The Food and Drug Administration (FDA) recently issued numerous warning letters to a variety of domestic and foreign based companies regarding improper claims about the effectiveness of certain products in preventing or treating COVID-19 (Coronavirus). Along with businesses touting unapproved homeopathic or holistic coronavirus treatments, the FDA has specifically targeted multiple hemp and CBD manufacturers and retailers. The FDA warnings claim that the companies’ marketing materials misleadingly represent their CBD products as safe and/or effective for the treatment or prevention of COVID-19.
What kinds of CBD claims are impermissible?
While North Carolina and federal law allows for the regulated growth, processing, transport, and sale of hemp and CBD products, the Food and Drug Administration maintains certain enforcement authority under the Federal Food Drug and Cosmetic Act. While regulation has proven difficult with the explosion of the hemp and CBD industry, the FDA has consistently targeted violators making unapproved medical and health benefit claims.
Currently, under current FDA policy, the addition of CBD to food and dietary supplement products is not permissible and enforcement action may be taken against violators. Moreover, the FDA’s regulation includes helping to eliminate any unsubstantiated claims regarding hemp and CBD products’ ability to prevent, treat, or cure certain diseases or ailments. Along with traditional diseases, these claims likewise may not be made about symptoms related to depression, anxiety, general aches and pains, or other physical or mental health cures.
Can I be charged with fraud for making CBD health claims?
The most recent series of FDA warnings likely stem from federal focus into the investigation and prosecution of coronavirus-related schemes. On March 20, 2020, U.S. Attorney General William Barr directed all U.S. Attorneys to prioritize the investigation and prosecution of coronavirus-related fraud, particularly for individuals and businesses selling fake cures for COVID-19 online.
To the extent that the FDA is already focused on unsubstantiated medical claims from hemp and CBD companies, if a company were to make COVID-specific health statements, they risk drawing additional scrutiny from federal agencies that are tasked with eliminating coronavirus-related fraud. Claims can be brought by members of the public by filing a claim through the National Center for Disaster Fraud (NCDF). The NCDF database can be accessed by all US Attorneys across the county as well as 16 additional federal law enforcement agencies plus all state Attorneys General and local authorities to identify, investigate, and prosecute fraud schemes. If prosecutors determine that an individual or company has made unproven claims or otherwise committed fraud about a product’s effectiveness in treating or curing coronavirus, criminal charges including the possibility of a prison sentence could be brought.
Hemp and CBD companies would be wise to work with experienced legal counsel who can help craft marketing materials to help avoid FDA enforcement action. Consider getting a legal consultation with experienced attorneys who know the way FDA enforcers are applying the law before posting claims on your website or hitting send on that next monthly newsletter.
More importantly, because federal prosecutors are currently targeting fraudulent operations that are exploiting the coronavirus pandemic, hemp manufacturers and retailers should be especially mindful to avoid any claims related to non-FDA approved coronavirus treatment that could be perceived by law enforcement and prosecutors as perpetuating an illegal fraud scheme.
Experienced Legal Council, Available To You 24/7
Contact the attorneys at Dysart Willis Houchin & Hubbard to discuss how our firm can help guide your business before it faces regulatory or enforcement action.