The Federal Trade Commission (FTC) sent letters on Tuesday ordering three companies to stop making unfounded health claims about their CBD products.
“It is illegal to advertise that a product can prevent, treat, or cure human disease without competent and reliable scientific evidence to support such claims,” FTC said in a press release about the action.
Though the agency did not name the three companies that received letters, it described their claims.
One firm said on its website that CBD “works like magic” to relieve “even the most agonizing pain” and has been “clinically proven” to treat cancer, Alzheimer’s disease, multiple sclerosis, fibromyalgia, cigarette addiction and colitis.
Another company claimed CBD is a “miracle pain remedy” that can also treat treat autism, anorexia, bipolar disorder, post-traumatic stress disorder, schizophrenia, anxiety, depression, Lou Gehrig’s Disease (ALS), stroke, Parkinson’s disease, epilepsy, traumatic brain injuries, diabetes, Crohn’s disease, psoriasis and AIDS.
A third CBD provider sold cannabidiol-infused gummies that it said can treat “the root cause of most major degenerative diseases, including arthritis, heart disease, fibromyalgia, cancer, asthma, and a wide spectrum of autoimmune disorders,” according to FTC.
FTC sends warning letters to companies advertising their CBD-infused products as treatments for serious diseases, including cancer, Alzheimer’s, and multiple sclerosis: https://t.co/r4TGcRbbRv pic.twitter.com/QAJCNn8oPC
— FTC (@FTC) September 10, 2019
The agency is directing the companies to reply within 15 days with information about steps they have taken to address potential violations of the law, which could lead to injunctions and orders to refund money to consumers.
The latest actions follow several other steps the federal government has taken to push back on marketplace claims about CBD.
In March, FTC and the Food and Drug Administration (FDA) teamed up to send a previous round of letters to three companies for potentially making false or unsubstantiated health claims about their CBD products. In July, FDA issued a warning letter to Curaleaf Inc. about what the agency said were “unsubstantiated claims” the company made about cannabidiol products on its website.
Hemp and its derivatives, including CBD, were legalized under the Farm Bill that was enacted late last year but FDA has not yet created a process to approve the use of the compound in food products or dietary supplements.
Preliminary research has indicated that CBD has the potential to help people struggling with substance use disorders involving alcohol, opioids and stimulants, but to date it has only been federally approved to treat severe seizure disorders in the form of the prescription medication Epidiolex.
“Before making claims about purported health effects of CBD products, advertisers need sound science to support their statements,” FTC wrote in a blog post. “The takeaway tip for anyone in the industry is that established FTC substantiation standards apply when advertisers make health-related representations for CBD products.”
A separate FTC consumer advisory urges people to “talk with your doctor before you try a healthcare product you find online” and “find out about the product’s risks, side effects, and possible interactions with any medications you’re taking.”
Photo by Kimzy Nanney.
Businesses Are More Profitable And Innovative In States With Legal Marijuana, Study Finds
States have been experimenting with various forms of marijuana legalization for years and, according to new research, business is better where cannabis is legal.
To investigate the impact legalization has on the economy, researchers at the University of Iowa analyzed 9,810 corporations between 1991 and 2017, finding “a multitude of positive effects” after a state enacts medical marijuana laws.
“Firms headquartered in marijuana-legalizing states receive higher market valuations, earn higher abnormal stock returns, improve employee productivity, and increase innovation,” the authors said.
The study, which was reviewed by Marijuana Moment but has yet to be published, found that having cannabis laws on the books can unleash the previously untapped potential of employees and helps companies attract new talent.
Corporations “become more productive and hire more productive human capital from out of state after the passage of the law,” the authors wrote.
They also report that “firms earn higher net income per employee” after a medical cannabis law is passed, and “the positive impact is sustained over the next two years.”
Additionally, the study found a 4.2 percent increase in company value, which translates into an average increase of the market-value of corporations by $166 million after a medical marijuana law is enacted.
“Firms experience an increase in profitability likely due to the positive shock to the human capital post-legalization,” the study finds.
“State-level medical marijuana laws have a considerable positive impact on firms in the state, likely by having a positive impact on the human capital of firms.”
Higher profits and more productivity aren’t the only benefits a company sees after marijuana is legalized. When it comes to stock prices, companies located in states with medical cannabis fare better than those in jurisdictions where the plant is prohibited.
