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As 2020 drew to a close and Congress scrambled to reach a deal to continue funding the federal government, tucked in amidst the 2124 pages of the 2021 Appropriations Bill is a new power for the FTC:  civil penalty authority for deceptive COVID-related acts and practices.  Titled the COVID-19 Consumer Protection Act (see page 2094 here), the law states as follows:

(b) For the duration of a public health emergency declared pursuant to section 319 of the Public Health Service Act (42 U.S.C. 247d) as a result of confirmed cases of the 2019 novel coronavirus (COVID–19), including any renewal thereof, it shall be unlawful for any person, partnership, or corporation to engage in a deceptive act or practice in or affecting commerce in violation of section 5(a) of the Federal Trade Commission Act (15 U.S.C.45(a)) that is associated with—

(1) the treatment, cure, prevention, mitigation, or diagnosis of COVID–19; or

(2) a government benefit related to COVID–19.

(c) ENFORCEMENT BY THE FEDERAL TRADE COMMISSION.—

(1) VIOLATION.—A violation of subsection (b) shall be treated as a violation of a rule defining an unfair or deceptive act or practice prescribed under section 18(a)(1)(B) of the Federal Trade Commission Act (15 U.S.C. 57a(a)(1)(B)).

The civil penalty authority is granted through the duration of the current public health emergency.  The current maximum civil penalty amount per violation is $43,280.

Here’s why this is significant:  The FTC generally does not have authority to seek civil penalties for a first violation of the FTC Act.  However, if a company or individual is subject to an order and then violates that order or where the FTC has obtained a final cease and desist order via litigation and subsequently put a non-party on notice of a violation, the FTC can seek civil penalties.   With the authority granted in the COVID-19 Consumer Protection Act, though, the FTC can identify practices relating to COVID-19 treatment, cure, prevention, mitigation, diagnosis, or a government benefit that the agency considers deceptive per Section 5 of the FTC Act and seek civil penalties for that violation.

The law does not specify how each violation will be calculated.  However, at a recent webinar, the Rose Sheet reports that Richard Cleland, FTC Assistant Director for Advertising Practices, indicated that “Every ad is a separate violation and every day that that ad runs or is disseminated to the public is a separate violation.”

As we chronicled, the FTC issued hundreds of COVID-related warning letters relating to deceptive COVID claims during 2020.  And yet, the agency faced criticism from members of Congress who questioned why the FTC did not pursue financial remedies on consumers’ behalf.  With the rollout of the vaccines, potentially more financial assistance in the works, and the virus raging on, the FTC has a larger hammer than it did just a year ago and advertisers of COVID-related products should expect them to use it.

The FTC announced yesterday settlements with six companies accused of making a broad range of unsubstantiated health claims, including that CBD can treat cancer, heart disease, hypertension, Alzheimer’s disease, bipolar disorder, and chronic pain, among others.   Nicknamed, “Operation CBDeceit,” the enforcement sweep is part of the Commission’s ongoing effort to protect consumers from false, deceptive, and misleading health claims made in advertisements on websites and through social media companies such as Twitter.

For those who have been monitoring regulatory enforcement relating to CBD claims, the types of claims listed in the FTC’s Complaints are familiar reading. As we’ve chronicled here, here, and here), prior FTC and FDA enforcement have focused on aggressive express health claims that were very similar to the claims at issue in today’s settlements. In that respect, these settlements do not differ from prior enforcement.

This announcement is noteworthy for other reasons, though, including the following:

