The Food and Drug Administration (FDA) and Federal Trade Commission (FTC) sent a warning letter to a Florida-based CBD company on Tuesday, alleging that the business made several unsanctioned claims about the therapeutic benefits of their products.
The federal agencies accused Rooted Apothecary of unlawfully asserting that their cannabidiol products could treat symptoms of conditions such as ADHD, Parkinson’s disease, ear aches, ADHD and autism. Those claims appeared on the company’s website and social media accounts, they said.
Certain products appeared to be marketed as dietary supplements, which FDA currently prohibits as it works to develop an alternative regulatory scheme for CBD.
“Cannabis and cannabis-derived compounds are subject to the same laws and requirements as FDA-regulated products that contain any other substance,” Acting FDA Commissioner Ned Sharpless said in a press release. “We are working to protect Americans from companies marketing products with unsubstantiated claims that they prevent, diagnose, treat, or cure a number of diseases or conditions.”
FDA and FTC have issued a joint warning letter to a company marketing unapproved cannabidiol products with unsubstantiated claims to treat teething and ear pain in infants, autism, ADHD, Parkinson’s and Alzheimer’s disease, among other conditions/diseases. https://t.co/tsn4SBiGzH pic.twitter.com/sG3wyURMDS
— Dr. Ned Sharpless (@FDACommissioner) October 22, 2019
We’ve sent numerous warning letters that focus on matters of significant public health concern to CBD companies, and these actions should send a message to the broader market about complying with FDA requirements.
— Dr. Ned Sharpless (@FDACommissioner) October 22, 2019
“We’ve sent numerous warning letters that focus on matters of significant public health concern to CBD companies, and these actions should send a message to the broader market about complying with FDA requirements,” he said. “As we examine potential regulatory pathways for the lawful marketing of cannabis products, protecting and promoting public health through sound, science-based decision-making remains our top priority.”
FTC’s complaint with the company is that it violated a law that requires businesses that advertise medical claims about their products to have “competent and reliable scientific evidence” to back them up, which could include human clinical trials. Making or exaggerating such claims through “a product name, website name, metatags, or other means” without proper evidence is also prohibited.
FTC and @US_FDA warn Florida company marketing CBD products about claims related to treating autism, ADHD, Parkinson’s, Alzheimer’s, and other medical conditions: https://t.co/cAbxPPcxk8 pic.twitter.com/GdlttyBgxv
— FTC (@FTC) October 22, 2019
Rooted Apothecary must respond to the agencies within 15 working days to explain what steps it’s taking to resolve the issues. If the company fails to do so, it is subject to legal action, including the possible seizure of its products or an injunction. It may also have to compensate customers.
FDA emphasized that CBD products—other than the prescription medication Epidiolex, for the treatment of intractable epilepsy—are not currently allowed. But it also reiterated that the agency is in the process of developing rules that could allow for the lawful marketing of the compound.
In April, FDA sent warning letters to three other CBD companies that it said was making unauthorized claims about the medical benefits of their products. FTC also submitted warning letters to three separate CBD companies for allegedly advertising misleading statements about their products last month.
These letters are examples of the agency’s use of enforcement discretion. Former FDA Commissioner Scott Gottlieb, who recently suggested that the federal government should be involved in regulating state marijuana programs, clarified in March that the agency is only going after companies that make especially misleading claims about their products.
Senate Majority Leader Mitch McConnell (R-KY), who championed a provision of the 2018 Farm Bill federally legalizing hemp and its derivatives, has urged FDA to clear a path for the lawful marketing of CBD products by using enforcement discretion while it develops an interim final rule. A bipartisan group of lawmakers made a similar request in a letter sent to the agency last month.
“The FDA is working quickly to further clarify our regulatory approach for products containing cannabis and cannabis-derived compounds like CBD while using all available resources to monitor the marketplace and protect public health by taking action as needed against companies,” FDA Principal Deputy Commissioner Amy Abernethy said.
FDA’s working quickly to further clarify our regulatory approach for products with cannabis/cannabis-derivatives like CBD while using all available resources to monitor the marketplace & protect public health by taking action as needed against companies. https://t.co/HB9IhG2qud
— Dr. Amy Abernethy (@DrAbernethyFDA) October 22, 2019
We are committed to advancing our regulation of these products through an approach that, in line with our mission, prioritizes public health, fosters innovation and promotes consumer confidence. We plan to provide an update on our progress in this area in the near future.
— Dr. Amy Abernethy (@DrAbernethyFDA) October 22, 2019
“We recognize that there is significant public interest in cannabis and cannabis-derived compounds; however, we must work together to fill in the knowledge gaps about the science, safety and quality of many of these products,” she said. “We are committed to advancing our regulation of these products through an approach that, in line with our mission, prioritizes public health, fosters innovation and promotes consumer confidence.”
Photo courtesy of Kimzy Nanney.
Illinois Gets More Tax Revenue From Marijuana Than Alcohol, State Says
Illinois took in more tax dollars from marijuana than alcohol for the first time last quarter, according to the state Department of Revenue.
From January to March, Illinois generated about $86,537,000 in adult-use marijuana tax revenue, compared to $72,281,000 from liquor sales.
Those following the cannabis market in Illinois might not be entirely surprised, as the state has consistently been reporting record-breaking sales, even amid the pandemic. In March alone, adults spent $109,149,355 on recreational cannabis products—the largest single month of sales since retailers opened shop.
It was in February that monthly cannabis revenues first overtook those from alcohol, a trend that continued into March.
If the trend keeps up, Illinois could see more than $1 billion in adult-use marijuana sales in 2021. Last year, the state sold about $670 million in cannabis and took in $205.4 million in tax revenue.
