FTC Cracking Down and Issuing Fines for Deceptive Claims by CBD Companies

On December 17, the FTC issued a press release announcing its first law enforcement crackdown on deceptive claims in the growing market for cannabidiol (CBD) products. According to the press release, a number of “companies made unsupported claims that their oils, balms, gummies, coffee, and other goods could treat serious diseases such as cancer and diabetes.” We’ve written extensively about the FDA’s role in preventing CBD companies from making health claims about their products, and covered the overlap between the FDA and FTC’s enforcement roles here.

The federal Food, Drug & Cosmetic Act (“FDCA”) provides the FDA with regulatory authority over product labeling and seeks to ensure that consumer products (foods, dietary supplements, cosmetics, tobacco products and drugs) are not misbranded, meaning that the labels do not contain false and misleading statements. The role of the FTC under the Federal Trade Commission Act (“FTC Act”), however, is to regulate “advertising” to protect the public from unfair and deceptive claims.

The overlap is apparent, but the distinction between packaging/labeling and advertising is not always clear. Some courts have expanded the authority of both the FDA and FTC by interpreting “labeling” to include products sold on the Internet, especially where the products

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