  • Bigger Than Before. This is the first big FTC enforcement announcement regarding CBD health claims involving settlements with multiple companies. Prior to this, the FTC coordinated with FDA on dozens of warning letters relating to CBD and false COVID treatment and prevention claims in addition to other CBD warning letters. The FTC also announced a settlement with Marc Ching regarding the “Thrive” CBD supplement in July 2020 relating to claims that the product could “treat, prevent, or reduce risks from COVID-19”. Yesterday’s announcement seemed intended to convey a more coordinated and authoritative message than prior settlements and warning letters.
  • Individual Liability. These settlements also name not just the company as a respondent, but also individuals in their official capacity as corporate officers. Given the significant degree of entrepreneurial activity in the CBD and hemp industries, this should be understood as an indication that the FTC will look to hold individuals liable particularly where the respondent company is comprised of only a few people.
  • Monetary Relief. In addition, five of the six settlements included monetary components ranging from $20,000 to $85,000. The Marc Ching settlement did not involve a financial component, although it is not unusual for there to be a financial component where the FTC believes that the conduct warrants it.
  • Prescribed Consumer Notification.  The respondent companies are also required to notify consumers about the settlements per prescribed terms. For example, the Easybutter, LLC, settlement requires the company to provide a notice on all of their social media accounts (including any Facebook, Twitter, Instagram, or YouTube accounts) and on the first page of their websites. Such notice must link to a copy of the Order, along with a toll-free telephone number and an email address for the redress administrator. The notice must be posted not later than three days after the effective date of the Order and for at least one year after the redress period ends.       In addition, the companies must use a form letter (see page 18) attached to the Orders to directly notify consumers who purchased their products about the FTC’s charges.

So, what does this mean? Although these settlements didn’t break new ground on the kinds of claims the regulators are targeting with regard to CBD products, they signal heightened attention on an industry that has proliferated exponentially over the last couple years. It’s also notable that Commissioner Chopra called for the FTC to pursue larger companies with regard to spurious claims and to focus on unlawful opioid treatment claims, which can be couched as treatment for chronic pain and related conditions. Health claims have long been of interest for the FTC. Given this and the upcoming change in the federal administration, the CBD industry should expect more settlements like these in 2021.

FDA and FTC Joint Warning Letters Target Amazon Affiliates Making False COVID-19 ClaimsFDA and FTC Joint Warning Letters Target Amazon Affiliates Making False COVID-19 ClaimsEarlier this week, federal regulators continued their efforts to combat the spread of products featuring allegedly false and misleading claims that products can diagnose, treat, cure, or prevent COVID-19.  In warning letters issued to CBD Gaze, Alternavita, Musthavemom.com, and Careful Cents LLC, the agencies identify the respective recipients as participants in the Amazon Affiliate program.  Amazon Affiliates are marketers who earn commissions by promoting products sold on Amazon.  The letters state that the products at issue, which include essential oils, grapefruit seed extracts, cod liver oil, and others, feature false treatment and prevention claims such as the following:

  • CBD Gaze:  “Find the best CBD Oil to help fight Coronavirus.”
  • Alternavita:  “4 Proven Ways To Protect Yourself Against Coronavirus,” you represent that “Everyone is concerned about Coronavirus and looking for ways to protect themselves,” and then state the following:

“Grapefruit Seed Extract If you want a little extra daily protection GSE is a safe antibiotic . . . [Amazon associate link].”

  • Musthavemom.com:  “NATURAL REMEDIES FOR CORONAVIRUS. . .There are plenty of things you can do to boost your immune system and fight off any virus including coronavirus. Here are a few!”  … “2. Vitamin D . . . This important vitamin plays a crucial role in immune health. Being deficient in Vitamin D can increase your risk of infection. I recommend this brand of Vitamin D [Amazon associates link] and starting at a minimum dose of 5,000 IU.” [from your website https://musthavemom.com/coronavirus-prevention-treatment-plan/]
  • Careful Cents LLC:  “How to Boost Your Immune System Naturally With Essential Oils to Fight Coronavirus” you state: “Can you use essential oils to boost your immune system and fight coronavirus? Yes! Essential oils are one of the best tools to strengthen your immune system naturally . . .”

The letters state that the products are unapproved new drugs and misbranded pursuant to the Food Drug and Cosmetic Act.  Causing the introduction or delivery for introduction of these products into interstate commerce is prohibited under sections 301(a) and (d) of the FD&C Act, 21 U.S.C. § 331(a) and (d).  The letters also state that “it is unlawful under the FTC Act, 15 U.S.C. 41 et seq., to advertise that a product can prevent, treat, or cure human disease unless you possess competent and reliable scientific evidence, including, when appropriate, well-controlled human clinical studies, substantiating that the claims are true at the time they are made.  For COVID-19, no such study is currently known to exist for the product identified above.  Thus, any coronavirus-related prevention or treatment claims regarding such product are not supported by competent and reliable scientific evidence.”

