The Legality of Cannabidiol and Concerns Regarding False Advertising

cannabis oil CBDThe legality of marijuana (also known as cannabis) has been a popular topic in recent years with thirty states and the District of Columbia having laws that legalize marijuana in some form.  However, under federal law, marijuana is a Schedule I drug and remains illegal for all purposes. Schedule I drugs are those for which there currently are no accepted medical uses, and have a high potential for abuse.  Other Schedule I drugs include heroin, LSD and ecstasy.

While the illegality of marijuana is clear at the federal level, even when legalized at the state level for medical and/or recreational use, confusion swirls around substances derived from the cannabis plant.  One such substance is cannabidiol, also known as CBD.  CBD is a cannabinoid without any psychoactive properties.  In other words, a user of a CBD will not feel “high.”  Alleged benefits from the use of CBD, range from curing cancer to relieving anxiety, inflammation, seizures, epilepsy, PTSD and multiple sclerosis.[1]

Legality of CBD

Although many CBD producers advertise that CBD is legal in all 50 states, this remains uncertain as shown by Indiana Governor Eric Holcomb’s warning to retailers that CBD oil must be pulled from shelves.[2]  Additionally, in Indiana the Department of Child Services threatened to remove a 20 month infant from her home after her parents gave her CBD oil to treat her seizures.[3]  And, Indiana is not alone. The Department of State Health Services in Texas is considering a proposal that would require inspectors to detain all food products and cannabis oils that have added cannabidiol.[4]

Under federal law, CBD is not listed separately in the Code of Federal Regulations and is, thus, controlled in Schedule I as a “derivative” or “component” of marijuana (21 USC 802).[5]  And, the DEA has clarified that CBD is considered an illegal substance, just like any other marijuana product. [6]  To this end, on December 14, 2016, the DEA published the Establishment of a New Drug Code for Marihuana Extract (the “Final Rule”), which created a new code number under the Controlled Substance Act for marijuana extract.[7]  The Final Rule made clear that “[e]xtracts of marihuana will continue to be treated as Schedule I controlled substances.”[8]  In response, the Hemp Industries Association has filed a lawsuit against the DEA, challenging the Final Rule.  The case, Hemp Industries Association, et al. v. Drug Enforcement Administration, et al., is currently pending in the Ninth Circuit, Case No. 17-70162.

Regulation under the United States Food & Drug Administration

The FDA has concluded that CBD products are excluded from the definition of dietary supplement.[9]  Additionally, the FDA has found it is prohibited to introduce or deliver for introduction into interstate commerce any food with CBD added because it is a drug for which substantial clinical investigations have been instituted and for which the existence of such investigations has been made public.[10]

Research of Health Benefits of Marijuana and CBD

On its website the FDA asserts that it supports research into medical use of marijuana, and persons can submit applications for approval of research by the FDA and the DEA.[11]

The FDA approved GW Pharmaceuticals PLC’s Investigational New Drug application for Epidiolex for treatment of Dravet Syndrome, a rare form of childhood epilepsy.  Epidiolex would be a prescription cannabidiol medicine.[12]  Additionally, the FDA approved the study of Sativex®, which contains both CBD and THC, for treatment of pain in patients with advanced cancer, who experience inadequate analgesia during optimized chronic opioid therapy.[13]However, because scientific researchers studying cannabidiol must meet federal security requirements and follow federal practices, some scientists have said this has slowed research supporting medicinal benefits of marijuana.[14]

Because of the foregoing, namely minimal research and failure of regulation by a government agency, CBD products may find themselves on the receiving end of false advertising claims.

False Advertising and CBD

On October 31, 2017, the FDA issued warning letters to four companies for advertising unsubstantiated claims that their products containing CBD assist with treating cancer.[15]  Some of the challenged statements include “CBD makes cancer cells commit ‘suicide’ without killing other cells” and “CBDs are effective against MRSA (antibiotic-resistant bacteria).”[16]

In addition to false advertising claims based on the alleged benefits of CBD, there are also potential false advertising claims regarding the amount of CBD in products.  According to a CNN article, only thirty-one percent of products tested contained the precise amount of CBD advertised on the label; twenty-six percent contained less CBD than advertised; and forty-three percent contained more than advertised.[17]  And THC, which has psychoactive properties, was detected in eighteen of the eighty-four samples tested.[18]

What Does This Mean for Producers and Retailers of CBD?

CBD producers and retailers need to understand three key things as they tread in these untested waters.

First, any CBD producer or retailer must understand the laws of the states in which they are selling CBD products.  They should understand and remember that, even in states where marijuana is legal under state law, CBD products, like marijuana, are not approved or legal under federal law.

Second, like any other substance or ingredient, producers should ensure that labeling is accurate and that the products sold contain the amount of CBD advertised.   Moreover, if the product contains THC (the principal psychoactive constituent of cannabis) in addition to CBD, that should be disclosed on the ingredients.

Third, producers and retailers of CBD should insure that they do not sell CBD as a dietary supplement or make claims of benefits that are unsubstantiated.

The area of cannabis is one that is rapidly evolving and developing. We invite you to check back here and visit Cozen O’Connor’s cannabis industry page for updates.[19]








[8] Id.










[18] Id.


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Products Liability Prevention & Defense
Our attorneys represent foreign and domestic designers, manufacturers, and distributors of a diverse array of products, from food and drugs to industrial equipment and building materials. We help clients respond to major personal injury and property damage claims in the form of single-product cases, class actions, mass torts, and multidistrict litigation, as well as all types of congressional, regulatory, or criminal investigations. Our team works closely with corporate counsel to minimize a company’s overall liability and establish efficient protocols for fielding claims and advise on labeling, marketing, manuals and instructions, supply and distribution contracts, and insurance and indemnification issues.
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