CBD Sellers Beware: FTC Issues Warnings on CBD Marketing Practices

By Ryan Coufal

On September 10th, 2019 the Federal Trade Commission (“FTC”) sent warning letters to three companies that sell oils, tinctures, capsules, “gummies,” and creams which contain cannabidiol (“CBD”), a chemical compound derived from the cannabis plant.  While the FTC did not identify the companies publicly, the letters warn that it is illegal to advertise a product that can prevent, treat, or cure human disease without reliable scientific evidence to support such claims. 

The companies’ websites claim that CBD products “’work like magic’ to relieve ‘even the most agonizing pain,’” are a “miracle pain remedy,” and are highly effective at treating “the root cause of most major degenerative diseases.”  The websites then promote that CBD treats a whole host of diseases including: cancer, Alzheimer’s disease, multiple sclerosis (MS), fibromyalgia, cigarette addiction, colitis, autism, anorexia, bipolar disorder, post-traumatic stress disorder, schizophrenia, anxiety, depression, Lou Gehrig’s Disease (ALS), stroke, Parkinson’s disease, epilepsy, brain injuries, diabetes, Crohn’s disease, psoriasis, AIDS, arthritis, and heart disease, with one of the websites even stating the treatment is “clinically proven.” 

In its letters the FTC instructs the companies to review all claims made about their products, including consumer testimonials, to ensure such claims are supported by competent and reliable scientific evidence.  Making such unsubstantiated claims can be in direct violation of sections of the FTC Act, 15 U.S.C. §§ 45(a) and 52, which regulate advertising.  Additionally, such claims can violate the Federal Food, Drug, and Cosmetic Act (FDCA), 21 U.S.C. § 321(g)(1)(B) which is regulate by the U.S. Food and Drug Administration (FDA).  On March 28, 2019 the FTC and FDA jointly sent similar warnings to three different CBD companies about their marketing practices, with the FDA taking the stance that such marketing practices are evidence that CBD products are intended to be used as drugs, which require extensive testing and FDA approval before marketing the products in such a manner.  Making a claim that CBD is a drug that can cure disease when it has not been approved by the FDA could create the potential for violation of the FDCA.

The FTC gave the latest three companies fifteen (15) days to notify the agency of the specific actions they have taken to correct the agency’s concerns.  Companies that sell CBD products should take note of the marketing practices the FTC and FDA are regulating and review all claims made about their CBD products and ensure they are backed by reliable and competent scientific evidence, and ensure they are not marketing CBD products as drugs under the FDCA.

© 2019 Vandenack Weaver LLC
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IRS Warns Taxpayers About Recent Phone Scam

The Internal Revenue Service (“IRS”) recently warned taxpayers that an aggressive phone scam that targets taxpayers, often senior citizens, is making rounds throughout the country and costing taxpayers millions of dollars and their personal information. The callers are con artists who claim to be IRS employees. The caller tells the victim taxpayer that the taxpayer owes money to the IRS and threatens the taxpayer with legal action if he or she refuses to pay. The caller often demands immediate payment with a prepaid debit card, gift card, or wire transfer.

The callers often alter caller IDs to make it look like the IRS is the true caller, know information about their victims, use fake names and IRS identification badge numbers, and leave urgent callback requests. Similarly, callers may tell taxpayers they have a refund due, in an attempt to trick taxpayers into sharing private information.

The IRS reminded taxpayers the IRS will never do any of the following:

• call to demand immediate payment using a specific payment method,
• threaten to immediately bring legal action against a taxpayer who refuses to pay,
• demand that a taxpayer pay taxes without providing the taxpayer the opportunity to question or appeal the amount the IRS claims the taxpayer owes,
• ask for credit or debit card numbers over the phone.

he IRS also reminded taxpayers it will work with private collection agencies for the collection of certain tax debts this year. However, the IRS reported that if a private agency calls, there will not be any threats or immediate payment demands and the call will typically occur only after the agency has mailed the taxpayer a notification about the debt.
The IRS urges taxpayers to protect their personal information at all times and to report scam calls to the IRS, the Federal Trade Commission, or the Treasury Inspector General for Tax Administration.

© 2017 Vandenack Weaver LLC
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Annual HSR Act Threshold Increases Announced

By M. Tom Langan, II

The Federal Trade Commission recently announced its annual increases to the Hart-Scott Rodino Act filing thresholds.  The new numbers went into effect on February 25, 2016.  Under the new thresholds, acquisitions of $78.2 million or less are not reportable.  Transactions above this amount may be reportable depending on other conditions.

For the complete set of numbers, please see Revised Jurisdictional Thresholds.

© 2016 Vandenack Williams LLC
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