What’s the lesson?  The difference between these letters and the warning letters that FDA and the FTC issued earlier this year is that these are targeted not to the company making the product or even the retail platform on which they are sold.  They were sent to the middleman marketer, who likely does not produce or possess the product, but who is promoting and profiting from its sale.  This is consistent with the FTC’s letters to product influencers in other marketing contexts but is a departure from FDA’s typical enforcement approach.  Although we have seen FDA pursue retailers (particularly online ones), FDA has not made pursuit of marketing affiliates a priority.  Clearly, regulators want affiliate marketers (Amazon or otherwise) to understand that they are not immune from enforcement if they are making aggressive or unsubstantiated health claims.

Ad Law Access Podcast

 

Today, the FTC issued warning letters to three companies selling CBD products.  The companies, which FTC did not identify publicly, allegedly illegally advertised CBD products as being able to treat or cure serious diseases and health conditions without competent and reliable scientific evidence to support such claims. As we have written about previously, FTC and the FDA issued similar joint warning letters to three other CBD sellers earlier this year.

According to the FTC’s press release, the companies claimed their products could cure serious diseases such as cancer, alzheimer’s, fibromyalgia, and multiple sclerosis.  At least one company’s website, however, took it a step further by claiming “CBD ‘works like magic’ to relieve ‘even the most agonizing pain’ better than prescription opioid painkillers” and “the company . . . has participated in ‘thousands of hours of research’ with Harvard researchers.”

The letters directed the recipient companies to review all claims, including testimonials, to ensure they are supported by competent and reliable scientific evidence.  As readers of this blog likely know, advertisers are required to substantiate all objectively provable claims and cannot use testimonials as a means to make claims that they cannot otherwise substantiate. Given that cannabis, including hemp, was a controlled substance for decades, there has been limited research conducted to date.  Put another way, although users may have experienced favorable results, this does not excuse the advertiser from properly substantiating their claims.

Get a quick update on enforcement and related CBD issues in our webinar, Wednesday, September 11, at 12:30 pm Eastern.  Here is a link to the registration page.

The FDA and FTC jointly issued warning letters to three companies selling CBD products online. The letters allege violations of the Federal Food, Drug, and Cosmetic Act (“FDCA”) and the Federal Trade Commission Act (“FTCA”). Although this is the first time the FDA and FTC have issued joint warning letters relating to CBD, the FDA has been involved in CBD enforcement for the past few years.

Since the passing of the 2018 Farm Bill, which descheduled hemp and hemp derivatives under the federal Controlled Substances Act, the FDA has become the primary federal regulator relative to foods, drugs, cosmetics, and dietary supplements that contain CBD from hemp. The FDA’s most visible enforcement on CBD products to date has been in the form of warning letters issued to online retailers of products labeled as dietary supplements that feature aggressive disease treatment claims. The FDA also tested CBD products in conjunction with warning letters issued in 2015 and 2016 to determine whether they contained the CBD levels listed on the labels.

In the letters from last week, the FDA turned its focus onto various CBD products marketed online as “drugs,” including “CBD Salve,” “CBD Oil,” “CBD for Dogs,” “Hemp Oil,” “CBD Softgels,” “Liquid Gold Gummies (Sweet Mix),” “Liquid Gold Gummies (Sour Mix),” and “blue CBD Crystals Isolate 1500mg.” The FDA determined that the companies’ websites contained claims about their CBD products that established them as unapproved “drugs” under section 201(g)(1) of the FDCA. The letters also referenced the FTC’s substantiation standard, stating the FTC had concerns that certain efficacy claims that were made may not be substantiated by competent and reliable scientific evidence. They also warned that violations of the FTCA may result in legal action seeking a Federal District Court injunction or Administrative Cease and Desist Order, possibly including a requirement to pay back money to consumers.

As noted above, these letters are unique, as it is the first time the FDA has issued a joint FDA/FTC warning letter relating to CBD. This is also the first time the FDA has referenced the FTC’s substantiation standard or threaten any specific penalty for violations of the FTCA. For companies marketing CBD, it is important to keep in mind that although the market has flourished despite a host of regulatory uncertainties, it is the regulators’ opinion that the rules regarding advertising and health claims are clear. Competent and reliable scientific evidence remains the standard.

