On October 22, 2019, the U.S. Food and Drug Administration (“FDA”) and the Federal Trade Commission (“FTC”) issued a public statement regarding a joint warning letter sent to Rooted Apothecary, LLC, a Florida-based company, for unlawfully marketing several of its products containing cannabidiol (“CBD”). The warning letter indicated that Rooted Apothecary, LLC was illegally marketing its CBD products as dietary supplements and drugs in violation of the Federal Food, Drug, and Cosmetic Act (“FDCA”). Furthermore, Rooted Apothecary, LLC made unsubstantiated health and efficacy claims that its products can treat such conditions and diseases as autism, ADHD, Parkinson’s, Alzheimer’s, and cancer amongst others.

Specifically, the FDA stated that the company’s website and social media accounts market its “Hemp Capsules, 750 mg” and “Hemp Oil” products as dietary supplements that contain CBD, when the products do not meet the definition of a dietary supplement under the FDCA.

Furthermore, the FDA concluded that the company’s products (1) Teeth/TMJ – Essential Oil + CBD infusion; and (2) Ears – Essential Oil + CBD Infusion; (3) Hemp Capsules, 750 mg; (4) Hemp Infused Body Butter; and (5) Hemp Oil are “drugs” under the FDCA because they are intended for use in the diagnosis, treatment or prevention of disease and/or intended to affect the structure or function of the body. Moreover, because the drugs are not generally recognized as safe and effective for their aforementioned uses, the products are “new drugs” and may not be legally introduced into interstate commerce without prior FDA approval. Lastly, the FDA determined that the products are misbranded drugs as the product labels fail to provide adequate directions for use by a layperson.

In addition to the warnings from the FDA, the FTC additionally took issue with Rooted Apothecary, LLC’s potentially unsubstantiated health claims. Under the FTC Act, it is unlawful to advertise that a product can prevent, treat, or cure human disease unless the seller has competent and reliable scientific evidence substantiating that the claims are true when made.

Some of the claims with which the FDA and FTC took issue included:

  • “CBD oil may have neuroprotective properties and may protect against neurological conditions, such as Parkinson’s and Alzheimer’s disease.”
  • “CBD oil may improve depression, anxiety, and PTSD.”
  • “[P]ossible uses for CBD include helping with skin problems such as acne, autism, ADHD, and even cancer. It’s often used in conjunction with traditional treatments to provide extra help. Children can use high amounts of CBD safely and without any risk.”
  • “Increasing evidence suggests that CBD oil is a powerful option for pain . . . anxiety . . . and autism . . . It seems like an attractive and safe option for children.”

The company will have 15 working days to respond to the agencies with how they plan to correct the violations. Failure to do so could result in legal action such as product seizure, injunction and an order to repay consumers.

Takeaway:

The warning letter sent to Rooted Apothecary, LLC continues the string of recent enforcement actions taken by the FTC and FDA against CBD companies making unsubstantiated health claims. Although the FDA and FTC have seemingly sent warning letters to companies making only egregious health claims (e.g. curing Alzheimer’s), the warning letters have also indicated that less serious claims (e.g. reducing anxiety and muscle pain) are also unsubstantiated and subject to potential FDA and FTC enforcement. The FDA, in particular, has taken a hard line stance on CBD products marketed for therapeutic or medical uses and indicated that the warning letters “should send a message to the broader market about complying with FDA requirements.”

Accordingly, even though these warning letters are just that – warnings – the public nature of these letters poses reputational risks as well as the risk for more serious enforcement actions for non-compliance with FDA and FTC regulations. The FDA has indicated that it is “working quickly to further clarify [the] regulatory approach for products containing cannabis and cannabis-derived compounds like CBD,” however, until such regulations are codified, companies selling CBD products should avoid making any therapeutic or medical claims related to their products. Companies making these claims risk potentially being the subject of the next warning letter.