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According to a recent survey conducted by Brightfield Group, the e-commerce sales of cannabidiol (CBD), including hemp-derived CBD products, have ramped up in response to the coronavirus pandemic.
Unfortunately, during these uncertain times, a handful of CBD companies have been taking advantage of people’s fear and anxiety over the spread of the virus, making certain claims that CBD can treat and even cure the virus.
A few weeks ago, the FDA issued a round of warning letters to companies making dubious statements pertaining to COVID-19, several of which sold and marketed CBD products (i.e., CBD Online Store, Herbal Amy Inc, and NeuroXPF).
For the past few years, CBD companies have continuously received a fair amount of scrutiny from the FDA, especially manufacturers and distributors who sell and advertise CBD products with unsubstantiated therapeutic claims. The FDA’s main concern is that these products have not been shown to be either safe or effective, and ultimately fears that “deceptive marketing of unproven treatments may keep some patients from accessing appropriate, recognized therapies to treat serious and even fatal diseases.”
Although the CBD industry is well aware of the legal risk of making unproven medical claims regarding this particular cannabinoid, confusion remains regarding what exactly constitutes over-the-line claims that actually put CBD companies at risk of FDA enforcement actions.
To do this analysis, you need to know what medical claims are, and you have to lay out the nature of the claims being made related to CBD that the FDA ostensibly will not tolerate, which is a moving target at best.
The FDA’s jurisdiction is triggered by a product’s intended use. Generally, the FDA determines intended use based on claims made by the product’s manufacturers and distributors, which are often contained on the product’s labeling or in promotional or advertising materials. If a company expressly or implicitly states that its product can be used to diagnose, cure, mitigate, treat, or prevent a disease, or affects the bodily structure or function of the end-use consumer, the FDA will likely conclude that the product is a drug under the Food, Drug and Cosmetic Act (FDCA).
Drugs are tightly regulated by the FDA. Federal law mandates that all new drugs in the United States be shown to be safe and effective for their intended use prior to marketing. In June 2018, the FDA approved CBD as the active ingredient in Epidiolex, a prescription drug used for treating epilepsy. However, the approval of CBD in Epidiolex did not result in the approval of CBD in other drugs or product categories, such as foods, dietary supplements, or cosmetics. In its statement announcing the approval of Epidiolex, the FDA warned that it was “prepared to take action when [it] see[s] the illegal marketing of CBD-containing products with serious, unproven medical claims.”
Since 2015, the FDA has sent a number of warning letters to manufacturers and distributors of CBD that made various medical claims about their CBD products. In those letters, the FDA took the position that those medical claims rendered the subject CBD products unapproved drugs that violated the FDCA.
The offending claims on these companies’ product labels, websites, and social media accounts, included the following:
- “CBD…Inhibits cancer cell growth […] Treats psoriasis.”
- “CBD has demonstrable neuroprotective and neurogenic effects, and it’s anticancer properties are currently being investigated at many academic and independent research centers in the United States and worldwide.”
- “The Benefits of CBD Oil for ADHD . . . It’s not unusual for people with ADHD to feel anxious and on the edge. CBD is known for its anti-anxiety properties that can promote relaxation and stress relief. It can also help to restore focus and ability to concentrate on specific tasks, as well as reduce impulsivity.”
- “CBD has also been shown to be effective in treating Parkinson’s disease.”
- “CBD can also be used in conjunction with opioid medications, and a number of studies have demonstrated that CBD can in fact reduce the severity of opioid-related withdrawal and lessen the buildup of tolerance.”
- “Helps reduce…Inflammation…Arthritis…Back Pain…Muscle Aches…Joints.”
- “A 2018 study showed that CBD offers quick relief of depression and anxiety symptoms and that the residual effects can last up to seven days.”
- “Can CBD help with Corona Virus? Possibly! But one thing is for sure, it will help you relax when everyone else is panicking.”
The foregoing disease and/or bodily structure/function claims and their wide range of being very specific to fairly generic demonstrates how little it takes to turn a CBD product into a drug for FDA enforcement purposes.
Nevertheless, many CBD companies continue to make unsubstantiated medical claims about their CBD products based on the assumption that FDA enforcement actions are strictly limited to issuing warning letters at this point. Though factually true to date, these letters are not without force. An FDA warning letter will lead to further and more significant headaches, including litigation and major fines and penalties. In addition, there are other claims that may result from an FDA warning letter, including state law consumer protection claims based on prohibiting unfair and deceptive trade practices, claims under the Lanham Act for false and misleading advertising, consumer and shareholder actions relating to CBD (think of Curaleaf Inc.) and even personal injury claims.
If CBD companies want to keep the 800-pound gorilla that is the FDA off their back, they should not make any medical claims whatsoever, expressed or implied, at least until the FDA forges a legal regulatory path for the sale and marketing of CBD products, which it is inevitably fated to do — it is just a matter of when.
Nathalie Bougenies practices in the Portland office of Harris Bricken and was named a “2019 Rising Star” by Super Lawyers Magazine, an honor bestowed on only 2.5% of eligible Oregon attorneys. Nathalie’s practice focuses on the regulatory framework of hemp-derived CBD (“hemp CBD”) products. She is an authority on FDA enforcement, Food, Drug & Cosmetic Act and other laws and regulations surrounding hemp and hemp CBD products. She also advises domestic and international clients on the sale, distribution, marketing, labeling, importation and exportation of these products. Nathalie frequently speaks on these issues and has made national media appearances, including on NPR’s Marketplace. Nathalie is also a regular contributor to her firm’s Canna Law Blog.