Marketing CBD products is a challenge. For years we’ve written about risks associated with making health-related claims in marketing. But there’s another avenue that the federal government doesn’t like: unsubstantiated claims. Last week, the Federal Trade Commission (FTC) decided to ratchet up enforcement and sent out warning letters to nearly 700 companies (some of which offer CBD products) concerning their alleged unsubstantiated claims.
FTC’s template warning letter, styled “Notices of Penalty Offenses,” is here. The letter notes that it includes the FTC’s Notice of Penalty Offenses Concerning Substantiation of Product Claims (or “Substantiation Notice“) and Notice of Penalty Offenses Concerning Deceptive or Unfair Conduct around Endorsements and Testimonials (or “Endorsement Notice“). It also notes that receipt of a notice of penalty offenses can lead to civil penalties of up to $50,120 per violation. Under federal law, in some cases each day of continuing activity could be construed as a separate violation.
The FTC’s various notices address a host of potential issues, which we may dig into in detail in subsequent posts. For today, there are two general buckets of concerns: unsubstantiated claims and issues around endorsements (I’ve written about FTC endorsement issues on a few occasions, see here for example).
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