New Class Action Filings and FDA Warnings Highlight Increased Regulatory and Litigation Risk for CBD Products – Lexology

On November 22, 2019, the Food and Drug Administration (FDA) issued warning letters to 15 companies for introducing misbranded and adulterated products containing cannabidiol (CBD) into interstate commerce, in violation of the Federal Food, Drug, and Cosmetic (FD&C) Act. The warning letters were accompanied by publication of a revised Consumer Update detailing specific safety concerns associated with CBD products. The Consumer Update and warning letters provide guidance on the agency’s approach to foods and dietary supplements that contain CBD, including products that purportedly make drug marketing claims. While FDA continues to develop its regulatory approach with respect to CBD products, its enforcement actions have given rise to several class action lawsuits across the country against CBD manufacturers, based in part on the lack of FDA approval for these products.

FDA plans to provide an update on its progress regarding its approach to CBD products in the coming weeks – an action that may offer some further clarity to the regulatory landscape regarding cannabis-based products. In the meantime, the Agency continues to place specific emphasis and focus on products that are marketed toward “vulnerable populations like infants and children” (see, e.g., October 22, 2019 press release).

Continued Focus on Drug Claims

The most recent round of warning letters covers a variety of products, including oils, lotions, moisturizers, lip balms, gummies, beverages, and pet foods that contain marketing claims that either mention – or directly state – that they address the management of disease.

As in prior warning letters, the FDA cautioned against attaching drug marketing claims to any CBD product. The agency highlighted the kinds of statements that may trigger classification as an unapproved new drug, including those that directly tout CBD’s disease treatment capabilities (e.g., offering CBD’s potential to treat Alzheimer’s, cancer, diabetes, depression, and anxiety) to those that showcase CBD’s therapeutic benefits (e.g., touting the anti-inflammatory effects of CBD, its use for pain relief, etc.).

This regulatory action further builds upon warning letters issued by FDA in April 2019 in consultation with Federal Trade Commission (FTC) for products that contain unsubstantiated drug advertising claims, in violation of the FTC Act.

CBD Is Not Generally Recognized as Safe for Use in Food

With regard to the addition of CBD to foods, FDA has historically relied on Section 301(ll) of the FD&C Act to conclude that the introduction of CBD-derived ingredients into foods delivered/introduced into interstate commerce is a prohibited act. Under this provision, the FDA has found that foods to which CBD has been added without premarket approval are unlawful because CBD is an active ingredient in an approved drug (Epidiolex®) that was subject to substantial clinical investigations that were made public.

In some of the warning letters published last month, however, the FDA took its analysis a step further, finding that CBD’s use in/addition to foods violates the FD&C Act for reasons that are independent of its status as a drug ingredient – effectively precluding food manufacturers from self-affirming that the addition of CBD to food is generally recognized as safe (GRAS), thereby exempting CBD from the need for premarket approval by FDA.

Specifically, the warning letters provide:

There is no food additive regulation which authorizes CBD . . . . Furthermore, we are not aware of any basis to conclude that CBD is GRAS for use in conventional foods . . . . We know of no basis for general recognition of safety for CBD based either on scientific procedures or common use in food prior to January 1, 1958. Based on our review of published, scientific literature, existing data and information do not provide an adequate basis to conclude that the use of CBD in food meets the criteria for GRAS status. Many unanswered questions and data gaps about CBD toxicity exist, and some of the available data raise serious concerns about potential harm from CBD. Our review of publicly available data associated with the one FDA-approved CBD drug, as well as our review of published scientific literature, identified potential for liver injury from CBD and potentially harmful interactions with certain drugs. In addition, studies in animals have shown that CBD can interfere with the development and function of testes and sperm, decrease testosterone levels, and impair sexual behavior in males. Therefore, based on our review, the use of CBD in your product does not satisfy the criteria for GRAS status . . . . CBD is not approved for use in any conventional food.

The practical effect of FDA’s most recent round of warning letters with respect to food is that companies that wish to market products containing CBD as a food ingredient must first (in addition to addressing the status of CBD as a potential active drug ingredient) obtain premarket approval from FDA – typically by submitting a Food Additive Petition (FAP) or, in the case of a component of packaging or a food-contact material, by way of a Food Contact Notification (FCN). Both submissions will likely require the development of extensive data demonstrating the absence of potential drug effects in the body when present in food or food packaging at low levels (but may potentially further preclude the marketing of CBD in a way that adds perceived value to the consumer of the food or packaging).

Plaintiffs’ Attorneys Leveraging Warning Letters as Basis for Class Actions

While FDA and FTC enforcement activity related to retailers of products containing CBD to-date has largely been limited to warning letters, plaintiffs’ attorneys are actively seeking more aggressive action against manufacturers and distributors of products containing CBD – particularly those that have recently been targeted by Agency warning letters.

Specifically, several independent class action lawsuits were recently filed in the Central and Northern Districts of California against CBD product manufacturers, including Infinite Product Company llc (Infinite CBD) – one of the 15 companies that recently received a warning letter from FDA.

The class actions were brought by plaintiffs’ attorneys on behalf of consumers who purchased the defendants’ products – including CBD oils, capsules, and gummies, despite the fact that the defendants purportedly knew that the products were misbranded and adulterated conventional foods or dietary supplements under the FD&C Act.

The civil complaints allege violations of both state and federal law, including The False Advertising Law, Cal. Bus. & Prof. Code §§ 17500, et seq.; The Consumers Legal Remedies Act, Cal. Civ. Code §§ 1750, et seq.; The Federal Food, Drug, and Cosmetic Act, 21 U.S.C. §§ 301, et seq.; and The California Sherman Food, Drug, and Cosmetic Law, Cal. Health & Safety Code §§ 110100, et seq. The complaints seek broad relief, including:

  • an order awarding the class members their actual damages, treble damages, and/or any other form of monetary relief provided by law;
  • a declaration that Defendants are financially responsible for notifying all Class members of the problems with the Products;
  • a declaration that Defendants must disgorge, for the benefit of the Class, all or part of the ill-gotten profits received from the sale of the Products, or order Defendants to make full restitution to the Class.

These recent California class actions are part of a growing trend. Earlier class actions were filed this year regarding CBD product labeling in other states, including Florida, Illinois, Massachusetts, and Michigan. Given the explosive growth of CBD’s use in cosmetics, drinks, and dietary supplements, and the lack of federal standards for these products, it is likely that such class action activity will continue to increase.



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