There is a fine line to walk in the CBD industry, between marketing the potential health benefits of a product and overselling it with disingenuous claims. Many companies make honest efforts to accurately promote the effects and uses of their products, using reliable scientific evidence to support any health-related claims they make—companies like Mary’s Medicinals, Leaf Remedys and Colorado Botanicals.
Then there are companies that are taking advantage of the new and largely unregulated nature of the industry. They use words like “proven” and “cure” and claim that their products are an outright antidote to cancer, heart disease, hypertension, Alzheimer’s disease, bipolar disorder, chronic pain, acne, COVID-19 and more. These companies know they’re making claims that aren’t backed up by science. Even if it’s an objectively good product, the advertising is disingenuous. They’re scamming people. And in some cases, they’re even selling products that don’t have any CBD in them at all, or worse, products that contain dangerous contaminants (see Weed Between the Lines, “Gray market problems,” Aug. 11, 2022).
That’s why, in December of 2020, the Federal Trade Commission (FTC) launched “Operation CBDeciet’’ in an effort to send a message to the Wild West CBD industry. The FTC identified six cannabis companies, making “deceptive” claims about their products, proposing settlements with each business—five of which required financial remedy, and all of which required respondents to have “methodologically sound human clinical testing before they can make a wide variety of disease-related claims in the future.”
The FTC recently flagged a seventh business, prompting an unprecedented and unexpected action from the feds: customer reimbursement.
The six companies originally identified in Operation CBDeciet were Utah-based Bionatrol Health LLC and Epichouse LLC, California-based CBD Meds Inc. and Reef Industries, Boca Raton-based HempmeCBD, and Colorado-based Steve’s Distributing LLC. According to the FTC, many of these companies made inaccurate claims; that their products were effective alternatives to prescription medications and/or were effective at treating diseases like multiple sclerosis, amyotrophic lateral sclerosis (ALS), osteoporosis, Alzheimer’s disease, Parkinson’s disease, and cancer.
Reef Industries’ ads claimed, “CBD hemp oil has a huge range of potential health benefits and uses, including . . . fighting cancer, . . . eliminating depression, [and] preventing inflammatory arthritis.” Another ad contended, “If you or someone you love suffers from diabetes, try using CBD oil to treat it. Not only is it safer than the most common diabetes medications, but it’s also more effective.”’
HempmeCBD made up its own fake study (or at least dramatically twisted and inflated existing conclusions), claiming, “[I]n a recent study, Israeli research has shown an 80% success rate in reducing problematic behavior in children with Autism using CBD.”
CBD Meds Inc. went a step further, not only making a study up, but claiming that the research was done by the “United States Federal Government” itself. The fake federal study allegedly found, “CBD may make chemotherapy more effective and increase cancer cell death without harming normal cells.”
The seventh and most recent target is Arizona-based Kushly and its owner Cody Alt. It’s not technically part of Operation CBDeciet, but it is being similarly challenged for its misleading advertising. The biggest difference with this most recent case is that the FTC is actually reimbursing 576 customers who bought Kushly’s products under the false pretense that it could cure their acne, psoriasis, cancer, multiple sclerosis and other health ailments.
The FTC is sending a total of $21,000 to duped customers—equating to roughly $36 per person.
“This is the seventh case we’ve brought against CBD sellers who should know better than to make unsupported health claims for their products,” said Daniel Kaufman, acting director of the FTC’s Bureau of Consumer Protection, in a press release. “There may be some benefits of CBD, but there’s no proof that it can treat the serious health conditions in Kushly’s advertising, such as Parkinson’s, multiple sclerosis or cancer.”
Kaufman’s right on both accounts: CBD isn’t a cure-all for neurodegenerative diseases, or an antidote to cancer, but it can help reduce anxiety, help treat sleeplessness, help control pain and inflammation, and it can help lower cravings for addictive substances. There is scientific research to back all of those effects up, according to Harvard Medical School.
Operation CBDeciet and the subsequent case of Kushly won’t just take a few falsely advertised products off the shelves. These actions send a message to all CBD producers and businesses out there: The FTC means business. It isn’t going to allow people to continue making snake-oil sales of CBD just because the industry is in its infancy. According to Vantage Market Research, the CBD industry is projected to be worth $47.22 billion by 2028. That’s serious money. Which will undoubtedly elicit more serious regulation as the industry matures and proliferates.