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CBD Warning Letters Lead to Litigation

The cannabis business in the US continues to be the “Wild Wild West” for those operating in this space. As an example, the last few weeks have been hit with a flurry of activity – both regulatory and litigious – focused on CBD in foods. In late November, FDA issued warning letters to 15 companies for illegally selling products containing cannabidiol (CBD) in ways that violate the FD&C Act. In its announcement on the warnings, FDA said the warning were for marketing CBD products in interstate commerce through product webpages, online stores and social media including ways to use them to treat diseases or for other therapeutic uses for humans and/or animals; for marketing CBD products as dietary supplements; and for adding CBD to human and animal foods.


Soon after the issuance of FDA’s announcement, the litigation began – and has continued to grow since. It started with class-action suits against two major CBD companies in California and has hit at least six altogether. As explained in a release from Perkins Cole law firm, lawsuits allege that “CBD-containing products are mislabeled and falsely advertised in violation of state law.” Allegations against at least one of the companies focuses on its illegal marketing of products as dietary supplements, stating that they would not have purchased the products or would not have paid as much “had they known the truth about the mislabeled and falsely advertised products."


But perhaps the most notable statement in FDA’s announcement was that it “cannot conclude that CBD is generally recognized as safe (GRAS) among qualified experts for its use in human or animal food.” It is a statement that is causing quite a stir in the industry, but seems to be a bit disconcerting as, in the same announcement, the agency said it is continuing to “explore potential pathways for various types of CBD products to be lawfully marketed.”


Following all that, FDA issued a consumer update on December 6, noting that while it has approved one cannabis-derived and three cannabis-related drug products, it “has not approved a marketing application for cannabis for the treatment of any disease or condition and thus has not determined that cannabis is safe and effective for any particular disease or condition.”


In the Q&A section of the consumer update, FDA also spelled out its process of approval, noting that it relies on applicants and scientific investigators to conduct research, with the study of cannabis and cannabis-derived compounds in clinical trial settings needed to assess the safety and effectiveness of these substances for the treatment of any disease or condition. With FDA’s role, as laid out in the FD&C Act, being to review data submitted in an application for approval to ensure that the drug product meets the statutory standards for approval, the agency said it will “continue to facilitate the work of companies interested in appropriately bringing safe, effective, and quality products to market.”


But – and it’s a big but – even while working to further clarify its regulatory approach, FDA said it will continue to monitor the marketplace and take action as needed against companies that violate the law in ways that raise public health concerns. This is, at least in part, because there remain concerns that consumers think that the CBD products on the market have been evaluated by FDA and determined to be safe; and questions regarding CBD’s safety – including reports of products containing contaminants, such as pesticides and heavy metals; and data gaps about CBD toxicity, FDA said.


Today one constantly sees advertisements for CBD for sale, and you all know CBD is legal at the state level in almost every state in the US. But, it is not legal in the eyes of FDA. So what does all this mean? The real danger zone is if a company makes claims about CBD that could result in a consumer not seeking medical advice for the treatment or prevention of a disease. But with consumers jumping on the warning letter announcements and filing class action suits, it goes even beyond that. Those who manufacture CBD products – or are considering adding CBD products to their line – need to take a hard look at what they are producing, and navigate the increasingly difficult space of what FDA considers legal and what states consider legal. You need to stay current on FDA regulation, guidance, and announcements, not only to protect from warning letters and recalls but to keep your company out of court as the defendant in a class action suit.


TAG has CBD and hemp experts who can take a look at your products and operations to help ensure you remain in compliance with federal, state, and local regulation. For more information, visit www. https://www.hashTAG.global/.

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