Officials have emphasized that the tax dollars from all of these sales are being put to good use. For example, the state announced in January that it is distributing $31.5 million in grants funded by marijuana tax dollars to communities that have been disproportionately impacted by the war on drugs.
The funds are part of the state’s Restore, Reinvest, and Renew (R3) program, which was established under Illinois’s adult-use cannabis legalization law. It requires 25 percent of marijuana tax dollars to be put in that fund and used to provide disadvantaged people with services such as legal aid, youth development, community reentry and financial support.
Awarding the new grant money is not all that Illinois is doing to promote social equity and repair the harms of cannabis criminalization. Gov. J.B. Pritzker (D) announced in December that his office had processed more than 500,000 expungements and pardons for people with low-level cannabis convictions on their records.
Relatedly, a state-funded initiative was recently established to help residents with marijuana convictions get legal aid and other services to have their records expunged.
But promoting social equity in the state’s cannabis industry hasn’t been smooth sailing. The state has faced criticism from advocates and lawsuits from marijuana business applicants who feel officials haven’t done enough to ensure diversity among business owners in the industry.
Colorado Marijuana Sales Reached $167 Million In February
Colorado’s overall cannabis sales for the first two months of 2021 are $78 million higher than those for January and February of 2020.
By Robert Davis, The Center Square
Total marijuana sales in Colorado reached $167 million in February, the state’s revenue department announced on Friday.
The total represents a $20 million decline in sales from the previous month. However, Colorado’s overall sales for the first two months of 2021 remain $78 million above the pace set between January and February of 2020.
Marijuana sales are calculated by adding the total sales for both medical and recreational marijuana sales in Colorado’s 64 counties.
Denver County led all others in total recreational sales with over $38 million. Arapahoe and Adams counties followed suit with $13 million and $11 million in recreational sales, respectively.
Denver also led the way in medical marijuana sales, bringing in a total of $14 million. El Paso County was a close second, reaping over $10 million in medical sales.
Sales are not automatically accounted for in the state’s accounting system. This means the Department of Revenue (CDOR) relies on each county to report their sales before reporting the total. In effect, marijuana sales are reported one month behind tax and fee revenue totals.
Meanwhile, Colorado collected over $33 million in tax revenue in March. This total represents both taxes levied from medical and recreational marijuana sales, as well as license and application fees.
Between February and March, state tax revenue from marijuana sales declined 4 percent, according to CDOR data.
Tax revenue comes from a 2.9 percent state sales tax on marijuana sold in stores, a 15 percent state retail marijuana sales tax, and a 15 percent state retail marijuana excise tax on wholesale sales or transfers of retail marijuana.
Uber Will ‘Absolutely’ Explore Marijuana Deliveries When Federal Prohibition Ends, CEO Says
The CEO of Uber said on Monday that the ride share company will “absolutely” explore adding marijuana deliveries to its services when federal prohibition ends.
Dara Khosrowshahi was asked about the prospect of expanding his business to include cannabis deliveries during an interview with CNBC. He said while the company remains focused on grocery and alcohol deliveries, in addition to its core ridesharing service, that’s certainly in the cards if marijuana is federally legalized.
Uber is interested in “the types of deliveries that a high percentage of consumers are going to want delivered fast into their home and are quite frequent,” he said. “We think, obviously, food, grocery, pharmacy and alcohol are part of that category,” but cannabis also holds potential.
“When the road is clear for cannabis when federal laws come into play, we’re absolutely going to take a look at it,” Khosrowshahi said. “But right now with grocery, with food, with alcohol, et cetera, we see so much opportunity out there and we’re going to focus on the opportunity at hand.”
Could you get your weed delivered through Uber? CEO Dara Khosrowshahi discusses the potential business strategy: "When the road is clear for cannabis and federal laws come into play, we're absolutely going to look at it." (via @CNBCTechCheck) https://t.co/6VM454ugka pic.twitter.com/bRjpv7vvhU
— CNBC (@CNBC) April 12, 2021
The tech executive was specially asked about the possible expansion into the cannabis market in light of legalization recently being enacted in New York. And if polling from that state is any indication, Uber would see the demand for deliveries that it’s looking for, as 53 percent of New Yorkers said in a survey that they would favor having that option available to consumers.
But for now, the CEO said the business is keeping its eyes on current expansions, which includes its recent acquisition of the alcohol delivery service Drizly. That company did launch an ancillary cannabis delivery service called Lantern—but following the Uber deal, it announced that the two entities would be separated, with Lantern operating independently as a private company.
Of course, as a national corporation, Uber is also making a risk assessment given the ongoing ban on cannabis at the federal level. But a policy change to that end could come sooner than later.
Senate Majority Leader Chuck Schumer (D-NY) has said that a bill to legalize marijuana that he’s been working on with Senate Finance Chairman Ron Wyden (D-OR) and Sen. Cory Booker (D-NJ) will be released “shortly.”
On the House side, Judiciary Chairman Jerrold Nadler (D-NY) has similarly signaled that his cannabis descheduling bill—the Marijuana Opportunity, Reinvestment and Expungement (MORE) Act—will be reintroduced this session. That proposal passed the House last year but did not advance in the Senate.
With Democrats in control of both chambers and the White House this session, there’s renewed hope among advocates that the days of prohibition are soon to be over. Still, questions remain about President Joe Biden’s role in the reform, as he opposes adult-use legalization and his press secretary said last month that his position “has not changed” to that end.
In any case, Uber’s apparent interest in participating in the market once those federal barriers are lifted is another sign of the industry’s potential. That said, many advocates have expressed that small businesses—particularly those operated by people most impacted by cannabis criminalization—should be prioritized in any legalization legislation over large companies.