The Bottom Line
- Consumer protection regulators are taking the COVID-19 crisis very seriously.
- The FTC and FDA have both stepped up enforcement actions against companies making unsubstantiated claims that CBD products may help combat the disease.
- The FDA has issued numerous emergency warning letters that require recipients to take corrective action within 48 hours, rather than the standard 15 days.
Numerous unscrupulous retailers are seizing on the COVID-19 crisis — and the public health fear that the overall population is experiencing — to make some wild and unsubstantiated claims about how CBD products can help cure or ward-off the novel coronavirus.
Both the Federal Trade Commission (FTC) and Food and Drug Administration (FDA) are stepping up enforcement actions in response.
Marc Ching, doing business as Whole Leaf Organics, has been selling Thrive, a dietary supplement principally composed of Vitamin C and various herbal extracts. With the onset of the COVID-19 pandemic, Thrive’s marketing and advertising materials began including coronavirus-targeted claims, such as: “Formulated with potent antiviral herbal extracts, Thrive by Whole Leaf Organics is the perfect way to strengthen your immunity against pathogens like ‘COVID-19,’ the coronavirus.” Moreover, Whole Leaf Organics represented that the product can “combat” a list of ailments, “as well as the coronavirus.”
While the FTC sent a warning to Whole Leaf Organics due to these claims, this was not Whole Leaf Organics’ first warning.
The FDA had notified the company in November 2019 regarding their CBD products and associated claims, asserting that the company was making unapproved new drug claims in violation of applicable law. Despite the FDA’s notice giving the company 15 days to take corrective action, Whole Leaf Organics continued to make the claims in question.
Now that the company is making COVID-19 claims, the FTC has dramatically increased the speed and severity of its regulatory response.
The FTC filed concurrent federal district court and administrative complaints, a strategy that demonstrates the urgency of the agency’s response. The FTC moved for a temporary restraining order and preliminary injunction in the federal complaint in an effort to immediately prevent the defendant from continuing any violative action.
Each complaint further alleged that Whole Leaf Organics falsely represents the benefits of Thrive and makes false and unsubstantiated claims that Thrive is clinically proven to treat, prevent or reduce the risk of COVID-19. The complaints also allege that since December 2018, the Whole Leaf Organics website has been used to advertise and sell three CBD-containing products, each of which is accompanied by a variety of claims alleging that the products are effective treatments against various cancers and other associated symptoms.
The parties agreed to a preliminary order on April 28, 2020, which (pending the resolution of the administrative action) bars Ching and Whole Leaf Organics from making any claims that Thrive can prevent or treat COVID-19 and that other CBD products are effective treatments for cancer.
Since the beginning of March, the FDA’s Office of Unapproved Drugs and Labeling Compliance has issued more than three dozen warning letters about products that purport to cure COVID-19. Included in their list of targets are several CBD product retailers that claim CBD can prevent or cure the disease.
For example, the FDA sent warning letters in April to Native Roots Hemp and Nova Botanix (d/b/a CanaBD). Native Roots Hemp, an online CBD retailer, claims that, “Cannabis Indica speeds up recovery from coronavirus,” and one of its social media posts says, “Don’t fear the #CORONAVIRUS! Fight it with us.”
CanaBD makes a variety of far-fetched claims about CBD’s anti-coronavirus qualities, such as, “Especially those of us with autoimmune disease, taking CBD (in various forms) can be especially good during this time,” and “with the global virus, wreaking havoc across the globe, finding relief from an incurable virus is just within reach in the form of CBD oil.”
The FDA’s warning letters to Native Roots Hemp, Nova Botanix and others who made COVID-19-related claims require more aggressive corrective action from the targets than normally seen in such FDA actions. Typically, the FDA requests that a target respond to a warning letter in 15 days, and the agency’s letter prominently gives the target the opportunity to state why it disagrees with the FDA’s assessment.
This is not the case in regards to COVID-19 related claims. The recent warning letters require “immediate action” to correct the violations cited, and a written statement of such actions must be sent within 48 hours. The language allowing the target the opportunity to contest the FDA’s assessment is buried several paragraphs further down in the letter.
The FDA is also publishing a running list of all companies that have received COVID-19-related warning letters. Once a company ceases to distribute the products in question, or takes other corrective action, the company is still not removed from the list. Rather, an asterisk is added to the rightmost column of the online table, connecting to a footnote. So even after complying with the FDA warning letter, the company’s previous misdeeds are still very much on public display.
Non-COVID-19 Oversight Continues
Federal agencies are not shirking their other regulatory responsibilities just because of the COVID-19 crisis. The FDA remains concerned that public interest in CBD products may put consumer safety at risk because of unsubstantiated medical claims. The FDA recently sent a warning letter to BIOTA Biosciences LLC that not only calls into question the claims being advertised, but also questions the delivery method of the ingredient itself.
BIOTA Biosciences offers an injectable form of CBD to customers and claims that it is effective in treating opioid addiction. The FDA noted that, “Injectable drug products can pose a serious risk of harm to users because they are delivered directly into the bloodstream and bypass many of the body’s natural defenses against toxic ingredients, toxins, or dangerous organisms that can lead to serious and life-threatening conditions such as septicemia or sepsis.” Moreover, the company makes other claims for the products that render them unapproved drugs under FDA regulations, and, as a result, misbranded, as the labeling doesn’t bear adequate directions for use.
Because BIOTA Bioscience’s claims are not linked to COVID-19, the agency is allowing it to take the routine 15 days, rather than 48 hours, for it to respond with specific steps it has taken to correct the violations identified in the letter.
Possessing, using, distributing, and/or selling marijuana or marijuana-based products is illegal under federal law, regardless of any state law that may legalize or decriminalize such activity under certain circumstances. Although federal enforcement policy may at times defer to states’ laws and not enforce conflicting federal laws, interested businesses and individuals should be aware that compliance with state law in no way assures compliance with federal law, and there is a risk that conflicting federal laws may be enforced in the future. No legal advice we give is intended to provide any guidance or assistance in violating federal law.