When it comes to CBD products, to advertise or not to advertise is just one of the many questions

From Michael Abate, Kaplan Johnson Abate & Bird LLP, KPA General Counsels and KPA FOI Hotline Attorneys (502-416-1630)

Michael Abate

KPA has received an increasing number of inquiries regarding whether members can accept and run advertisements for CBD products and stores. The answer is: it depends. There are many factors that must be considered, and the KPA cannot give a blanket recommendation on whether to print such ads without understanding certain additional facts about your specific situation. We encourage you to consult counsel, including the KPA’s outside General Counsel, to discuss your question in more detail and obtain a risk analysis suited to your situation. With those caveats, here are a few things to understand about CBD product advertisements:

Whether CBD products are legal depends on how they are made.

The possession and sale of marijuana remains illegal under federal and Kentucky law, so it’s important to know whether the advertiser is selling marijuana-based CBD products or hemp-based CBD products. If the product is derived from a marijuana plant—that is, any cannabis plant with a THC concentration of over 0.3% on a dry weight basis—it is illegal to market or sell. That likely includes even generic advertisements, such as an open houses to come see and/or try those products.

The 2018 federal Farm Bill, along with changes to Kentucky law (see KRS 281A.010(27)(e)), did open the door to cultivation and marketing of legitimate industrial hemp products—that is, products made from cannabis plants with a THC concentration below 0.3%. But neither law broadly legalized hemp production or cultivation. Rather, federal law allowed states to set up regulatory schemes for the licensing of hemp cultivation and production, which must in turn be approved by the USDA. Kentucky has established such a regime, but, as the Kentucky Agriculture Department warns on its website, “no person can grow, handle, or process hemp plants, viable seed, leaf or floral materials without a hemp license issued by the Kentucky Department of Agriculture.”

Thus, even if a CBD product is derived from industrial hemp of sufficiently low THC concentration, it may nevertheless be illegal if its producer has not secured the relevant licenses from the Kentucky Agricultural Commissioner (or under a similar regulatory regime established by another state and approved by the federal government).

Thus, in order to know whether the product(s) being advertised are legal, it would be prudent for publishers to seek out information concerning the products in question—specifically, the THC concentration of the plants from which they are derived and whether the producers of the products have the relevant license(s) from Kentucky and/or their state of cultivation and/or production.

Watch Out for Health Claims or Ingestible Products Not Approved by the FDA

Ads that advertise “ingestible” products, or make health claims about CBD products, present a host of complex issues.

The law on CBD products in food and ingestible items is murky—to say the least. It remains illegal under Federal law to introduce food containing THC or CBD into interstate commerce. The FDA has announced, however, that it is studying the issue to give the public clear guidance in light of many states’ moves to legalize marijuana in some form, and the agency recently extended a public comment period to take more input on the issue. The new federal rules have not yet come out, however.

At the same time, some states have moved to allow the inclusion of CBD and/or THC in food products. These laws remain in a legal gray area, however, because a state cannot permit what the federal government expressly prohibits. Therefore, unless and until the federal government allows food products containing CBD or THC into the marketplace, publishers should be aware those products are considered illegal by the federal government, even if it is not enforcing the prohibition for now.

Similarly, publishers must be wary of health claims made by CBD marketers. In July, the Food and Drug Administration sent a warning letter to Cureleaf, Inc. for making unsubstantiated claims that its products treat cancer, Alzheimer’s disease, opioid withdrawal, pain, and pet anxiety. The FDA referred to the advertised products, which included CBD lotion, a CBD pain-relief patch, CBD tincture, and CBD vape pen, as unapproved new and misbranded human drug products. Publishers must therefore be careful about running ads that repeat these kinds of claims.

Website Advertisements Present Additional Concerns

Placing ads on your website that are available around the country raises additional concerns beyond those already discussed. As noted above, the legality of CBD products under the Farm Bill depends, in part, on the licensing and regulatory scheme in each state where the products are made and/or sold. Advertising products in another state could expose you to liability in a foreign state (assuming they could obtain jurisdiction over you—which may not be easy).

Probably for this reason, many online advertising companies, including Google and Facebook, generally reject ads for CBD products. In fact, CBD sellers have complained that these companies aggressively screen out CBD and marijuana content, which has led them to get creative about how they describe and market their goods online. While some of these companies have recently loosened a few restrictions (Facebook will now allow ads for topical hemp products, or links that redirect to landing pages advertising ingestible hemp or topical CBD), they still do not permit widespread advertisement of CBD products on their platforms. Publishers would be prudent to keep an eye on Google and Facebook’s CBD advertising policies when it comes to the digital space, as they are keenly aware of the evolving regulatory landscape across the country.

There is Always Some Element of Risk in Advertising a Potentially Illegal or Unlicensed Product

Ultimately, whether to accept an advertisement for a CBD product comes down to a balancing of risks. No definitive answer can be given, and you should consult with an attorney to weigh risks relevant to your specific scenario. But there are reasons to be concerned about advertising products that might be illegal.

First, it is always risky to accept advertisements for illegal products. Few publishers would accept an ad for marijuana or other controlled substances, for fear of being subject to investigation or legal action. And while the risk is likely much lower for advertising a potentially legal product like CBD, it cannot be eliminated entirely. Even if the risk of the federal government pursuing a publisher for advertising CBD products might seem low, there is always a risk that a state or local prosecutor out to prove a point might try to make an example of a publisher. That is why it is important for publishers to understand the legal issues noted above and to undertake some amount of diligence before deciding to run an ad.

Second, papers that circulate by mail have an additional risk to consider—the U.S. Postal Inspectors. Federal law makes the marketing of any marijuana products illegal, and the National Newspaper Association General Counsel has advised that U.S. postal employees are instructed to refer such ads to law enforcement for further review. While the Obama Administration had a policy of not pursuing such investigations for medical marijuana products, there is no such assurance from the Trump Administration. And, with changing DOJ policies, no assurances can be given. Of course, there is probably an even lower risk for advertising legitimate CBD products by mail, but the risk is not zero. And while there may be First Amendment grounds for challenging these restrictions, such a challenge is likely to arise only in the context of expensive—and perhaps criminal—litigation, which no publisher wants to face.

* * * * *

If you still have questions about CBD advertising, you can always reach out to KPA’s general counsel, Kaplan Johnson Abate & Bird LLP, by calling the KPA Hotline at 502-416-1630. Their attorneys, including Jon Fleischaker and Michael Abate, can walk you through the risk analysis outlined above.

 

Leave a Reply

Your email address will not be published. Required fields are marked *