It is crucial for CBD companies to know and adhere to the Federal Trade Commission’s guidelines, also known as the FTC, when marketing and advertising CBD products. Failure to do so will lead to penalties depending on the decision of the FTC. The FTC is the agency responsible for business and consumer protection.
The government announced the FTC’s law enforcement crackdown called Operation CBDeceipt last December 17, 2020. The FTC stated that they were imposing monetary sanctions against six CBD companies for false marketing and advertising claims.
These false health claims include statements saying that the product can allegedly treat serious diseases such as cancer, heart disease, Alzheimer’s disease, and hypertension, to name a few. The federal government considered the first enforcement action against such deceptive claims that lack reliable scientific evidence. This action sends a clear message to those in the CBD industry, particularly cannabis companies and manufacturers. It reminds them to make sure that they follow the guidelines for marketing and advertising CBD products as set by the federal agencies involved. This article will look into these guidelines and regulations regarding marketing and advertising CBD products to better understand them and avoid receiving sanctions, penalties, warning letters, and the likes.
Getting to Know CBD
Cannabidiol (CBD) is one of the most common compounds derived from the cannabis plant, a relative of the marijuana plant, which belongs to the same family or species. However, CBD is not intoxicating, nor is it psychoactive, unlike THC.
Delta-9-tetrahydrocannabinol, also known as THC, is the second most common cannabinoid or compound found in the cannabis plant, which is responsible for “high” due to its use at certain levels. On the other hand, CBD has gained more attention in recent years for its potential health benefits. CBD is known to help alleviate pain, relieve stiffness, and reduce inflammation.
Types of CBD
There are three types of CBD, wherein the differences between them are the compounds they contain. The first is CBD isolate, which contains only CBD and no other component. The second is broad-spectrum CBD that includes other components but does not have THC. Lastly, full-spectrum CBD contains all the other compounds derived from the plant, including THC, at levels less than 0.3%.
Many cannabis companies offer CBD isolate, broad-spectrum CBD, and full-spectrum CBD oil for sale. They also usually have a wide range of products aside from CBD oil, including soft gels, tablets, and topicals like lotion and salves.
Affiliate Marketing through Social Media
It’s when celebrities or influencers refer his/her followers to a brand or website and receive a commission for it. Affiliate links or promotional codes are made for these referrals. CBD sellers usually opt to do affiliate marketing rather than direct advertisements.
Federal Trade Commission (FTC) Guidelines for CBD Products
The Federal Trade Commission is the primary agency responsible for safeguarding consumers and companies alike. Sections 5a and 12 of the FTC Act prohibits “unfair or deceptive acts in or affecting commerce,” including all businesses.
Although the FTC has not released specific guidelines for marketing and advertising CBD products, there are guidelines set by the FTC for the general use of endorsements and testimonials in advertising. The FTC established these guidelines to guarantee that companies utilize marketing strategies according to advertising laws and regulations. The guidelines include detailed situational examples that companies should carefully understand as a reference and avoid being put in such situations.
What to Remember when Advertising CBD products
Adhering to the guidelines set by the FTC and the FDA, the agencies that protect the safety of consumers and companies alike, other factors can be taken into consideration when planning to market and advertise CBD products.
Here are some helpful things to remember:
Avoid False Health Claims
You should remember that you must avoid including false health claims when advertising CBD products if the Food and Drug Administration has not evaluated your product. Including a health-related statement saying that the product prevents, treats, or cures health conditions such as cancer, heart disease, hypertension, and Alzheimer’s disease, will be considered deceptive, especially if there is no scientific evidence to support these claims. Suppose a company markets CBD products that state its prevention, treatment, and cure of serious diseases such as heart disease, cancer, and other safety claims without human clinical testing and reliable scientific evidence, it can subject them to enforcement actions such as monetary sanctions, penalties, or warning letters.
Review social media posts
Make sure to review social media posts by influencers and celebrities before their publication. Another helpful tip is for the contract to contain the specific language you’d like for them to include.
Know the Consumer Review Fairness Act
The Consumer Review Fairness Act (CRFA) protects individuals’ ability to share their opinions about the products, services, and other things related to a business on social media and any platform. It means that they should not include a provision that prohibits or punishes negative reviews. It also means companies are not allowed to penalize an individual who gives a review.
What is the 2018 US Farm Bill, and what does it mean for CBD companies?
CBD products have been legalized at a federal level under the 2018 US Farm Bill, also known as the updated Agriculture Improvement Act of 2018. This bill also states that these hemp products are considered legal as long as the cannabis plant and derivatives contain no more than 0.3% of THC, which removes it from the Controlled Substances Act. The updating of this bill has helped many cannabis companies, allowing them to sell their products across states, following the state-specific regulations.
CBD companies are highly encouraged to educate themselves on the guidelines and regulations set by the FTC and FDA when it comes to marketing and advertising their products. These agencies work together to protect the safety and welfare of consumers and businesses alike. Following these guidelines and regulations can help sellers avoid monetary sanctions and penalties while ensuring that they provide honest service and quality products.