FTC announces first monetary sanctions for CBD medical claims, says to expect more

CBD FTC crackdown, FTC announces first monetary sanctions for CBD medical claims, says to expect more

The U.S. Federal Trade Commission announced its first crackdown on deceptive claims in the CBD market Thursday, issuing fines and sanctions to six manufacturers accused of misleading consumers about the health benefits of the cannabis extract.

The FTC, an independent government agency charged with consumer protection, says the six companies made illegal claims about their products’ ability to treat diseases including cancer, high blood pressure and Alzheimer’s disease.

“We are not saying that CBD products cannot provide some relief to some patients,” Andrew Smith, director of the FTC’s Bureau of Consumer Protection, told reporters after announcing the sanctions. “But the same rules of the road apply to CBD products that apply to all other health products. In no event can they exaggerate or lie about the state of the science.”

The sanctioned CBD makers were:

The FTC cited illegal advertising claims made by each of the manufacturers. Claims included promises that taking CBD would “leav(e) you pain free and feeling years younger.” Many included customer testimonials saying the products cured rare ailments or replaced prescription drugs, including OxyContin.

CBD FTC crackdown, FTC announces first monetary sanctions for CBD medical claims, says to expect more

Screen shot from a sanctioned CBD manufacturer (image courtesy FTC)

Each of the companies is also required to notify consumers within 45 days of the FTC sanctions. They do that by emailing anyone who bought the products an email with the subject line, “About Your Purchase from [company name].”

The companies then must submit a report to the FTC within 90 days summarizing their actions, including the total number of eligible customers identified and notified.

The agency said the CBD industry could expect more actions in the future when unsubstantiated medical claims are made.

“Don’t make spurious health claims that are unsupported by medical science,” Smith said in a statement. “Otherwise, don’t be surprised if you hear from the FTC.”

Thursday’s actions were the FTC’s first monetary sanctions against CBD makers, but not the first enforcement of advertising rules. In April, the FTC announced a settlement with the owner of Whole Leaf Organics to stop touting three CBD treatments as an “anti-viral wellness booster.”

Learn more from FTC and FDA attorneys about legal compliance in the CBD industry at MJBizCon2020, now available on demand.

Kristen Nichols can be reached at [email protected]

 

4 comments on “FTC announces first monetary sanctions for CBD medical claims, says to expect more
  1. Beaudon Spaulding on

    More of this please!! If you are foolish enough to make clearly unacceptable statements, then you will be fined and prosecuted! Spend the money to do the science so you can feel the honor in making the claim!

    Reply
  2. Christopher Visser on

    Fining a company for a legit customer testimonial is beyond unacceptable in my personal and professional cannabis business owning opinion.

    This is the equivalent to censorship.

    A lot of us joined this industry to help others… so, now their is a department out there that wants to fine a sensor positive health movements???

    It’s not human, it’s not love.

    On the flip side, if a company is making the claim… I couldn’t agree more. Taking advantage of the end consumer in the name of making a sale is disgusting.

    The cannabis industry is paving new roads… we’re in this together, but I can’t see the sense in fining a company for customer testimonials.

    Especially if they are a third-party review securing company like TrustPilot or ShoppersApproved.

    Does anyone know if any of these companies got warning letters?

    Reply
    • Kristen Nichols on

      Thanks, Christopher! No, none of the six got warning letters. I asked the FTC about that, and they said they have no obligation to send warning letters first and that generally the decision (warning letter or sanction) comes down to the company’s behavior.

      Reply
  3. Bruce Ryan on

    As much as I love The Tree of Life, reckless claims are still BS. Make no WRITTEN suggestions, claims or statements that THC/CBD/CBN/CBG (etc) will “cure’ or “prevent” any disease, condition, illness or complaint. Sure, a customer stating such things…. an interview, response letter etc.
    We are entitled to our opinions.

    The moment an ad or written promotion is made – these folks (FTC/FDA/DEA/FBI et. al.) jump back on the prohibition bandwagon. Ninety years of prohibition = job protection.

    Reply
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