persuasion first and then the big stick. The orders prohibit the companies from making claims about certain stated conditions, such as Alzheimer’s, arthritis, chronic pain, Parkinson’s, psoriasis, without human clinical testing to substantiate the claims. For all other health-related claims, the respondents are required to have competent and reliable scientific evidence.
Interestingly, five out of the six consent orders would require consumer redress. Whether or not the FTC can collect consumer redress is currently before the Supreme Court. The FTC has been aggressive in recent years with respect to seeking avenues for stricter penalties, so it’s unsurprising that they continue to push the issue here, despite the unresolved nature of its authority.
Manufacturers and sellers should take notice of Operation CBDeceit. While enforcement is still being limited to the most serious disease claims, regulators are clearly paying attention to this area. Before making any claims in advertising, make sure you have the required substantiation.