Over the last few years, however, the FTC’s health claim enforcement has featured several false cure-type products. Cases against Regenerative Medical Group, Cellmark, iV Bars, and Nobetes challenged unproven representations for products promising to treat Parkinson’s disease, macular degeneration, cancer, multiple sclerosis, and diabetes. Although we have yet to see the FTC announce any settlements relating to CBD products, these letters signal that FDA is not alone in its concern over aggressive CBD treatment claims.

The warning letters can be found here:

Welcome toRemove term: CBD and Hemp Legal and Regulatory Roundup CBD and Hemp Legal and Regulatory Roundup our weekly roundup of CBD and hemp-related legal and regulatory news:

CBD

FDA/FTC letters target CBD products with ‘misleading’ COVID claims

The FDA and FTC issued a record seven warning letters in one day to companies making CBD, the largest federal action against the industry in over a year. The letters targeted companies making COVID-related claims, and mark the first warnings issued since multiple scientific studies showed CBD, cannabinoid acids and even synthetic cannabis compounds may prevent or treat COVID-19 infections. The companies were given 48 hours to scrub their websites and social media posts of product listings that “misleadingly represent them as safe and/or effective for the treatment or prevention of COVID-19.” Companies that don’t comply could face product seizures or even criminal charges.

Hemp Industry Daily

Judge dismisses all We CBD arguments against CBP

U.S. District Judge Frank D. Whitney said the six causes of action We CBD brought against the U.S. Customs and Border Protection under both tort and constitutional theories fail. Furthermore, the judge agreed with CBP that his court lacks jurisdiction over We CBD’s tort claims because they are jurisdictionally barred under the Federal Tort Claims Act’s detention of goods exception. Law 360 (sub. req.)

Hemp

Mich. regulators propose rules to allow conversion of hemp harvests into synthetic marijuana products

As the Michigan Marijuana Regulatory Agency proposes allowing hemp farmers to convert their harvests into synthetic marijuana products, cannabis retailers, growers and processors in the state’s regulated adult-use and medical marijuana sectors are pushing back against the draft rules. They claim the rules would saturate the market and further depress crop prices, especially if out-of-state growers sell their hemp in the Mich. market. They also argue such a proliferation of synthetic marijuana alongside typical cannabis products found in retail stores would confuse consumers. Meanwhile, the MMRA Director Andrew Brisbo says the regulations are necessary to provide oversight over what’s currently a gray or even illegal market for synthetic marijuana. MiBiz

Hemp demand plummets in Ore. following oversupply

With heightened scrutiny of their industry, legitimate hemp farmers, like Mason Walker, CEO and co-owner of East Fork Cultivars, are concerned about the future of hemp in Ore. Furthermore, the increased supply of the plant over the last couple of years has had a negative effect on the price farmers can demand for hemp on the agricultural commodities market. While hemp can be used for several commercial applications, it’s primarily being grown in Ore. to produce CBD extract. Regulatory uncertainty surrounding CBD has only made matters worse, adds Paul Murdoch, CEO of Horn Creek Hemp. OPB

Colo. hemp growing pains causes many farmers to go out of business

According to Abdel Berrada, a hemp researcher with Mesa Verde Ag Solutions, hemp growing in Colo. crashed from 85,000 acres in 2019 to 10,000 in 2020. The hemp boom in the state turned to bust for many reasons, he notes, including inexperienced farmers hoping for a quick profit, a steep learning curve, a high supply that drove down the price and insufficient processing infrastructure. Other challenges include having no access to large industrial processing facilities in the state and the DEA authorizing a minimal number of testing labs, adds Berrada. The Durango Herald

Cannabis

Ariz. regulators face third lawsuit over adult-use marijuana social equity licensing

The latest suit requests a delay for a scheduled Apr. 8 lottery to determine the winners of 26 social equity marijuana retail permits. The plaintiffs allege the Ariz. health department has not fully vetted the roughly 1,500 applicants for the social equity lottery to confirm they’re eligible under state law. If the lottery isn’t delayed for fuller vetting, the suit claims, the state might be forced to revoke some of the 26 licenses it plans to award after the Apr. 8 drawing. The three plaintiffs all work with a company called Brachium Prime. The two other lawsuits that were filed with a focus on the social equity licenses include one by the Greater Phoenix Urban League and Acre 41 (dismissed in Feb.) and another by Black Seed (pending). MJ Biz Daily

