United States: Advertising Watchdog Refers CBD Health Claims To The FTC

The National Advertising Division of the Better Business Bureau ("NAD"), the investigative unit of the advertising industry's system of self-regulation, recently referred to the Federal Trade Commission ("FTC") advertising claims made by Grade A Nutraceuticals for its CannaPure CBD Oil dietary supplement, after the company failed to respond to NAD's requests to provide substantiation for its claims.

Council for Responsible Nutrition ("CRN") brought an NAD action and challenged Grade A Nutraceuticals' advertising claims about its CannaPure CBD Oil dietary supplement, such as, "Clinically Validated: Experience the medically proven therapeutic benefits of hemp"; "CannaPure CBD Oil helps with relieving all forms of chronic pain by inhibiting neural transmissions in pain pathways"; "67% Increase in Cognitive Performance & Health"; and "Fighting cancer cells."

According to NAD, the company also advertised a testimonial by actor Morgan Freeman, who in a late-night television program interview, allegedly stated that CannaPure CBD is a "special oil" that has helped him "live a normal healthy life" after a near-fatal car crash in 2008 left him with extensive nerve damage in his hand.

In light of the company's "failure to provide a response to NAD's request for substantiation for the challenged claims or participate in any way in the self-regulatory process," NAD referred the matter to the FTC for possible enforcement action.

Takeaway: As we have previously blogged here and here, advertisers should be aware that their failure to participate in an NAD action or comply with a self-regulatory decision by NAD may lead the case to be referred to the FTC for enforcement action. In particular, CBD companies making unsubstantiated health or therapeutic benefit claims about their products should make all efforts to meaningfully comply, as they have been subject to a string of recent warning letters and enforcement actions by the FTC and FDA.

This article is presented for informational purposes only and is not intended to constitute legal advice.