The past week has shown the challenges that the cannabis industry supply chain—manufacturers, processors, distributors and dispensaries—faces, as regulators target claims relating to the health benefits of CBD and media outlets report, without any scientific evidence, that cannabis vaping may be linked to lung illnesses, and, as of the issuing of this Alert, the Trump administration is reported to be poised to ban flavored nicotine vaping. These kinds of issues could spur claims against cannabis industry participants for consumer fraud, personal injury and products liability, and heighten the scrutiny of cannabis products by federal and state regulators.
On September 10, 2019, the Federal Trade Commission announced that it had sent warning letters to three unidentified businesses “that sell oils, tinctures, capsules, ‘gummies,’ and creams” containing hemp-derived CBD, concerning health-related claims about the benefits of their CBD products. Although the FTC did not release the warning letters or identify the recipients, the FTC’s press release announcing the warning letters explained that the letters were issued to reinforce that “it is illegal to advertise that a product can prevent, treat, or cure human disease without competent and reliable scientific evidence to support such claims.”