Ga. regulator escapes suit over low-THC cannabis oil program

U.S. District Judge Steven D. Grimberg threw out a lawsuit accusing the Georgia Access to Medical Cannabis Commission of botching the application process for the state’s low-THC cannabis oil program, saying Georgia Atlas and its Ill. affiliate have no standing because marijuana remains a Schedule I substance under federal law. The plaintiffs filed the lawsuit in Aug., alleging the regulator gave improper consideration to residency criteria and altered its definition of “minority” applicants to exclude women, resulting in a fundamentally flawed and discriminatory process. However, Judge Grimberg found that even if the process “was plagued with unfairness and rife with error,” it wouldn’t erase the fact that cannabis remains federally illegal. As a result, Georgia Atlas and Illinois Atlas can have no federally protected property interest in obtaining a license to cultivate or distribute cannabis, he said. Law 360 (sub.req.)

Tenth Circ. should dismiss lower court ruling on IRS cannabis company summonses

The IRS is not permitted “to use civil authority to enforce criminal law,” according to the brief Standing Akimbo filed with the Tenth Circuit, which urged the appeals court to reverse a lower court decision permitting the summonses. “This court has only allowed the IRS drug crime investigations for ‘civil tax purposes’ only [and] has not legitimized such investigations for purposes of enforcing the Controlled Substances Act,” the cannabis company said. A Colo. federal court found Standing Akimbo’s arguments for blocking the IRS’ enforcement of the summonses were unconvincing because the appeals court had allowed the agency to proceed with identical summonses for Standing Akimbo’s tax information that involved a different tax period. The dispensary unsuccessfully sought review of that decision before the U.S. Supreme Court. The IRS issued the summonses to enforce Internal Revenue Code Section 280E’s bar on tax deductions for marijuana businesses and others that violate the CSA. Law 360 (sub.req.)

Welcome toRemove term: CBD and Hemp Legal and Regulatory Roundup CBD and Hemp Legal and Regulatory Roundup our weekly roundup of CBD and hemp-related legal and regulatory news:

CBD

Calif.-based CBD retailer, manufacturer denied Rule 11 sanctions against wellness company

U.S. Magistrate Judge William Matthewman found Medterra CBD and Rejuvenol Laboratories didn’t meet their “very high burden” of establishing Rule 11 sanctions against Healthcare Resources Management Group were warranted. Judge Matthewman noted Rule 11 is meant to deter baseless filings, however, just because the record evidence failed to establish a triable issue against Medterra and Rejuvenol, that isn’t sufficient to make specific findings of Rule 11 bad faith conduct. Law 360 (sub. req.)

Hemp

Va. bill places hemp stores, farmers at risk of losing business

A bill heading to Gov. Glenn Youngkin’s (R) desk could criminalize the use and distribution of CBD products and potentially hurt hemp farmers, if passed. The Virginia Hemp Coalition is urging Youngkin to amend SB 591 to avoid thousands of Va. businesses from crashing. Advocates said the bill contradicts federal law, which currently allows hemp products to be sold with 0.3% Delta 9 THC. The bill was introduced by Sen. Emmett Hanger (R), who grew concerned upon learning of kids being hospitalized in Va. after accidental ingestion of cannabis. Marijuana Moment

Minn. regulator clarifies trace amounts of Delta-9 in hemp is not marijuana

Hemp industry advocates applauded a decision by the Minn. Board of Pharmacy saying trace amounts of Delta-9 found in hemp products don’t violate the CSA. The conclusion addresses an issue raised by a Minn. Court of Appeals decision in Sept. State and federal law determine hemp is legal so long as it contains less than 0.3% Delta-9. However, the appeals court upended that definition and said the distinction between marijuana and hemp stops at the plant. Star Tribune.

