CANNABIS-INFUSED PRODUCTS: LABELLING, REGULATION AND LIABILITY

CD: How popular have cannabis-infused products become in the US? How would you characterise the growth of this market?

Wu: It is safe to say that the growth of cannabis-infused products in the past few years is nothing short of extraordinary. Their popularity has become sufficiently mainstream in the US to be sold in national retail outlets despite legal uncertainty. In particular, products containing the non-psychoactive cannabinoid Cannabidiol (CBD) have primarily fuelled this growth, in the form of all manner of products, including as oils, lotions, cosmetics, tinctures, capsules, tablets and, in some states, in various food and beverages, including beer. According to a 2019 survey by Consumer Reports, an estimated 64 million Americans have tried a CBD product in the last 24 months; one in seven of their survey respondents also reported using it daily. These numbers are consistent with the financial growth predicted by cannabis market research company Brightfield Group, which predicted that CBD revenue went from about $620m in 2018 to around $5bn in 2019, a growth rate of 706 percent with estimated sales of $23.7bn by 2023.

CD: What rules and regulations currently pertain to the marketing, advertising and labelling of CBD products?

Wu: The Food, Drug and Cosmetic Act mandates certain information on product labels, including a statement of identity, statement of net weight or volume, name and address of manufacturer or distributor, warning or caution statements and ingredients. The Food and Drug Administration (FDA) also has enforcement powers over the marketing, advertising and labelling of CBD products that make therapeutic benefit or disease claims. The Federal Trade Commission (FTC) similarly prohibits marketing statements that are false or misleading. Those agencies recently sent joint warning letters to retailers of CBD products that made egregious and unsubstantiated claims on product websites and in marketing materials, including that CBD effectively treats diseases like cancer, Alzheimer’s, fibromyalgia, and psychiatric disorders. One recent warning letter also noted that one company made unsubstantiated claims regarding the calming and anti-inflammatory effects of CBD, among other things.

Jul-Sep 2020 issue

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