FTC Files Enforcement Action Against CBD Company Making COVID-19 Claims

FTC recently filed an enforcement action against Whole Leaf Organics over claims its that CBD products treat cancer and prevent/reduce the risk of COVID-19…

The U.S. Food and Drug Administration (FDA) isn’t the only regulator policing the health claims made by cannabis companies. The Federal Trade Commission (FTC) recently filed an enforcement action against Whole Leaf Organics over claims its cannabidiol (CBD) products treat cancer and prevent/reduce the risk of COVID-19.

“There’s no proof that any product will prevent or treat COVID-19 or that any CBD product will treat cancer,” FTC Bureau of Consumer Protection Director Andrew Smith said in a press statement. “Let’s be clear: companies making these claims can look forward to an FTC lawsuit like this one.”

FTC Enforcement Action Against CBD Company

Under the Federal Trade Commission Act (FTC Act), it is illegal to advertise that a product can prevent, treat, or cure human disease unless you possess competent and reliable scientific evidence, including, when appropriate, well-controlled human clinical studies, substantiating that the claims are true at the time they are made. The FTC has sent dozens of warning letters to companies making unsupported claims related to COVID-19. However, its suit against Whole Leaf Organics is its first COVID-19-related enforcement action.

The FTC enforcement action involves multiple supplements sold and marketed by Whole Leaf Organics. In its complaint, the FTC alleges that defendant Marc Ching, also doing business as Whole Leaf Organics, made false and unsubstantiated claims that its Thrive product treats, prevents or reduces the risk of COVID-19. In addition, the FTC challenges the Whole Leaf Organic’s cancer treatment claims for CBD-EX, CBD-RX, and CBD-Max.

According to the FTC, Whole Leaf Organic has sold Thrive — a tablet consisting primarily of Vitamin C and herbal extracts — since 2018. Beginning in March 2020, the company changed how it marketed the product, claiming it could prevent and treat the coronavirus. According to the FTC, Whole Leaf Organic’s website made the following claim: “Formulated with potent antiviral herbal extracts, Thrive by Whole Leaf Organics is the perfect way to strengthen your immunity against pathogens like ‘COVID-19,’ the coronavirus.” The company also represented that the product is indicated to “combat” a list of ailments, “as well as the coronavirus.”

The FTC also alleges that Whole Leaf Organic made false health claims regarding its CBD products, CBD-EX, capsules containing CBD and herbal extracts, and CBD-RX and CBD-MAX, oils consisting primarily of CBD and hemp extract. According to the FTC, Whole Leaf Organic’s false claims included the following statement, among others: “The most effective innovation in cancer and immune related proactive supplement support in the past ten years. CBD-EX combines the best in cancer fighting elements, into one simple capsule.”

In addition to filing an administrative complaint, the FTC sought a court order permanently halting the allegedly deceptive advertising for Thrive, CBD-EX, CBD-RX, and CBD-Max. Ching ultimately agreed to the order, while the enforcement action is ongoing.

FDA Enforcement Actions

Since last year, the FDA has been sending warning letters to companies marketing CBD products in interstate commerce, alleging that product claims violate the Federal Food, Drug, and Cosmetic Act (FD&C Act). As detailed in greater detail in prior articles, the FDA treats products containing cannabis or cannabis-derived compounds like CBD the same way as other FDA-regulated products. 

Under the FD&C Act, any product intended to have a therapeutic or medical use, and any product (other than food) that is intended to affect the structure or function of the body of humans or animals, is a drug subject to the FDA approval process.  The FDA has also concluded “based on available evidence that CBD products are excluded from the dietary supplement definitions” outlined by the Act. Accordingly, the FDA has issued warning letters to food, beverage, and supplement companies using CBD in products sold in interstate commerce where the marketing or labeling of the products incorporate statements that the CBD content results in beneficial health effects. 

In November 2019, the FDA sent a warning letter to Whole Leaf Organic, alleging that it was making unapproved new drug claims in violation of the FD&C Act. The alleged violations included claims that CBD-EX, CBD-RX, and CBD-Max products are “effective when combating cancer cells …. It has been able to kill cancer cells, as well as prevent additional cells from growing.” The FDA gave Whole Leaf Organics 15 days to take corrective action. However, as set forth in the FTC complaint, it continued to make similar representations.

Key Takeaway

While the FDA has been policing CBD claims for some time, it rarely files lawsuits. The FTC’s enforcement action is a notable departure from that trend. The suit also demonstrates that regulators will likely be more aggressive with respect to claims related to the COVID-19 pandemic. Before making any claims about the therapeutic value of your CBD products, it is imperative to consult with an experienced cannabis attorney who understands how to navigate the complex and rapidly evolving regulatory landscape.

If you have questions, please contact us

If you have any questions or if you would like to discuss the matter further, please contact me, Dan McKillop, or the Scarinci Hollenbeck attorney with whom you work, at 201-896-4100.