N.Y. opens online applications for cannabis licensing to hemp farmers

Gov. Kathy Hochul (D) opened applications for hemp farmers looking to obtain a license to grow adult-use cannabis in the state through the state’s Seeding Opportunity Initiative. The initiative, she said, “will create meaningful opportunities for economic empowerment for New York farmers and impacted communities.” The application portal advances what Hochul is calling the first-in-the-nation program intended to jumpstart the cannabis industry, allowing those with cannabis-related offences to be able to sell products grown in N.Y. WHAM.

Atlanta law firm seeks court order declaring chemical related to intoxicating ingredient in marijuana is legal

Pate, Johnson & Church filed the suit in response to DA Patsy Austin-Gatson’s statement that the possession, sale or distribution of Delta-8 is illegal under state law. The suit claims the DA interpreted “hemp” and “hemp products” incorrectly under state law. In addition to a declaration that Delta-8 and Delta-10 products are legal, the firm is seeking a court order prohibiting Austin-Gatson and the state from prosecuting business owners for selling them. Fox 5 Atlanta.

Cannabis

Most regulation of hemp in Mich. will transfer to Cannabis Regulatory Agency

The Michigan Department of Agriculture and Rural Development (MDARD) currently regulates hemp, however, effective Apr. 13, responsibility for hemp regulation will turn over to the Marijuana Regulatory Agency, which becomes the Cannabis Regulatory Agency. Authority over hemp processors and handlers, under the Industrial Hemp Research and Development Act, will shift to the new CRA as well, but MDARD will continue to oversee hemp cultivation. The Daily Reporter.

Pa. hospital faces discrimination lawsuit for cancelled job offer over medical marijuana use

Kayla Rivera filed a lawsuit against St. Luke’s Physician Group, alleging violations of the Americans with Disabilities Act and Pa.’s Medical Marijuana Act. Rivera’s complaint notes that she suffers from PTSD and anxiety disorders and she was certified by a medical physician to use medical marijuana in the evenings so she wouldn’t be impaired during the daytime. Rivera was offered employment at the center as a receptionist, contingent upon a drug test and medical examination. She received a positive test for marijuana, and the next day, she provided a St. Luke’s substance abuse coordinator with a copy of her medical marijuana card. When Rivera inquired a few days later about starting her employment, she received a letter notifying her that the employment offer had been withdrawn. Law 360 (sub. req.)

Federal transportation agency proposes new marijuana testing method

Current DOT policy mandates urine testing for marijuana, which advocates and experts view as problematic because THC metabolites can appear in a person’s urine for weeks or months after consumption, resulting in false positive results for people who are not actually impaired on the job. The practice of forcing workers to urinate in a collection jar is also viewed as a potentially invasive procedure. In a notice, the department is recommends testing of oral saliva be added as an alternate option. According to the DOT, THC is generally detectable in saliva anywhere from one to 24 hours after use. Marijuana Moment

Ill. obtains court order to award 60 additional craft cannabis growing licenses

Sangamon County Judge Gail Noll lifted the injunction that held up awarding the licenses until litigation was settled, allowing the state cannabis regulator to award 60 additional craft cannabis growing licenses. The Ill. Department of Agriculture issued a statement that it’s evaluating the ruling “to determine the best way to move forward as quickly and efficiently as possible while maintaining our commitment to a fair and equitable licensing process.” Craft growers see the decision as a major victory for applicants trying to get started in the business. Chicago Tribune (sub. req.)

Welcome to our weekly roundup of CBD and hemp-related legal and regulatory news:

CBD

Iowa Court of Appeals upholds state’s view of CBD as controlled substance

The Iowa Appeals Court sided with the Marion Civil Service Commission, saying Sarah Hyatt was appropriately terminated from her job as a dispatcher at the Marion Police Department for possessing and consuming CBD tincture oil at work, sleeping while on break and being untruthful during a subsequent investigation into her actions. “Under the Iowa Code in force at the time of these events, the CBD tincture oil was a controlled substance,” the court stated, citing a subsection that stated any mixture containing “any quantity of” THC qualified as a controlled substance. The opinion noted that state statute had since been amended to exempt products with less than 0.3% THC. After her termination in 2019, Hyatt appealed to both the commission and a state district court. Both held that her firing was warranted.  Law 360 (sub. req.)

