It’s the Wild West out there!” How often have you heard that statement made about health claims for products containing CBD? But here’s the thing: It’s not the Wild West, Lesley Fair, senior attorney with the Federal Trade Commission, noted in a recent blog post.
Gone are the days when a CBD company could make “health claims” or “disease claims,” as they are referred to by the U.S. Food and Drug Administration, without fear of strict government retribution. The FDA does not allow disease claims such as “suggested treatment for anxiety” to be made on dietary supplements or hemp products in any form.
During the past two years, the FDA and the FTC have increased enforcement actions against companies making online marketing claims in blogs, social media, websites and more.
What is a claim?
Before marketing a CBD product, it’s important to know what constitutes a health or disease claim. Here are a few general rules to help determine if a claim is being made:
- Anything ending in “itis” refers to inflammation, such as arthritis.
- Anything a drug is “indicated for,” such as Xanax being indicated for anxiety.
- Anything with “anti” in the name, such as anti-inflammatory.
- The name of any illness, such as depression.
To find out if the FDA already has sent out warning letters related to a health claim, search the terms “FDA warning letter + insert claim.”
What can/can’t I say?
Marketing rule No. 1: Be truthful and don’t mislead the consumer; at the same time, be effective in growing the business. Since nothing in the CBD business is risk-free, it’s important to convey a marketing message in an ethical and low-risk manner.
For example, a brand might feel it has competent data to make a statement about improved quality of sleep. This same message crosses the line to high risk if it talks about use for insomnia, which the FDA considers a disease claim.
Here are two examples:
- Using the words “pain” and “inflammation” are considered midlevel risks and should be avoided. A more compliant way to state such information is to address a product’s use for discomfort.
- CBD is widely touted for anxiety, but the FDA is likely to flag companies using this term for making a disease claim. If accurate, replace the term with “happy mood support” or “balanced state of mind.” These phrases get the point across without using buzzwords that might increase the chance of drawing the attention of regulators. Again, be sure to never mislead your consumer, and be ready to substantiate any statements if necessary.
Topical CBD products are generally thought to carry a lower regulatory risk than ingestible products. Topicals (cosmetics) are defined as products applied to the human body for cleansing, beautifying, promoting attractiveness or altering the appearance.
A common mistake companies make when marketing topicals is advertising them for inflammation, pain or any other symptomatic relief. By using claims outside of the “beautifying” definition, an otherwise-compliant topical product is turned into a drug simply by using words such as pain.
Hashtags and other considerations
Many people enter the hemp world from other industries and might not understand the nuances of marketing dietary supplements and hemp-based CBD products. For example, standard practices from tech or apparel such as hashtags and product descriptions do not necessarily translate into compliant strategies for marketing hemp-based CBD products.
Here are a few examples:
Hashtags and photographs: Tagging a photo #Relief is relatively lower risk, whereas #PainRelief is risky and would shift an otherwise compliant post to an elevated risk level.
Depression: A post about depression awareness could be considered compliant, as companies have the right to speak about issues that are important to their business and their customers. This same post would be noncompliant with a hashtag that promotes its product, however, such as #BuyMyCBD. If this same post had zero noncompliant hashtags but contained a product photo, this would be considered an implied depression claim. This is another reason marketing material should pass through a regulatory review before getting posted.
Meta tags: SEO companies drive website traffic with meta tags. This is considered advertising and must not be misleading. I have not seen warning letters based solely on noncompliant meta tags, but they are an easily searchable red flag to authorities that might indicate deeper compliance issues. Working with a consultant to develop marketing best practices can help avoid these potentially unforeseen pitfalls.
Federal response
The FDA and FTC have issued numerous warning letters to CBD companies for making health and disease claims. The letters provide specific examples of what they are enforcing, such as references to depression, cancer and inflammation. News releases sometimes accompany these warning letters and provide more context to their enforcement action.
The FTC can take additional action by issuing an administrative complaint, which first happened to a CBD company in April 2020 in relation to the coronavirus. The agency announced that Marc Ching, the owner of Los Angeles-based Whole Leaf Organics, had settled with federal authorities and agreed to stop making health claims about three of his products. Previously, one of the company’s ads touted the CBD treatment as an “anti-viral wellness booster.”
In December, the FTC rocked the CBD world with Operation CBDeceit by issuing fines and sanctions against six cannabidiol companies accused of misleading consumers about the health benefits of the cannabis extract.
Possible penalties
The most common FDA and FTC penalties come in the form of warning letters. Here are reasons to avoid these letters:
- They require administrative and legal resources to respond.
- Repeat warning letters can lead to injunction or seizure. One warning letter puts you on the FDA/FTC “radar.”
- They alert class action attorneys who might use a warning letter as proof of wrongdoing in their lawsuit.
- Your name and company become a matter of public record and are easily found in a web search.
- They scare away executive talent and investors, which hurts the company’s overall value.
Penalties also come in the form of the FTC’s administrative complaints, which can have serious ramifications. December’s CBDeceit crackdown included fines up to $85,000—but this was only the beginning.
Companies receiving FTC penalties might be required to inform customers of the complaint via their social-media accounts, website or written notifications. This communication will require business resources and also might hurt the company’s reputation and scare away customers.
The FTC also can require the company to monitor its compliance and submit reports to the agency. Companies involved in the recent FTC complaints must report on compliance for 20 years. These actions not only carry an administrative burden but can hinder future investment opportunities. They might also require refunding customers, and complaints can lead to class action lawsuits as well.
Some go unpunished
Not every company making claims will attract trouble. FDA Principal Deputy Commissioner Amy Abernethy recently noted, “We will continue to monitor and take action, as needed, against companies that unlawfully market their products—prioritizing those that pose the greatest risk of harm to the public.” This clearly shows the agency is taking a risk-based approach to enforcement, so knowing which high-risk claims to avoid is important.
Most warning letters cite claims made online, although companies are responsible for all marketing materials, including mailers, newsletters and information distributed at trade shows.
Authorities look at the 30,000-foot view of a company’s total online presence, which includes videos, social media, blogs, FAQs, infographics and even podcasts. One claim might not attract enforcement action, but the combination of a claim in a video, a noncompliant hashtag in social media and a testimonial claim can elevate risk.
Authorities piece together claims to create one big picture of noncompliance. They make examples of companies not following the rules—especially in areas they want to highlight, such as COVID-19, depression, opiate-reduction and claims made in testimonials—to name a few.
Asa Waldstein is a 20-year dietary supplements executive now focusing on bridging the compliance, marketing and regulatory gap between the supplement and hemp industries. He chairs the American Herbal Products Association’s Cannabis Committee. Waldstein also is owner of the consulting company Supplement Advisory Group, and his Regulatory Education Series platform regularly hosts free events for the community. Learn more and contact him at AsaWaldstein.com.
