Advertising and marketing CBD merchandise is a problem. For years we’ve written about dangers related to making health-related claims in advertising. However there’s one other avenue that the federal authorities doesn’t like: unsubstantiated claims. Final week, the Federal Commerce Fee (FTC) determined to ratchet up enforcement and sent out warning letters to almost 700 firms (a few of which provide CBD merchandise) regarding their alleged unsubstantiated claims.
FTC’s template warning letter, styled “Notices of Penalty Offenses,” is here. The letter notes that it contains the FTC’s Discover of Penalty Offenses Regarding Substantiation of Product Claims (or “Substantiation Notice“) and Discover of Penalty Offenses Regarding Misleading or Unfair Conduct round Endorsements and Testimonials (or “Endorsement Notice“). It additionally notes that receipt of a discover of penalty offenses can result in civil penalties of as much as $50,120 per violation. Underneath federal law, in some instances every day of continuous exercise could possibly be construed as a separate violation.
The FTC’s numerous notices deal with a number of potential points, which we could dig into intimately in subsequent posts. For in the present day, there are two basic buckets of issues: unsubstantiated claims and points round endorsements (I’ve written about FTC endorsement points on a number of events, see right here for instance). The FTC’s letter notes that it “doesn’t replicate any evaluation as as to whether you could have engaged in misleading or unfair conduct. We’re distributing related letters to quite a few different firms.” Nonetheless, what it means is that the company is taking a tough take a look at firms in a wide range of industries – not solely CBD, but additionally “firms concerned within the advertising of OTC medicine, homeopathic merchandise, dietary dietary supplements, or practical meals”.
Notably, the FTC has guidance for well being merchandise compliance, however this generally is a sensitive topic for the reason that FDA categorically takes the place that CBD merchandise can’t be handled or marketed like common healthcare merchandise. So CBD firms on the receiving finish of this letter – or who obtain related letters sooner or later – could have a troublesome time sifting by way of the FTC’s myriad completely different insurance policies.
Whereas the FTC’s letter notes that it isn’t an evaluation of partaking in wrongful conduct, this alerts to us that the company is ramping up in direction of enforcement. As talked about, we’ll in all probability dive additional into these matters in future weblog posts, however needed to get a brief abstract out now. For extra on CBD advertising claims usually, see the next posts: