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Retail Industry Updates

Smart Labeling Practices


It has been more than one year since the Agricultural Improvement Act of 2018 (better known as the 2018 Farm Bill) was enacted removing hemp and hemp-derivatives like CBD from the Controlled Substances Act. And while the U.S. Food and Drug Administration (FDA) has held a public hearing on the use of cannabis, including hemp-derived CBD, in products like food and beverage, the industry anxiously awaits guidance or rules on advertising and labeling (which includes the label and packaging, as well as anything that you say about the product, including any claim that you make on your label, package, website, social media, etc.) for CBD-containing products.  


Add to this lack of guidance, FDA currently takes the position that CBD may not be incorporated into and sold as food or a dietary supplement. A number of states have also specifically prohibited the use of CBD in foods, such as Massachusetts, Washington and North Carolina.  Therefore, any company wishing to include CBD in food or beverages should proceed with caution. On the other hand, a broad spectrum of statutes and regulations exist from other states on the advertising and labeling of CBD-containing foods and beverages, including some states that require any product containing CBD to be packaged in be child-resistant, tamper-evident, and light-resistant containers. Even if you are not selling in a state that requires this type of packaging, it can still be beneficial from a products liability perspective to follow the more stringent packaging regulations.


Proper labeling is an important aspect of putting any ingestible product on the market. Under the FDA’s laws and regulations, the FDA does not pre-approve labels for food products. However, the FDA is responsible for assuring that foods sold in the United States are safe, wholesome and properly labeled. The Federal Food, Drug, and Cosmetic Act (FD&C Act) and the Fair Packaging and Labeling Act (FPLA) are the Federal laws governing food products under FDA’s jurisdiction. The Nutrition Labeling and Education Act (NLEA), which amended the FD&C Act, requires most foods to bear nutrition labeling and requires food labels that bear nutrient content claims and certain health messages or claims to comply with specific requirements. 


While CBD does not currently fall within these federal laws, following these statutes and guidelines for foods and beverages containing CBD, like any other food or beverage, is highly recommended. As such, it is important to have all packaging and labeling reviewed by a promotional review board or committee or by outside counsel before finalizing. Further, certain ingredients in food products may require special labeling or warnings on the packaging. Therefore, the promotional review board or committee or outside counsel should review your ingredient lists to confirm that nothing additional is required to be on the package or label.


Best Practices for Labeling CBD Products


A key factor in all labeling is that it must be truthful and not misleading. The FDA and the Federal Trade Commission (FTC) are focusing their initial enforcement on companies that sell over the internet. Regardless of where you sell your product, the most important thing to keep in mind is that FDA and the FTC is focused first and foremost on labeling claims related to therapeutic uses. In other words, the labeling cannot discuss the effect of the products on the structure or function of the body or its use to treat, mitigate or prevent any disease. For example, FDA and FTC have issued a number of warning letters this year to companies making claims about CBD products related to pain, cancer treatment, sleep, anxiety, depression, ADHD, Alzheimer’s disease, Autism, post-traumatic stress disorder, schizophrenia, arthritis, fibromyalgia, neurodegenerative diseases and many others.  



When FDA and FTC review labeling, they look at everything in context, not just the words themselves. For instance, in these warning letters the FDA and FTC looked at the images on the company’s website, any hyperlinks to other websites or articles (even scientific in nature) that provide information on therapeutic benefits, a company’s social media accounts (such as Facebook, Instagram and Twitter), as well as meta tags used to direct people to a company’s website. Any communication that is owned, controlled, created, influenced, or affirmatively adopted or endorsed by or on behalf of the company is fair game for review by FDA and FTC.  In particular, companies are responsible for user-generated content that it solicits or influences, regardless of the forum. This includes all testimonials or endorsements used in advertising.


Outside of therapeutic claims, other CBD-related claims, such as “zero THC,” “non-THC,” or anything similar, may be difficult to include. This is because some states require that the percent of THC be included on the label, even for hemp and hemp-derived products. Further, some states require certification that the THC level is below 0.3 percent be included on the label. While these are in line with these labeling claims, other states, such as Oregon, require the packaging and labeling include a warning, such as “This product is derived from hemp and could contain THC. Keep out of reach of children.”  This required statement is at odds with a statement like “zero THC.”  


Of growing concern for consumers and regulatory agencies alike are claims concerning the potency of the CBD in a given product. States like Oregon require that the CBD amount listed on the label be the value calculated by a laboratory that did sampling and testing of the product.  Other states are likely to establish inspection and testing programs to ensure accuracy of CBD and THC concentrations. Keeping accurate records concerning the concentration of CBD is also important in light of a recent class action lawsuit filed in the Southern District of Florida alleging that CBD hemp oil was mislabeled as containing more cannabinoids than it actually did.


Similar potential litigation by plaintiffs’ bars in many states with strong consumer protection and consumer fraud statutes relate to labeling claims, such as “vegan,” “gluten-free,” “non-THC,” “all natural” and any geographic claims, such as “grown in USA.” All of these types of claims require additional support and/or certification prior to being able to make those claims on a package or label. The FTC also requires documentation of the manufacturing and sourcing of any product with the claim “grown in USA” or “made in USA.” Therefore, appropriate dossiers should be maintained to certify that these types of claims are truthful and accurate.


On Sept. 19, 2019, Congress sent a letter to FDA urging it to issue guidance announcing a policy of enforcement discretion toward hemp-derived CBD products. Hopefully, the FDA’s guidance and regulations will allow CBD to be infused into foods and beverages and provide adequate guidelines for the labeling of these products. Until then, keep these issues top of mind when putting together any labeling for your products. 


Jennifer Briggs Fisher, Partner at Duane Morris focuses her practice on representing businesses and corporate executives in highly-regulated industries, including cannabis and hemp. She also serves as a team lead for the Duane Morris Cannabis industry group. Carolyn A. Alenci, former Associate at Duane Morris provides integrated, industry-focused strategic counseling and advocacy for clients on FDA regulatory matters.