Unlike other states, such as Colorado, California, and even Maryland, here in New Jersey, our laws concerning the advertising and marketing of cannabis products are sparse.
Advertising Cannabis Laws (Or Lack Thereof) in New Jersey
When it comes to medical marijuana, our statute does not address advertising (other than listing of prices), and the regulations discuss only physical characteristics of alternative treatment centers and a prohibition on certain merchandising. As for industrial hemp, although the Hemp Farming Act enacted this past summer allows New Jersey licensees to grow, cultivate, and process hemp, we are still waiting on regulations setting the parameters of such activities, including advertising and marketing. That means we also do not have any rules for the advertisement of hemp-derived CBD products.
New Jersey’s proposed adult-use marijuana bill (S2703) included many of the advertising rules seen in other states, such as warnings that marijuana can impair concentration, and there may be health risks associated with using marijuana, and prohibitions on advertising in a way that appeals to minors or in certain locations where minors are expected to be present. However, that bill has stalled in the Legislature, and whether New Jersey will have adult-use marijuana will be a ballot question in November 2020.
The Advertising Cannabis Laws New Jersey Does Have
Despite a lack of cannabis-specific laws in the Garden State, you cannot ignore our general laws governing commercial conduct, which applies equally to any business or industry. For instance, cannabis businesses always need to be wary of the Consumer Fraud Act (“CFA”), prohibiting unconscionable commercial practices, deception, fraud, false pretense, false promise, misrepresentation, or the knowing, concealment, suppression, or omission of any material fact in connection with the sale or advertisement of any merchandise. New Jersey’s CFA is one of the strongest in the country. Violations of the CFA come with a heavy price – treble (triple) damages and attorneys’ fees to the successful plaintiff.
Additionally, federal law must always be a consideration. The Food and Drug Administration (“FDA”) continues to crack down on businesses that are marketing unproven medical claims. Last week, the FDA issued warning letters to 15 more companies that were advertising their CBD products in violation of the Food, Drug, and Cosmetic Act. The common theme of unlawful conduct was the companies touting the alleged therapeutic benefits of CBD. Furthermore, the FDA reiterated its stance that it is unable to conclude as of this time that CBD is generally regarded as safe for use in food.
The Practical Impact
Despite not having laws focused on advertising and marketing in New Jersey, running afoul of federal law and general consumer laws is something cannabis businesses cannot afford to do.
Receiving an FDA warning letter is not merely a friendly reminder. The recipient has a limited timeframe to correct the problem and must submit to the FDA a plan of action. Thereafter, the FDA will follow up to ensure compliance with the warning letter. If violations persist, that can lead to fines, penalties, and administrative hearings.
The civil side isn’t much prettier. Lawsuits against CBD companies for consumer fraud and misrepresentations are popping up everywhere. In Massachusetts, Global Widgets LLC (d/b/a Hemp Bombs) is being sued because its CBD products allegedly contain far less CBD than stated on the label. Similarly, in Florida, Diamond CBD has been sued for purportedly overstating the amount of CBD in their products. In Illinois and New York, we have seen companies being sued where their consumers have tested positive for THC, but the companies represented that their CBD products were THC-free. This trend is not going away, and CBD companies are on every plaintiff lawyer’s radar.
Defending an administrative action or a consumer fraud lawsuit not only involves a mountain of legal fees, but also consider the money and time revamping the company website, the monies spent on marketing materials that can no longer be used, and now the cost of new marketing materials.
The Basics to Avoid Problems
- It Is What It Is. If you say your product contains 10mg of CBD, be sure it has 10mg of CBD. If you say your product has less than .3 THC, be sure it has less than .3 THC (and have the documentation to support that claim).
- If You Can’t Prove It, Don’t Say It. Do you have a reliable study you can point to in order to substantiate your claim that using cannabis can combat inflammation? Is there consensus in the scientific community that taking CBD oil can reduce stress and anxiety? If you do not have the research to back up your claim, don’t make the claim. Keep in mind, even if you can substantiate a health-related claim, you are now entering the purview of the FDA, and likely selling an unapproved new drug.
- Know Your Advertising Statutes and Regulations. Do your labels have all the necessary markings and statements required under your applicable state statute? Is your packaging compliant with your state’s regulations? Have you confirmed that your Internet, radio, and TV ads are not being viewed by minors contrary to your state’s cannabis law? Before releasing any form of advertising, your company needs to consider the cannabis and consumer laws of each state where it will be sold and advertised.