Hemp

Ky. Hemp Association argues for Delta-8 THC products

The Ky. Department of Agriculture said because Delta-8 THC products aren’t legal at the state or federal level, and they’re considered a Schedule 1 controlled substance, shops were raided and employees are potentially facing drug trafficking charges. A spokesperson said Delta-8 THC products can be made with battery acid and pool chemicals, are making people sick and have traces of harmful chemicals and metals. However, the Ky. Hemp Association argues Delta-8 THC products are natural and fall into the legal category for hemp. “We have over 100 other compounds. There’s CBG, CBN, Delta-10, Delta-8. There’s all these other compounds,” said Katie Moyer. While they know there’s some gray area in the legal dispute, the association is asking for raids to cease until the issues surrounding Delta-8 are clarified. WKYT
Related:
Delta-8 rising in popularity in Lincoln, providing a legal alternative to marijuana – News 6 On Your Side
A new wave of hemp-derived Delta-8 THC products – EIN Presswire
As N.C. debates medical marijuana, people are getting high on hemp – it’s legal (sort of) – Tech Wire

FDA enforcement activity helps marketers know risks, compliance issues with CBD/Hemp

According to Asa Waldstein, a dietary supplements executive focusing on bridging the compliance, marketing and regulatory gap between the supplement and hemp industries, as well as the chair of the American Herbal Products Association’s Cannabis Committee, CBD and hemp companies must pay heed to basics such as FDA food facility registration, common allergen label disclosure, adverse event reporting requirements and usage warnings. Marketers of CBD and hemp products should also be looking to the dietary supplement industry for guidance on how to effectively market products without attracting FDA, FTC or plaintiff attorney attention. There have only been around 50 CBD-related warning letters, but there have been hundreds of dietary supplement letters, he adds. This helps show “an ongoing window into FDA enforcement activity and helps a savvy marketer know the risk and compliance guardrails,” Waldstein concludes.  Natural Product Insider

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Welcome to our weekly roundup of CBD and hemp-related legal and regulatory news:

CBD

Just Brands loses bid to pause false ad suit over amount of CBD in products

U.S. District Judge Otis D. Wright II dismissed a proposed class action alleging Just Brands and other CBD companies overstate the amount of the popular cannabinoid in their products, but gave the consumer another chance to pursue the matter. He also rejected Just Brands’ motion to stay the action until the FDA releases CBD regulations, saying any such rules likely wouldn’t affect the claims at issue.

Kushly Industries to pay over $30K to resolve FTC charges it deceptively marketed CBD products

Kushly Industries and its sole officer, Cody Alt, agreed to settle FTC allegations they marketed their CBD products using false or unsubstantiated claims that they could effectively treat or cure serious diseases or common ailments. The respondents were also accused of falsely telling consumers that scientific studies or research support their claims. Under the proposed administrative order, the respondents agreed not to make false or unsupported claims or falsely claim that scientific evidence exists to back up such claims. They will also pay the FTC roughly $30,583 in consumer redress.

Vermont hemp producers, processors look beyond CBD to industrial hemp

Following the 2019 crash of the Vermont CBD industry, due to oversupply, many Vermont hemp growers and processors are trying to find their niche in the CBD market, but some are branching out into industrial hemp. And, some are discovering their experiences growing hemp translate well in Vermont’s legal cannabis industry.

Senate bill aims to allow CBD-infused foods, drinks, dietary supplements

A Senate bill seeks to finalize a process to allow derivatives such as CBD to be used in consumable products like foods, drinks and dietary supplements. The Hemp Access and Consumer Safety Act would exempt “hemp, hemp-derived cannabidiol, or a substance containing any other ingredient derived from hemp” from certain restrictions that have blocked the emergence of legal consumable hemp products while the FDA has slow-walked regulations. The bill also says federal officials may “establish labeling and packaging requirements” for hemp-derived products. The bill is supported by the Consumer Brands Association, Wine and Spirits Wholesalers of America, Hemp Roundtable, American Herbal Products Association, Oregon Farm Bureau, Vote Hemp and National Industrial Hemp Council.

 

Hemp

Alaska hemp bill passes, awaits governor’s signature

The Alaska Legislature passed a bill that would establish a permanent industrial hemp program for the state and allow for interstate commerce of Alaska-grown and manufactured hemp products. The measure would replace a state pilot hemp program set up in 2018. The proposed law awaits the signature of Gov. Mike Dunleavy.

