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CBD Business Threats – FDA Letters and Consumer Complaints

cbd businessBy: Susan St. John

With phenomenal growth and expansion in the Hemp Industry comes trials, tribulations, the FDA, and consumer complaints! Let’s take a look at what’s going on that might have an adverse impact on your burgeoning business or foray into Hemp a/k/a CBD.

FDA Letters

The FDA sent letters to 15 CBD business companies in late November 2019, warning and admonishing these companies that their CBD products were being promoted to treat disease or for having certain therapeutic properties. Specifically, the FDA reviewed these companies’ websites, social media pages, marketing material, etc., finding that the companies promoted products containing cannabidiol or CBD in violation of the Federal Food, Drug, and Cosmetic Act (FD&C Act). Further, the FDA stated that the companies’ CBD products are unapproved new drugs sold in violation of the FD&C Act, and were misbranded under the FD&C Act. The FDA letters did not just target products sold for human use and consumption, but also targeted CBD products sold for use on pets, stating that “the products are unapproved new animal drugs that are unsafe under the FD&C Act and adulterated products under the FD&C Act.

The FDA found that companies were marketing or intending to market CBD products as unapproved dietary supplements, finding that the products did not meet the definition of a “dietary supplement” pursuant to the FD&C Act. Specifically, the FDA stated that “FDA has concluded, based on available evidence, that CBD products are excluded from dietary supplement definition under the FD&C Act if an active ingredient in a drug product has been approved under the FD&C Act.” Further, if an active ingredient has been authorized for investigation as a new drug for which substantial clinical investigations have been instituted and for which the existence of such investigations has been made public, then products containing the substance are outside the definition of dietary supplement.” The FDA’s conclusions arise from the fact that CBD is an active ingredient in Epidiolex which has FDA approval for the treatment of seizures. Based on the FDA’s findings, there was no exception allowing such products to be excluded from the dietary substance definition.

In addition, the FDA found that CBD products such as Gummies described as “snacks” were conventional human food with a drug additive. Because the FDA has approved CBD as an ingredient in Epidiolex, the incorporation of CBD into food products is a violation of the FD&C Act. Further, food additives must have premarket approval by the FDA before being added to foods and introduced in the market. Without approval, the food is considered adulterated and unsafe for consumption under the FD&C Act.

Further, the FDA found these companies to be making claims that their CBD products offered disease treatment or therapeutic uses. Citing specific examples that claimed CBD relieves pain and inflammation, is an anti-oxidant, anticonvulsant, anti-depressant, anti-psychotic, anti-tumoral, and neuroprotective; uses include PTSD, fibromyalgia, schizophrenia, diabetes, MS, crohn’s disease, opioid addiction, the FDA concluded that the products were not recognized as safe and effective for the claims being made by the companies, and were thus, new drugs under the FD&C Act. Currently, there are no FDA-approved applications for any of the claims made for the CBD products offered by these companies. Additionally, FDA approval of a new drug is based on scientific data and information demonstrating a drug is safe and effective. For CBD products and the claims made by these companies, there isn’t proper scientific data or information showing the drug to be safe and effective for the uses so claimed.

The FDA also found the companies’ CBD products’ labels to have inadequate directions for use. None of the conditions alleged to be helped by CBD products are conditions that can be self-diagnosed or treated, but require diagnosis and treatment by medical professionals. Thus, the companies’ CBD products were considered misbranded.

The FDA letters targeted CBD products for pets in much the same way as it targeted CBD products for human consumption. CBD Companies can anticipate more scrutiny from the FDA as the industry continues to develop and proliferate.

CBD Consumer Complaints

Spurred by the FDA Letters, consumers are jumping on the band wagon filing suits that CBD companies are selling unapproved new drugs, product labeling is misleading, products sold are unlawful adulterated food, and the products are sold in violation of the law. Consumers’ complaints claim that defendant CBD companies intended to mislead or deceive plaintiffs. The allegations in the law suits contain direct references and claims from CBD companies’ websites, extolling the benefits of CBD products. Pointing to the FDA letters, these suits enumerate how CBD companies have allegedly violated the FD&C Act and entered unlawful products into interstate commerce.

Further, CBD companies should be aware that consumer complaints may be filed that simply allege consumers relied on the claims made by CBD companies to their detriment, causing a consumer to forego care by medical professionals, exacerbating medical conditions, or not alleviating symptoms resulting in harm to the consumer.

Rethink Marketing, Rethink Labeling (and ingredients in products)

What can a CBD business do to lessen the chance of FDA scrutiny or consumer complaints? Rethink marketing strategy and avoid claims of treatment or therapeutic benefits. Make disclaimers and inform the public that medical care from a professional for symptoms should be sought. Include statements that CBD products are not an alternative to medical care and should not be used to replace prescriptions ordered by a medical professional. When using consumer testimonials make sure to place disclaimers under each testimonial.

Although not foolproof, think about reformulating products to include whole hemp products and not products containing CBD isolate only since CBD isolate is the active ingredient in Epidiolex (an approved drug). Once reformulated, relabel to show products are made with “hemp extract.” With hemp extract being a naturally occurring substance that has not been concentrated or enhanced, it might not be subject to the FD&C Act. Keep in mind that the new rules in Florida that went into effect on January 1, 2020, address the state “Hemp Program” not the state CBD program. A state’s rules will likely follow federal law very closely, but CBD companies (or physician’s offices, pharmacies, or others) should be mindful of both state and federal laws regarding Hemp products to ensure compliance of products introduced into the market.

If in doubt as to whether your CBD company (or physician’s office, pharmacy, or others) is complying with FDA rules regarding CBD products, seek guidance from an attorney versed in FDA rules and Hemp products under Federal and State Law. Further, be prepared to vigorously defend against consumer complaints. The Florida Healthcare Law Firm has attorneys with requisite experience in federal and state regulations – and litigation skills (should that be necessary) to help you navigate the complexities of this rapidly growing industry.