Thursday, April 9, 2020

FTC and FDA Warning Letters Instructive for Cannabis Advertisers

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Richard B. Newmanhttp://www.hinchnewman.com
Richard B. Newman is an Internet Lawyer at Hinch Newman LLP focusing on advertising law, Internet marketing compliance, regulatory defense and digital media matters. His practice involves conducting legal compliance reviews of advertising campaigns across all media channels, regularly representing clients in high-profile investigative proceedings and enforcement actions brought by the Federal Trade Commission and state attorneys general throughout the country, advertising and marketing litigation, advising on email and telemarketing best practice protocol implementation, counseling on eCommerce guidelines and promotional marketing programs, and negotiating and drafting legal agreements.

The Federal Trade Commission and the U.S. Food and Drug Administration recently sent joint warning letters to four companies that manufacture and advertise flavored liquids used in vaping. Despite the fact that the letters focus upon nicotine content, they are more broadly instructive for cannabis advertisers.

Consider that the letters discuss the lack of warnings about addiction and other dangers in conjunction with social media advertising. In fact, the FDA states that the products are misbranded as a result of the failure to include a nicotine warning statement – a federal requirement.

The FTC states that “failure to disclose the presence of and risks associated with nicotine raises concerns that the social media posting could be unfair or likely to mislead consumers.” The FTC also took the opportunity to remind recipients about the FTC Endorsement Guides   (The FTC also includes a reminder that any material connection between the brands and their social media endorsers must be disclosed.)

Advertising products with nicotine on social media clearly requires clear and conspicuous disclosures.

Cannabis advertisers would be wise to pay close attention. Licensed cannabis companies often promote their products on social media in jurisdictions where cannabis sales are lawful. Similar warnings and disclosures are probably a wise idea for advertisers that want to avoid the ire of FTC attorneys, including, without limitation, side effects, the potential for associated health risks, risks of use during pregnancy and breast feeding, the presence of THC, risks to children, etc.

Most likely due to the position of the federal government regarding the legality of cannabis and related advertising, the Federal Trade Commission has been relatively neutral on the subject. However, many believe that FTC attorneys may soon be scrutinizing such digital marketing activities.

In other news, the FDA recently sent a warning letter to a public company informing them that some of its CBD products are unapproved new drugs and, therefore, misbranded. Specifically, the FDA stated that materials on the company’s website and in social media indicate that the company plans to market the products as dietary supplements, despite the fact that the items do not fall under the definition of a dietary supplement.

The FDA demanded immediate corrective action.

The company is the largest CBD producer to receive such a warning letter. Companies making what the FDA believes to be drug claims are engaging in high-risk activity.

Richard B. Newman is an FTC compliance attorneys at Hinch Newman LLP.

Attorney advertising. Informational purposes only. Not legal advice.

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