Hemp production starts in S.D. with 15 licenses granted

Twelve growers received hemp licenses in S.D. as the crop returns to the Great Plains state this year, according to the Department of Agriculture and Natural Resources (DANR). An additional three licenses for hemp processing have been granted to date, the state agency said. The farming licenses awarded so far cover about 300 acres. The DANR said additional licenses are expected to be approved over the next month as farmers see the potential for hemp production.

Hemp industry says rise in delta-8 THC was a market response to a delay in FDA guidance

States are setting up bans and restricting sales in reaction to a growing market for delta-8 THC and other synthetic isomers of CBD, but according to hemp industry advocates, the problem might have been avoided if federal drug regulators hadn’t delayed CBD regulations and enforcement for so long. Stakeholders say the FDA’s inaction to provide guidance and regulations for hemp-derived CBD created a bottleneck in the marketplace, making large consumer packaged goods manufacturers and big-box retailers wary of entering the CBD space. Hemp businesses responded by exploiting mixed messages in federal law to use the glut of hemp and CBD distillate and isolate that resulted from artificial demand, giving rise to synthetic minor cannabinoids such as delta-8 and delta-10 THC. Some are concerned that if delta-8 THC is banned, product manufacturers will pivot to creating other isomers, which regulators will ultimately also prohibit, and the cycle will continue until regulators get frustrated and institute bans on all converted minor cannabinoids such as CBN, a product of degraded THC.

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Welcome to our weekly roundup of CBD and hemp-related legal and regulatory news:

CBD

FTC Approves Final Administrative Consent Orders against Sellers of Deceptively Marketed CBD Products

Following a public comment period, the Federal Trade Commission has approved final administrative consent orders against six companies selling cannabidiol (CBD) products nationwide.

In December 2020, the Commission announced its first law enforcement crackdown on deceptive claims in the growing 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. In the sweep, the FTC filed complaints against: 1) Bionatrol Health, LLC; 2) Epichouse LLC (First Class Herbalist CBD); 3) CBD Meds, Inc.; 4) HempmeCBD; 5) Reef Industries, Inc.; and 6) Steves Distributing, LLC. A description of the FTC’s specific allegations against each company can be found in the press release announcing the crackdown. FTC

Hemp

Advocates urge D.C. judge not to dismiss suit to block DEA from regulating hemp crops

Hemp industry advocates urged a D.C. federal judge to not dismiss their suit seeking to block the DEA from regulating the crops, arguing their suit is distinct from a pending case they filed in an appellate court. The Hemp Industries Association (HIA) and S.C.-based CBD company RE Botanicals pushed back against the DEA’s argument that their suit seeks relief from an interim final rule holding cannabis byproducts in excess of 0.3% THC are controlled substances. The plaintiffs say the 2018 Fa`rm Bill is the focus of their challenge. In their complaint, the HIA and RE Botanicals said the DEA’s rule “threatens every stage of the hemp production supply chain” and claimed the agency was flouting the 2018 Farm Bill, which legalized hemp.  Kelo Land

Opinion: Indigenous tribes reviving hemp economies

The potential exists for Native people to benefit economically in the hemp industry, according to Winona LaDuke, executive director of Honor the Earth, a national Native environmental organization. Though tribes have been reluctant to get into the hemp and cannabis industry, she writes, particularly under the Trump era, there’s a growing interest among Native people in a New Green Revolution. Last year, the Fort Berthold Reservation, Colorado River tribes, Iowa Tribe (Kansas and Nebraska), Yurok, Sisseton and Santee Dakotas, to name a few, got their hemp plans approved by the USDA, but more than that, tribal growers and thinkers are considering hemp as part of the future for Indian Country. If hemp’s potential is realized, she argues, they can transform the materials economy. Tribes are in a unique position amid relaxed laws around CBD and hemp production LaDuke writes. Tribal sovereignty provides their governments’ leeway in the development of cannabis policies and will be a stabilizing force in turbulent times. Today, confusing regulations and lucrative growth in the cannabis industry set a complex scene, but tribal nations are in a position to continue a course they set.  Civil Eats

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