FTC a Scrooge on CBD Claims Blog All About Advertising Law – Lexology

The FTC has deemed claims made by CBD marketers to be humbug, announcing on December 17, 2020, a law enforcement crackdown on six companies that sell CBD and make allegedly deceptive and unsubstantiated claims that their products can treat serious health conditions including cancer, heart disease, hypertension, and Alzheimer’s disease. CBD is a naturally occurring substance that comes from the marijuana plant. While the claims brought by the FTC are similar to claims brought against marketers of other products making similar claims, the dueling statements by Commissioners Chopra and Wilson are noteworthy.

The six companies entered into settlement agreements that prohibit these companies from making false claims about their products in the future. Specifically, the proposed orders prevent these companies from prevention, treatment, or safety claims unless they have the human clinical testing to substantiate the claims. Additionally, the orders require the companies to have competent and reliable scientific evidence when making claims on any health-related product, and require the companies to pay the FTC $75,000 each and notify their consumers of the FTC complaint and order.

While the Commission approved all six of the complaints and consent orders 5-0, both Commissioner Wilson and Commissioner Chopra issued separate, concurring statements staking out very different positions.

In her statement, Commissioner Wilson expresses concern that if substantiation requirements for health claims become too burdensome, it could “diminish incentives to conduct research, and could chill manufacturer incentives to introduce new products to the market.” Whether this view has much traction in the next administration should be a concern to the makers of health-related products.

Commissioner Chopra, on the other hand, used his statement to condemn these companies for providing “false hope” to people with serious health conditions and to advance a new policy initiative. Commissioner Chopra states that the FTC must target abuses in the substance use disorder treatment industry using SUPPORT for Patients and Communities Act which gives the FTC the authority to seek civil penalties, restitution damages, and other relief against outfits that engage in misconduct related to substance use disorder treatment. Additionally, Commissioner Chopra states that the FTC should go after larger companies instead of smaller businesses and should use the Penalty Offense Authority to trigger civil penalties to reduce the amount of unlawful health claims. What role Commissioner Chopra will play at the FTC in a Biden administration remains to be seen, but this advocacy is consistent with a string of statements the Commissioner has made urging the FTC to do things differently and use different, sometimes neglected, tools Congress has given it. Whether any of this becomes policy remains to be seen.

Source: https://www.lexology.com/library/detail.aspx?g=bade1a6d-0bcd-4e34-bdb0-51121d286a6e

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