USA: Short leash for companies making health claims on CBD products

A Federal Trade Commission (FTC) carried out its first coercive actions against companies that market CBD products with claims of health benefits, accusing six companies of using misleading advertising. The application forms part of CBDreceit Operation and is aimed at companies that have made unproven claims about their products' ability to treat diseases and medical conditions such as cancer, diabetes or Alzheimer's disease.

During the last few years, the amount of products with CBD in their composition has been increasing, not only in American stores but also all over the world, namely Portugal. As a result, various types of brands and products have emerged with unproven health claims, either on the labels of CBD products or on the websites where they are sold. The FTC's actions are a way to combat this situation and the agency aims to convey a message: the new market is subject to the same laws and enforcement measures as the established market.

Companies targeted by notification for unsubstantiated allegations reach agreement and pay fine

The companies accused by the FTC made deals and paid fines for the false allegations. "The six agreements announced today send a clear message to the growing CBD industry: do not make false health claims that are not supported by medical science," said Andrew Smith, director of the FTC's Office of Consumer Protection, in the press release. December 17 who announced the action. "Otherwise, don't be surprised if you hear from the FTC."

In Portugal it is possible to find health claims on several products with hemp seed oil

Leslie Fair, senior attorney in the office, went further and wrote on an agency blog published that day. “ 'It's the Wild West out there!' How many times have you heard that statement about health claims for products containing CBD? But the problem is this: it's not the Wild West," she wrote. “In fact, health-related claims for CBD-containing products are subject to the same established requirements of scientific substantiation that the FTC has applied for decades to any advertised health claim.”

The six companies – Bionatrol Health, LLC, CBD Meds, Inc., Epichouse LLC, HempmeCBD, Reef Industries Inc. and Steves Distributing, LLC – made health claims without the necessary scientific evidence. Each company made a settlement with the government and was required to end all misleading advertising and notify consumers of the settlement with the FTC. In addition, fines ranging from $20 to $85 were imposed on the five companies.

According to the agency's statement, the targeted companies are also prohibited from making any prevention, treatment or safety claims in the future, unless they have human clinical trials to prove it. Companies must also have “competent and reliable scientific evidence” to support any other types of health claims.

In Portugal there is also misleading advertising, but authorities do not act

In Portugal, health claims (or therapeutic indications) are also being misused, namely in products based on hemp seed oil that are on sale in health food stores and pharmacies and that mislead Portuguese consumers, even because these products do not contain CBD. THE Cannareporter alerted to this issue in May 2019 and, at the time, the OPCM – Portuguese Observatory of Medicinal Cannabis alerted the Directorate General for Consumers and ASAE to this situation, but received no response.