FTC Sends Warning Letters to CBD Companies Advertising Treatments for Serious Diseases

FTC Sends Warning Letters to CBD Companies Advertising Treatments for Serious Diseases

The FTC announced today that it sent letters to multiple companies that sell CBD products, waring them that claims they made regarding CBD violate federal law.  These “warning letters” state 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 and that the companies were in violation of that law based on claims made in connection with CBD. The letters give the companies 15 days to respond to the FTC, detailing what remedial action was taken, and threaten that the FTC would seek injunctive relief, including asset freezes, should the companies fail to comply.

We previously warned that federal enforcement actions could be coming this fall, and now it looks like those actions will be here sooner rather than later. The FTC is tasked with protecting consumers from deceptive business practices, and it appears to have taken the position that it is deceptive to make medical claims about CBD. We anticipate that more warning letters, and perhaps enforcement actions with no warning letter, will follow. For CBD sellers, this means now is the time to make sure you’re compliant.

At Kennyhertz Perry, we have defended multiple companies from FTC enforcement actions. The FTC has powers beyond what most people understand—it can seize your property and freeze all of your assets through a temporary restraining order before you even learn there is a case filed against you. We believe that an ounce of prevention is worth a pound of cure, and that far the best course of action is to avoid such actions in the first place. We understand the complexities of federal and state CBD regulations and can bring your business into compliance.

About Kennyhertz Perry’s CBD Regulatory Practice Group

Kennyhertz Perry advises clients on a wide range of CBD compliance and regulatory matters.  Kennyhertz Perry has broad experience assisting clients with business formation and compliance in highly-regulated industries.

Kennyhertz Perry partner Braden Perry spent time as a Senior Trial Attorney with the Commodity Futures Trading Commission and is well equipped to assist with the banking and other financial issues related to the CBD industry. He has defended multiple FTC enforcement actions involving allegedly deceptive claims and asset freezes.

Kennyhertz Perry partner John Kennyhertz is former in-house counsel at a private equity firm and has structured transactions for very small and very large clients alike. He has substantial experience in highly-regulated industries such as online lending, and industries with rapidly-evolving regulations, such as cryptocurrency. He provides CBD operational and compliance counseling and offers advice on appropriate modifications of transaction structure and documentation. John has also defended multiple companies from FTC enforcement actions.

Kennyhertz Perry attorney Ben Tompkins is a former federal prosecutor in Los Angeles as well as serving as tax enforcement counsel for the U.S. Department of Justice. He is well equipped to provide advice regarding the rapidly-evolving tax landscape in the CBD industry. In addition, he has defended multiple FTC enforcement actions involving allegedly deceptive claims and asset freezes.

Kennyhertz Perry attorney Arthur Chaykin is a former law school professor and head of litigation at Sprint. He is an expert on intellectual property law and devises creative solutions to protect client’s IP in the CBD industry, even when certain federal protections are unavailable.

Kennyhertz Perry attorney Jeff Donoho is an expert in small business formation and government compliance. His knowledge of the labyrinthine CBD regulatory landscape helps him provide detailed guidance to clients.

Kennyhertz Perry attorney Mit Winter is a former partner at at AmLaw 100 law firm.  An expert litigator, his skill in anticipating issues before they become serious problems is valuable to all clients, and particularly those in the CBD industry.

Kennyhertz Perry attorney Jon Dedon has advised numerous clients in Kansas and Missouri specifically on state and federal CBD regulatory compliance matters. He understands the current state of federal and state regulations and makes it his job is to stay on top of the latest developments in this rapidly-evolving area. In addition, Jon has defended multiple FTC enforcement actions involving deceptive claims and asset freezes.

Clients also benefit from Kennyhertz Perry’s experience in related areas of law, such as litigation, banking, securities, tax, intellectual property, employment, insurance, and its regular practice before the Missouri administrative agencies and courts. CBD clients choose Kennyhertz Perry because the firm’s lawyers tailor their advice to the unique issues presented by each matter they handle.

To learn more about Kennyhertz Perry, LLC, please visit kennyhertzperry.com.

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