Additionally, the stock value of corporations in medical marijuana states increased by 4.56 percent. An “equal-weighted portfolio” composed of similar stocks located in states without a medical marijuana program showed a loss of about two percent annually.
Returns on stocks were also 4.44 percent higher per year for companies in states that have legalized.
What’s the source of such financial benefits? The authors suggested that companies will ramp up innovation after marijuana laws are passed, making the company more profitable over time, compared to their counterparts in areas that don’t permit cannabis at all.
“Our results imply that after marijuana legalization, firms not only apply for more patents and receive more citations on those patents, but also are more productive and efficient in generation innovation output from labor and [research and development] input,” the study determined.
“We also find an increase in both entrepreneurial activity and venture capital funding in states that legalize marijuana.”
Finally, the study measures the “innovation productivity” of those working, living and moving to the state, following the passage of a medical marijuana law.
“The inventors that are in the state both before and after legalization become more creative” post-legalization, the authors found.
And when it comes to attracting new talent from other states, “more inventors relocate to states after medical marijuana legalization than before passage of the law.”
The benefit is two-fold for such corporations. In addition to being “able to attract more productive inventors” in states with medical marijuana “relative to states that do not legalize,” existing employees also see an uptick in innovation after a cannabis law is passed, the study concluded.
Company Gets Trademark For The Word ‘Psilocybin,’ Frustrating Decriminalization Advocates
As psychedelics reform efforts pick up across the U.S., there’s an increasing weariness among advocates about the potential corporatization that may follow.
That’s why many found it alarming when a California-based company announced on Thursday that it had successfully trademarked the word “psilocybin,” the main psychoactive constituent of so-called magic mushrooms.
Psilocybin™ is a brand of chocolates that do not contain the psychedelic itself but are meant to “begin educating, enlightening and supporting the community in upgrading their inner vibrations in order to get everything they want of their time here on earth,” according to a mission statement.
Soon after founder Scarlet Ravin shared news of the trademark on LinkedIn, advocates raised questions and concerns: What does that mean on a practical level for other psilocybin organizations? Why should one brand get exclusive rights (to a certain legal extent) to the scientific name of a natural substance?
The reality of this particular trademark is more nuanced than it might appear at first glance. While it’s true that the company was granted the distinction by the U.S. Patent and Trademark Office, it’s specifically for educational materials and it’s listed on the supplemental register, rather than the principal register, which means it would be incumbent upon the brand to prove that it has earned distinctiveness of the mark if the issue went to court.
“It’s certainly good for her business to have that mark, but I think at the end of the day, it’s going to be somewhat weak,” Larry Sandell, an intellectual property attorney at Mei & Mark LLP, told Marijuana Moment. He added that this example is “indicative that people are trying to stake early claims to IP.”
“Even if they might be somewhat overreaching, people see a potential new market here and they want to stake out their ground,” he said. “It’s a big next space that people are anticipating a legal market. Maybe it’s where cannabis was five to 10 years ago.”
Despite those legal limitations, reform advocates view the trademark as emblematic of a bigger issue—that someone would presume to take ownership of a substance that’s at the center of a national debate on whether or not to criminalize individuals for using it.
Kevin Matthews, who led the successful campaign to decriminalize psilocybin mushrooms in Denver last year and is the founder of the national psychedelics advocacy group SPORE, told Marijuana Moment that he didn’t doubt Ravin had the right intentions—to promote education into the substance—but he said the decision to trademark is nonetheless questionable.
“This being an open-source movement, trademarking the word psilocybin, in some ways it feels like—although I don’t think this is her intention—it’s lacking perspective,” he said. “Does that mean we can’t use psilocybin as SPORE because we’re an educational non-profit and she’s a for-profit branded company? It doesn’t make a lot of sense to me. She needs to let go of the trademark.”
Ravin said that her goal in trademarking psilocybin was to prevent the substance from being becoming the next cannabis, which she said has been corrupted from its “true spiritual, medicinal benefit” and turned into a corporate commodity.
“Knowing that psilocybin is going to be next [to be legalized] I feel strongly guided by the deepest part of my heart to really offer a sense of education of what could be when you take such a strong, beautiful medicine and to give people an education platform here and now to let them know what’s coming, how to receive it, how to get the most benefit from,” she told Marijuana Moment in a phone interview.
