CBD Supplement Label, Claim Violations Form Perfect Storm For Class Actions

"Technical" label violations, "full-spectrum" claims could spur class actions in CBD supplement space, says attorney Justin Prochnow. At Natural Products Expo East, he says numerous entrants have no experience and labels are likely targets as no standards are recognized for product and ingredient descriptions.

A wave of cannabinoid and hemp dietary supplements and the absence of standards for describing the products are creating a perfect storm for class action suits, suggests food and drug attorney Justin Prochnow.

Discussing hemp and CBD products at the Natural Products Expo East trade show in Baltimore on 11 September, Prochnow advised marketers in the space to tread carefully with claims and to review packaging details, including product and ingredient weights and dietary Supplement Facts labels. While violative claims such as treating a disease perhaps are more noticeable, noncompliance with Food and Drug Administration regulations for label content and formatting also will attract scrutiny.

“Believe it, people are looking at your label,” he said.

Plaintiffs' attorneys likely already are working on class action complaints. “We have enough issues in industry with whether CBD and hemp is legal. Don’t get hung up and pulled out on these little technical labeling violations,” said Prochnow, co-chair of the food, beverage and agribusiness practice at Greenberg Traurig LLP in Denver. 

Prochnow said he's spotting similar mistakes in reviewing numerous labels from clients, some with no background in supplement manufacturing and marketing.

Some omit the term “supplement” on the front of labels or push their luck and omit a Supplement Facts label altogether as required by FDA. Another common error is failing to state a product's net quantity, which has to be in both imperial and metric terms; labels must specify whether a labeled weight refers to an entire container or a serving.

Unlawful, But Regulated

Prochnow also noted that some firms may not understand that CBD and hemp food and supplement are subject to FDA labeling regulations even though the agency currently considers the ingredients unlawful for use as food additives or dietary ingredients. Labels and other packaging might not identify a product as a food or a supplement, but its intended use, as well as its form make it subject to the agency's regulations for those product categories.

“If you are selling product in capsules or drops, that is a supplement,” he said. “It needs to have a statement of identity. Has to say ‘dietary supplement’ somewhere on the front."

In what food and drug attorneys say likely is the start of numerous cases, complaints have been filed in US courts by people who allege they lost their jobs after testing positive for tetrahydrocannabinol, the psychoactive ingredient in cannabis, after using purportedly THC-free CBD products. (Also see "CBD Suits Challenge ‘THC-Free’ Claims After Users Fail Drug Tests; Plaintiffs Bar May Just Be Warming Up " - HBW Insight, 22 Aug, 2019.)

Manufacturing and marketing of CBD and hemp supplement products in the US has accelerated greatly since Congress passed the US Department of Agriculture 2018 farm bill, which de-scheduled hemp – defined as derivatives from cannabis plants containing no more than 0.3% concentration, on a dry weight basis, of THC as a controlled substance. Although it deems hemp- and cannabis-derived ingredients ineligible for use in food and supplements as well as other non-drug products subject to its oversight, the FDA is considering a potential pathway for using the substances in products other than drugs and it is allowing sales by focusing enforcement on products making disease and other violative claims. (Also see "CBD Supplement Market Enforcement Based On FDA Concerns, Not Discretion" - HBW Insight, 17 May, 2019.)

‘Full-Spectrum,’ ‘Rich’ Are Red Flags

Prochnow said supplement marketers with some experience in the space still make themselves targets of FDA enforcement or class action litigation with claims on packaging such as “full-spectrum CBD” and “phytocannabinoid-rich.”

“You can have CBD from full-spectrum hemp extract, but full-spectrum CBD is an oxymoron” he said. That's because CBD is one component of full-spectrum hemp extract.

Similarly, he sees packaging that touts formulas as containing “full-spectrum hemp extract without THC”—a claim that also doesn’t work because THC is part of full-spectrum hemp.

“This is one of the big problems with industry, we don’t have a formal definition of these terms,” Prochnow said.

Marketers also should avoid using “rich” to describe CBD in a product, Prochnow says, noting he often has seen the claim “phytocannabinoid-rich.”

He referenced an FDA food regulation which states “the terms ‘high,’ ‘rich in,’ or ‘excellent source of’ may be used on the label and in the labeling of foods … provided that the food contains 20% or more of the [reference daily intake] or the [daily reference value] per reference amount customarily consumed.”

Even if a product contains high levels of phytocannabinoids, though, no daily values are established for the ingredients.

Prochnow said similar legal battles are ongoing about "antioxidant-rich” claims on food that does not actually contain large amounts of the ingredient.

In 2012, a plaintiff sought class action status for a complaint filed in Arkansas against Twinings North America Inc., a division of Associated British Foods, alleging paying a premium for the firm's teas because labeling claims identified the products as a “natural source of antioxidants” and “natural source of protective antioxidants.” The company based those claims on the teas’ flavonoids, which are known to exhibit antioxidant activity. (Also see "Beauty Firms: Take Lessons From Food Industry In Class-Action Defense" - HBW Insight, 12 May, 2014.)

The plaintiff argued FDA had not established a recommended daily intake for flavonoids and the firm was not authorized to make the claim. However, in 2014, a district judge dismissed the complaint, determining that because the marketer did not imply the amount of antioxidants the products contained, the labeling was not false or misleading.

More recent litigation involves Amazon brand energy drinks. On 8 July, a complaint seeking class action certification was filed in US District Court for the Central District of California against Sambazon Inc. over packaging claims “antioxidant-rich” and “clean caffeine.” The plaintiffs argue the drinks, made for Amazon, don't include nutrients with recognized antioxidant activity and argued there is no such thing as “clean caffeine.”

The supplement industry has urged the FDA to step-up its enforcement of the market, where they suggest many noncompliant businesses are putting consumer safety at risk. In July, the Natural Products Association, the Consumer Healthcare Products Association and the Council for Responsible Nutrition asked FDA to increase its enforcement of products already on the market, moving beyond warning letters to carry out inspections, import reviews and other actions. (Also see "Allowing CBD Use In Supplements Benefits Drug Innovation – Trade Groups " - HBW Insight, 23 Jul, 2019.)