On March 5, 2021, the Federal Trade Commission announced that, following a public comment period, the agency has approved final administrative consent orders against six companies selling cannabidiol products nationwide.
In December 2020, the FTC announced its first law enforcement crackdown on purported deceptive claims in the burgeoning market for CBD products.
The FTC took action against the six sellers 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.
The FTC’s specific allegations against each company can be found in the press release announcing the crackdown, and respectively include, without limitation, claims, allegedly without substantiation:
- That CBD products are safe for all users, treats pain better than prescription medications like OxyContin, and prevents and treats age-related cognitive decline and chronic pain
- That CBD oil is “medically proven” to improve a variety of conditions
- That CBD is able to prevent a wide range of serious conditions, including cancer, diabetes, and heart disease
- That CBD effectively treats, prevents, or mitigates serious diseases and conditions like artery blockage, glaucoma, autism, and schizophrenia
- That the U.S. government has confirmed the health benefits of CBD
- That CBD products could treat or cure serious ailments like substance abuse, and AIDS
- Of possession of studies showing CBD is effective at treating autism
- That CBD effectively treats, cures, or mitigates autoimmune disease, arthritis, and irritable bowel syndrome
- The CBD and cannabigerol (CBG) are effective alternatives to prescription medications and have antibacterial properties
“The six settlements announced today send a clear message to the burgeoning CBD industry: Don’t make spurious health claims that are unsupported by medical science,” said FTC attorney Andrew Smith, then Director of the FTC’s Bureau of Consumer Protection. “Otherwise, don’t be surprised if you hear from the FTC.”
The administrative orders settling the FTC’s charges, respectively, prohibit certain prevention, treatment, or safety claims about dietary supplements, foods, and drugs, unless there exists human clinical testing to substantiate the claims; require the possession of competent and reliable scientific evidence when making health-related product claims; require notification to consumers; and, as to several respondents, monetary payment.
Commissioner Rohit Chopra and Commissioner Christine S. Wilson issued separate, concurring statements.
Commissioner Chopra stated that “when companies lie about the effectiveness of their treatments for serious conditions, this harms patients and diverts sales away from firms that tell the truth.” “The Commission has repeatedly found that objective claims require a reasonable basis, and apprising firms of these findings – along with a warning that noncompliance can result in penalties – makes it significantly more likely they will come into compliance voluntarily. In fact, when the Commission employed this strategy four decades ago, it reportedly resulted in a “high level of voluntary compliance achieved quickly and at a low cost.” Going forward, we should pursue this strategy,” stated Chopra.
Contact an experienced FTC defense attorney to discuss the impact of these administrative settlements, as well as the FTC’s Penalty Offense Authority.
Richard B. Newman is an FTC defense lawyer at Hinch Newman LLP. Follow FTC lawyer on Twitter.
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