“We paved the way for this being a medicinal offering and not a consumer, recreational shitshow. That was our intention,” Ravin said. “The only way that we are going to have access to mainstream consumers is by having some sort of trademark on the word so that we can use it for something that’s not what it actually is.”
“With this being something that we can now put into market with a box of chocolates that has no psilocybin in it, but as you can already see, it creates a platform for discussion of what the beauty of this plant can do,” she said. “Me and my movement and my team, we don’t own the word. We’re not going to ever sue anyone who also uses the word—we’re opening a doorway for ourselves and anyone that wants to see this educated upon so that we can hit people who are unfamiliar with it now with downloads to actually have this be a safe, successful psychedelic transition.”
Asked to react to criticism about the trademark from advocates, Ravin said “we’re all here to follow spirit guidance to show love and light, and the visions I had of doing what we’re doing now was based upon breaking boundaries and breaking perceptions and allowing people to have an opportunity to sink into being one unit.”
“Yeah, it might be coming out, we might be using the platform of psilocybin. We can use any platform to do this,” she said. “We can use any platform to come together as a whole, and the longer that people sit in duality and say, ‘oh now she’s going to have a stronger voice than me is just looking at something not through their heart,’ it’s looking at it through ego and judgement.”
“The more that we describe what we’re doing, the more people I think will start to feel our unity and we’ll be able to move together as a stronger force than pointing fingers and trying to separate one another,” she said. “Those days are done.”
Ravin said that once the Psilocybin™ chocolates are ready for market, she plans to contribute 10 percent of profits to the Multidisciplinary Association for Psychedelic Studies (MAPS), which is involved in researching therapeutic benefits of psychedelic substances.
Photo courtesy of Wikimedia/Workman.
China Must Import More Hemp From U.S. Under New Trade Deal
After years of being one of the United States’s main sources of hemp imports, China will now be required to buy a lot more of the non-intoxicating cannabis crop from the U.S. under a new trade deal.
Hemp, which was federally legalized under the 2018 Farm Bill, is one of a long list of agricultural products that China agreed to import on a larger scale over the next two years as part of an international trade agreement that was signed on Wednesday.
“The Parties acknowledge that trade and economic structural changes resulting from this Agreement and from other actions being taken by China to open up its economy and improve its trade regime should lead to improved trade flows, including significant increases in exports of goods and services to China by the United States and other countries,” the accord says.
“The Parties believe that expanding trade is conducive to the improvement of their bilateral trade relationship, the optimal allocation of resources, economic restructuring, and sustainable economic development, given the high degree of complementarity in trade between them. The Parties recognize that the United States produces and can supply high-quality, competitively priced goods and services, while China needs to increase the importation of quality and affordable goods and services to satisfy the increasing demand from Chinese consumers.”
While the deal didn’t specify just how much more hemp China will be importing, the document states that the country must spend at least $12.5 billion more than it did in 2017 on more than 200 agricultural commodities, including the cannabis plant, for calendar year 2020. The following year, it must spend at least $19.5 billion more.
Included in the deal is a particular form of cannabis, which is referred to as “true hemp” in the document.
“True hemp (cannabis sativa l.), raw or processed but not spun; tow and waste of true hemp (including yarn waste and garnetted stock),” the description of the item states.
Jonathan Miller, general counsel for the U.S. Hemp Roundtable, told Marijuana Moment that hemp’s inclusion in the trade deal is a “really good development.”
“The fact that China would be importing our hemp and would be giving a new market for American farmers is pretty exciting,” he said, referring to the fact that the U.S. has historically imported the crop from China and that it has sometimes been criticized as being of inferior quality.
While cannabis has been cultivated in China for thousands of years, the country has only recently begun expanding the industry domestically. Part of the delay has to do with strict anti-drug laws, but as the legalization has spread internationally, more businesses are getting into the hemp, and particularly CBD, market.
Meanwhile, in the U.S., the hemp industry has exploded, with bipartisan lawmakers working with regulators to ensure that hemp farmers have access to the resources they need to expand and meet booming consumer demand for CBD products. The U.S. Department of Agriculture (USDA) is currently finalizing its regulations for the crop after releasing an interim final rule last year.
USDA clarified in guidance last year that hemp plants and seeds are able to be imported from other countries. In 2018, the U.S. imported about $3.3 million in hemp from China, according to Hemp Industry Daily.
Photo courtesy of Pixabay.