October 2019

SAFE Banking Act Passes House, Moves to Senate

Since the Secure and Fair Enforcement (SAFE) Banking Act (the “Act”) found bipartisan support in the House Financial Services Committee back in March,[1] the industry has been waiting for even the slightest sign of its legislative progress. Fortunately — on September 25, 2019 — the U.S. House of Representatives formally passed the SAFE Banking Act of 2019,[2] which marks the first standalone cannabis reform bill to ever pass the House. The Act, if codified into law, would unshackle the cannabis industry and open access to insurance, traditional banks and other imperative financial service companies.

Even as states have made marked progress on cannabis legalization, the federal government’s regulatory regime continues to burden the industry, including with respect to banking and similar services. Two primary issues plague the cannabis industry’s access to meaningful  financial services: (i) any business operating pursuant to a state law, whether it be a financial institution, real estate company, or any other ancillary operation working in connection with cannabis industry, is subject to risk of being construed as aiding or abetting a criminal conspiracy in violation of the Controlled Substance Act since those services do, in fact, facilitate and promote the marijuana industry; and … Keep reading

Got "Reliable and Scientific Evidence" on CBD? A Close Look into the FTC's Stance on CBD-Related Health Claims and Response From Industry Participants

Over the past seven months, and just as recently as three weeks ago, the Federal Trade Commission (“FTC”) has released several warning letters to businesses selling CBD products. These letters concern the FTC’s review of potential violations of the Federal Trade Commission Act of 1914, §§ 41-58, as amended, (the “FTC Act”) made in websites and marketing materials of CBD-related businesses. Participants throughout the CBD industry may take prudence in reviewing not only these health claims called to question by the FTC, but also by how these other industry participants have responded to the FTC’s warning letters.

The FTC and the CRS Evidence Standard

The FTC is an independent federal agency centered on maintaining marketplace competition that benefits both businesses and consumers. The FTC identifies its purpose as, “seek[ing] to protect consumers by enforcing laws and rules that promote truth in advertising and fair business practices, and by educating consumers and businesses about their rights and responsibilities.” FTC Warning Letter to 4Bush Holdings, LLC, dated September 9, 2019.

In its warning letters, the FTC expressed concerns with companies “making false or unsubstantiated advertising claims about the health benefits of products containing cannabidiol (CBD).” The FTC … Keep reading