Cannabis Health Claims Face Increased Scrutiny As More States Roll Out Recreational Dispensaries

As the number of adult-use states continues to grow—with New York, New Jersey, Connecticut, Rhode Island, and Vermont recently joining the ranks—the scrutiny of cannabis-related advertising has grown with it.  In recent years, state and federal regulators have made it clear that cannabis claims are a priority, especially claims stating or implying a health benefit.  Most of the attention to date has been on CBD products and claims, but as THC products hit the shelves in more and more states, expect the focus to expand to include all cannabis related products.

Who is doing the scrutinizing?  Presently, there are no fewer than four interested parties, each with the ability to take legal action against the advertiser.

The first—and, so far, the most dedicated of the bunch – is the Food and Drug Administration.  Since 2015, it has issued dozens of warning letters to parties advertising CBD products.  The warning letters assert that because the challenged products are marketed as curing, mitigating, treating, or preventing disease, they are “drugs” under the Food, Drug and Cosmetic Act, and thus subject to FDA approval.  Needless to say, the CBD gummies (or tinctures, vapes, topicals, or pills) at issue are not FDA approved.  The specific claims at issue in those letters run the gamut, but many are quite explicit in stating a health benefit from use of CBD—everything from reducing reliance on opioids in pain treatment to helping adults and children who experience PTSD.  Those kinds of claims are high risk and of particular interest to the FDA.

The FDA is not the only federal regulator in the mix.  In December 2020, the Federal Trade Commission conducted a self-described law enforcement sweep—Operation CBDeceit—in which it targeted claims similar to those targeted by the FDA.  The claims scrutinized by the FTC were those suggesting or stating that a particular CBD product could treat serious medical conditions like cancer, autism, depression, PTSD, or multiple sclerosis.  The FTC’s position is that CBD marketers must have methodologically sound human clinical testing before making disease related claims.  And they must have “competent and reliable” scientific evidence to support other health-related claims.

State cannabis regulators and attorneys general are also likely paying attention to cannabis advertising, especially as it relates to enforcement of state regulations.  Most adult-use states have a fairly lengthy set of regulations concerning cannabis sales, including provisions governing advertising and marketing.  Those advertising provisions generally prohibit health claims or claims that use of cannabis has curative or therapeutic effects.   In New York, health claims are not only prohibited, but they are defined quite broadly (thereby capturing a great deal of potential commercial speech in the web).  They include “any claim … that expressly or by implication … characterizes the relationship of any cannabis product to a disease or health-related condition or symptom.”  The inclusion of “symptoms,” in particular, opens the door to challenging “softer” claims – for example, a claim that a particular flower strain “reduces stress” or that a topical can “relieve pain.”  Advertisers should keep that in mind as they consider potential health-related claims.

Last but not least, there are an increasing number of class action lawyers taking notice.  To date, a significant number of those involve allegations that the product label overstates the amount of THC or CBD in the product, thereby causing consumers to pay more.  But health claims pose a similar class action threat.  The more attention they receive from federal and state regulators, the more likely we will see class actions alleging that consumers paid more because of health claims that it turned out were false.

The message here is clear: If you are advertising cannabis products, you should assume that the government is paying attention.  The FDA and FTC are likely to remain focused on CBD claims, while state regulators step into the fray, newly authorized to enforce regulations governing cannabis advertising.  Time will tell how actively state regulators enforce the regulations, but the pieces are in place for fairly broad regulation.

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