In a move that businesses producing and selling marijuana and CBD products should be paying close attention to, the Federal Trade Commission (“FTC”) and Food & Drug Administration (“FDA”) recently sent joint warning letters to four sellers of nicotine-laced e-liquids regarding their social media marketing practices. At issue? The information, or rather, lack thereof, shared in social media posts advertising the products.
The warning letters stated that social media influencers had advertised the e-liquids on Facebook, Instagram, and Twitter without including the required FDA warning that the products contain nicotine, an addictive chemical. The FDA asserted that, under the Food, Drug & Cosmetics Act, such an omission on behalf of the influencers is misbranding. For its part, the FTC found that the failure to disclose material health and safety risks in advertising is a violation of the FTC Act’s prohibition on unfair or deceptive practices.
The warning letters reference the related issue of social media influencers and the growing influence of their endorsements. In the FTC’s Endorsement Guides: What People Are Asking, guidelines state that businesses and social media influencers alike could be subject to liability if they fail to clearly and conspicuously disclose any “material connection” between the influencer and the seller that could potentially impact the credibility of the endorsement to consumers. Examples of material connections include business, family or personal relationships, cash payments, or free products.
The marijuana industry can take away some tips from these warning letters:
- Comply with all state and federal mandated advertising requirements when promoting products through social media.
- Maintain a written policy regarding social media marketing and make sure those who manage or participate in your social media efforts are trained and informed.
- Monitor what influencers and endorsers are saying and doing on your behalf.
What if you’ve hired an outside party to manage your marketing initiatives? You’re still liable. Such a relationship is considered an extension of your business and applicable laws and regulations still apply.
Mac Murray & Shuster recently hosted a webinar addressing a wide range of consumer protection issues marijuana businesses face, with particular focus on advertising and marketing to consumers. If you are interested in learning more, access to the webinar may be obtained by emailing Lauren Bernard at [email protected]
Mac Murray & Shuster is a nationally recognized firm focused on consumer protection and privacy regulatory compliance and litigation. With a team led by former state regulators, we provide comprehensive counsel to businesses of all sizes in highly regulated industries, including financial services, healthcare, teleservices, automotive, insurance, and consumer marketing.