Will the FDA's Response To Curaleaf Set the Standard for On-Line CBD Sales?

The Food and Drug Administration issued a warning letter to Curaleaf, Inc. to stop selling CBD products that are unapproved and misbranded drugs within 15 days. The FDA reviewed Curaleaf’s social media accounts during April and June 2019, and determined that the products were “intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease and/or intended to affect the structure or any function of the body.”

Curaleaf sold the CBD products, including a lotion, pain-relief patch, tincture and disposable vape pen on its own website as well as Twitter and Facebook, which the FDA considered to be interstate commerce. Curaleaf updated its Facebook cover photo a day after receiving the letter to remove products that included words on the label that reflect an effect on the body such as relieve, revive, and uplift. However, these photos are still available in the archives and in the Facebook feed.

Curaleaf, Inc. is a public company that is listed on the Canadian Stock Exchange and can be purchased by US investors on the OTC market. In its response to the FDA on July 26, Curaleaf indicated that the company was in the process of reviewing its social media sites and that the company discontinued the products in question. Curaleaf’s stock has rebounded after initially falling to close at $7.40 on July 23, 2019.

The FDA is clearly making a statement by issuing a warning letter to such a large industry player. The question is whether the FDA will be satisfied with the steps Curaleaf has taken. This is a big risk with significant ramifications for the company. The FDA’s stance will set the standard in the CBD industry for what will be considered acceptable online marketing standards. The industry will be holding its breath.