Earlier this fall, Target got itself into some hot water by selling CBD products online. The internet was
abuzz. Likewise, the hemp industry was cheering too, but within a week of making CBD products available on their website, Target pulled them from their virtual shelves for fear of violating federal law. Now, just a month after the original hubbub, the manufacturer of those products, CW Hemp, has received a warning letter from the FDA to take actions to correct any violations of the Federal Food, Drug, and Cosmetic Act (the Act). Worse yet, because the DEA interprets the Federal Controlled Substances Act (CSA) to include CBD oil as a Schedule I narcotic (depending on the source of extraction), CW Hemp may have violated the CSA as well, by selling their products in interstate commerce.
The warning letter details the FDA reasoning that CW Hemp has misrepresented their products as drugs under section 201(g)(1) of the Act and violated the act by introducing their products into interstate commerce. The warning letter goes on to state that CW Hemp is misrepresenting their CBD products as dietary supplements, as they do not meet the requirements for dietary supplements under the Act (section 201(ff)(3)(B)(ii)). Furthermore, the warning letter uses examples, including recommended doses and customer anecdotes, from several of CW Hemp’s websites and social media pages to show that the company intended to represent their CBD products as drugs.
The warning letter claims that CW Hemp’s web presence is attempting to establish that their products “are intended for the use in the diagnosis, cure, mitigation, treatment, or prevention of disease” which is unlawful under the Act. Because the FDA does not recognize CW Hemp’s products as “safe and effective for the above referenced uses,” it is classified as a “new drug” (section 201(p)) which may not be introduced into interstate commerce without FDA approval.
The warning letter further alleges misbranding based on inadequately providing directions for use, stating that the illnesses that CW Hemp intends their products to treat “are not amenable to self-diagnosis or treatment… [and that] it’s impossible to write adequate directions for a layperson to use [CW Hemp’s products] safely for their intended purposes.” Introducing misbranded drugs into interstate commerce violates section 301(a) of the Act.
clearly understands the risks associated with misrepresenting their products, and has contended, at least up to this point, that CBD extracts are not blocked as dietary supplements by the FDA; a point that the FDA counters specifically in the warning letter. CW Hemp may not have known to what extent they were mislabeling their products or making unapproved claims, in the eyes of the FDA, until receiving the warning letter. The FDA is giving CW Hemp the opportunity to rectify the violations alluded to in the warning letter.
It should be noted that other CBD manufacturers have received similar warning letters from the FDA. With the bigger picture in mind, this could mean that companies working with CBD in state sanctioned regulated markets have another inconsistency with federal law to deal with. Additionally, it may mean that the federal government has found another tool in their toolbox to come after lawful cannabis businesses. The takeaways here: you might expect a knock on your door from the FDA if you sell CBD products in interstate commerce, call your products a drug or dietary supplement, recommend dosage, represent your products as a panacea for a myriad of illnesses, or market your products by detailing their effectiveness at dealing with health issues.
As the cannabis industry makes efforts to be treated like any other business, this is a sad reminder that sometimes it pays to exist under the radar. There is likely no coincidence that CW Hemp’s FDA warning letter came just a month after Target made national news for selling their products.
*The information in this article is provided for general informational purposes only, and may not reflect the current law in your jurisdiction. No information contained in this post should be construed as legal advice from Greenspoon Marder, P.A., In New York, Greenspoon Marder, P.A. practices under the name Greenspoon Marder, P.A. P.C. In California, Greenspoon Marder LLP practices using the fictitious name and trademark Greenspoon Marder under license from Greenspoon Marder, P.A., or the individual author(s), nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through, this Post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country or other appropriate licensing jurisdiction.
About Greenspoon Marder
Greenspoon Marder is a national full-service business law firm with 240 attorneys and 26 locations across the United States. We are ranked amongst
American Lawyer’s Am Law 200, as one of the top law firms in the U.S. since 2015. Since our inception in 1981, our firm has been committed to providing excellent client service through our cross-disciplinary, client-team approach. Our mission is to understand the challenges that our clients face, build collaborative relationships, and craft creative solutions designed and executed with long-term strategic goals in mind. We serve Fortune 500, middle-market public and private companies, start-ups, emerging businesses, individuals and entrepreneurs nationwide.
Natalie Villanueva, Director of Marketing
954.333.4308 | email@example.com
This Greenspoon Marder LLP Client Alert is issued for informational purposes only and is not intended to be construed or used as general legal advice nor a solicitation of any type. Please contact the author(s) or your Greenspoon Marder LLP contact if you have any questions regarding the currency of this information. The hiring of a lawyer is an important decision. Before you decide, ask for written information about the lawyer’s legal qualifications and experience.