CBD Coronavirus Scams Spark FDA Scrutiny

As if COVID-19 weren’t already dangerous enough, fraudsters are currently thriving as they take full advantage of the fear caused by the pandemic.  Sadly, but not surprisingly, the pandemic has led to a surge of coronavirus-related scams by bad actors seeking to profit off the panic.

Phishing messages, fake CDC and WHO emails, counterfeit surgical masks, fake treatments and cures, price gouging—you name it.  But the list of coronavirus scammers also includes at least four CBD retailers that have allegedly marketed claims online that their products prevent, treat, or cure COVID-19. 

Over the last two weeks, the U.S. Food and Drug Administration (FDA) and Federal Trade Commission (FTC) have sent warning letters to four CBD retailers that have touted their cannabidiol products as effective against coronavirus.  The warning letters ordered that these companies immediately take corrective action by removing all misleading statements from their websites within 48 hours, or else face legal action, including monetary penalties, seizures, and injunctions.

The first of these letters was sent on March 31, 2020, when the FDA and the FTC issued a joint warning to an ex-NFL player’s company Neuro XPF for advertising online that its CBD products can “Crush Corona!” and will “prepare your body to fight a coronavirus infection.”  The company’s website also stated: “there’s something you can do right now to strengthen your immune system. Take CBD . . . CBD can help keep your immune system at the stop [sic] of its game.”

The following week, the FDA and FTC issued joint letters to three other CBD sellers—Indigo Naturals, Native Roots Hemp, and CBD Online Store—ordering them to stop making claims that their products prevent or treat COVID-19.  According to the agencies, Indigo Naturals misleadingly claimed that CBD is an “antiviral agent” for coronavirus, influenza, MERS, and SARS, and that CBD promotes “high-end immune response” and boosts T-cells with “powerful weapons” that may prevent or treat COVID-19.  Likewise, Native Roots Hemp allegedly claimed on its website that CBD “speeds up recovery” from coronavirus and that cannabis resin is an “antiviral” that “inhibits cell proliferation.”  CBD Online Store, the last of the CBD retailers to receive a warning letter, allegedly claimed on its website that CBD has powerful anti-inflammatory effects that may decrease lung inflammation caused by COVID-19.

The letters ordered the companies to immediately cease and desist from making such claims, and informed them that they are selling misbranded and unapproved new drugs in violation of sections 502 and 505(a) the Federal Food, Drug and Cosmetic Act (FD&C Act), 21 U.S.C. §§ 352, 355(a).  The letters further advised the companies that the introduction of such misbranded and unapproved drugs into interstate commerce is prohibited under sections 301(a) and (d) of the FD&C Act, 21 U.S.C. § 331(a) and (d), and that their claims regarding CBD’s ability to prevent, treat, or cure COVID-19 were unsupported by competent and reliable scientific evidence, in violation of the Federal Trade Commission Act (FTC Act), 15 U.S.C. § 41 et seq.

Although the coronavirus pandemic is unprecedented, the legal principles at issue here are nothing new, and in fact are all too common in the CBD marketplace.  Indeed, the statutory violations committed by the four CBD retailers discussed above are the very same violations of the FD&C Act and FTC Act that many other CBD retailers have committed (and have received warning letters for committing) over the last five years.  Since 2015, the FDA has sent numerous warning letters to CBD companies for making unsubstantiated claims about therapeutic and health-related benefits of CBD.  In March 2019, the FTC joined the FDA in sending warning letters to companies advertising and selling CBD products with claims that such products may treat various diseases, including Alzheimer’s, cancer, fibromyalgia, and “neuropsychiatric disorders.”  

The recent letters, however, are part of a larger effort by law enforcement officials to shut down scammers seeking to profit during the coronavirus pandemic.  Last month, as the pandemic began to unfold, Attorney General William Barr sent a memo to federal prosecutors directing them “to prioritize the detection, investigation and prosecution of all criminal conduct related to the current pandemic,” particularly “individuals and businesses selling fake cures for COVID-19 online.”  CBD retailers touting that their products can cure COVID-19 appears to fall squarely within this prioritized enforcement category.

To avoid receiving warning letters or facing legal action from the FDA and/or FTC, it is absolutely imperative not only that CBD companies are aware of what marketing claims they can and cannot make, but also that they consult with competent attorneys who can review their marketing and labeling materials to help them ensure full compliance with applicable laws and regulations.  This is especially true today as the federal laws and policies surrounding hemp and CBD are evolving and are in a constant state of flux.

Disclaimer: This article has been prepared and published for informational and educational purposes only and is not offered or intended, nor should it be construed, to be legal advice.

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