While a good many of these faux celebrity endorsement have come from scammers, a few have involved actual CBD companies.

Among the recent instances of celebrities publicly denouncing use of their likeness or phony endorsements for CBD products:

• Tom Brady. The pro-footballer has flatly denied his purported endorsement of CBD and keto gummies, as depicted in a number of approved Facebook ads – some of them sexually-explicit and clearly scams.
• Phil McGraw. The name and likeness of “Dr. Phil” was used by a scam website that led users to believe they were on the Fox News website, where there was an ad indicating his endorsement of CBD gummies. One article even stated McGraw and Brady were teaming up in their endorsement of CBD gummies. They had not.
• Dolly Parton. The 77-year-old country music singer/songwriter issued a statement saying that, contrary to circulated claims on various social media ads, she had never been associated with or endorsed any keto oils or CBD product.
• Keanu Reeves. “The Matrix” actor was compelled to release a statement last year clarifying that he had never endorsed any CBD gummy or CBD oil product, and had never been interviewed by any CBD company for its website.

Two recent cases that have led to litigation involved include “Jeopardy!” host Mayim Bialik and actor Clint Eastwood (and the company that owns the right to his likeness).

Bialik’s lawsuit lists 32 unnamed companies (identified by the IP addresses, mostly situated in the Dominican Republic, France, and India), and alleges they’re illegally using her likeness to promote fake CBD oil and CBD gummies. Bialik says she’s never endorsed the product, never given permission for her name/image to be used, and has never been compensated for its use by these operators.

Eastwood, meanwhile, has had two substantial successes on the legal front for illegal use of his likeness to sell CBD products. Both cases were initially filed in federal court in Los Angeles against three CBD manufacturers and marketers. The nonagenarian’s image was reportedly featured in online articles falsely claiming that he endorsed these products.

One of the companies, based in Lithuania, was ordered in 2021 to pay $6.1 million for unauthorized use of Eastwood’s name and likeness, as well as attorney’s fees. An injunction was imposed to block future use of his name and likeness for their products.

Then last year, Eastwood was awarded $2 million in a lawsuit against another CBD retailer and a Florida-based internet marketing service that purportedly used his name and image without permission to promote its products in an online magazine. That page contained an article his name and made-up quotes that indicated his support for CBD in general and the defendant’s products in particular.

Eastwood said he’s never endorsed cannabis, and in fact has only ever agreed to one endorsement in his whole career: A 2012 Super Bowl TV ad highlighting the nation’s economic gains since the previous recession.

Bottom line: Don’t make the mistake of thinking A-listers won’t notice if you swipe their likeness for online sales. It’s a high-risk move that could cost your company dearly. If you are seeking an endorsement of some kind from a celebrity, go through the proper channels, ensure they’re fairly compensated, and have your Los Angeles cannabis company attorney review your contract.

The Los Angeles CANNABIS LAW Group represents growers, dispensaries, ancillary companies, patients, doctors and those facing marijuana charges. Call us at 949-375-4734.

Additional Resources:

Clint Eastwood Wins $6.1 Million CBD Lawsuit, Oct. 3, 2021, by Sarah Bahr, The New York Times

More Blog Entries:

Breakdown of U.S. Rules for CBD Cosmetics by L.A. Cannabis Business Lawyer, April 16, 2023, Los Angeles CBD Lawyer Blog

But what will it mean for the CBD side of things when/if marijuana products of all (or at least higher) THC levels becomes legal? Specifically, we’re talking about legalization of recreational marijuana. Here in California, as well as in 17 other states, Washington, D.C. and Guam, that’s already the reality. Yet CBD businesses continue not only to operate, but to thrive.

Our CBD business lawyers recognize the retail landscape may inevitably shift once recreational marijuana becomes legal, but we also believe in the strong likelihood the two can co-exist. Not everyone wants high-THC products – specifically in the realm of pet products, beauty topicals, and cosmetics. Plus, there are a fair number of people who aren’t heavy users of THC, but may still want to indulge occasionally in a way that is safe.

Recent analysis reveal that the legal recreational marijuana market dwarfs the CBD market – $50 billion to $8 billion. Still, neither sector’s size is anything to sneeze at.

In shops that sell high-THC cannabis products, CBD product sales have fallen in recent years (at least so far as California goes). But it’s our theory that when adult use recreational marijuana becomes legal, there will be an increase in sales for both – particularly in mature markets.

The question is how the merge will occur: Will we be more likely to see low-THC products in marijuana stores primarily selling high-THC products – or visa versa. Even if high-THC retailers are the ones to thrive, it’s likely to be CBD retailers who excel in digital sales.

Beyond this: What will be the role of any dispensary when/if marijuana becomes legal at the federal level? Would anyone go to a dispensary if they could purchase quality CBD or cannabis at a gas station? It’s true that cannabis-specific retailing is hyper-centralized as a result of regulation, but our thinking is that there would still be a need for CBD and cannabis dispensaries – just as sales of alcohol have continued at liquor stores and wineries.

Cannabis companies of all stripes may want to start thinking of ways to protect their future by investing in brand development. This approach would include:

• Diversifying product offerings.
• Carving a name for yourself in the customer service sphere.
• Providing valuable education to new and existing customers.
• Offer a premium quality product.

Think about it like pizza. It’s easy enough to make, and you can find a pizza joint in virtually any city in America – not to mention in the grocer’s freezer section. But quality pizza? Wood-fired pizza? Premium ingredients? An Italian dining experience? These are all things that people seek out – and it’s how some restaurants have managed to differentiate themselves, even in crowded markets. You build up your brand value, brand loyalty, and brand base. This is true for both CBD and high-THC retailers.

Every step of the way, it will be crucial for companies to consider the legality of their branding, their business practices, and their growth. Our dedicated Los Angeles CBD lawyers are here to help.

The Los Angeles CANNABIS LAW Group represents growers, dispensaries, ancillary companies, patients, doctors and those facing marijuana charges. Call us at 949-375-4734.

Additional Resources:

As more states legalize marijuana, CBD retailers face an identity crisis, April 29, 2022, By Kristen Nichols, Hemp Editor, Marijuana Business Daily

Labeling lawsuits against CBD and THC product makers are increasing. As our Los Angeles cannabis attorneys can explain, it is imperative that companies ensure the level of THC and CBD in their products aligns with what is advertised. In this case, the lawsuit alleged the potency of these compounds in the products were “drastically” different from what was publicly claimed.

FDA Studies CBD, THC Product Contents

Recently, the U.S. Food and Drug Administration submitted a letter to Congress indicating numerous CBD products that the company tested that contained far more – and sometimes less – than the amount of cannabidiol that was advertised. Some of the testing revealed certain products contained THC (the psychoactive compound in cannabis) that wasn’t supposed to be in them.

Of the more than 100 products (tinctures, oils, capsules, edibles, drinks, and pet products) the FDA tested prior to the report, 18 had less than 80 percent of the CBD they were advertised to have. Slightly less than half were within 20 percent of the amount of CBD advertised. A significant number – 38 – had more than 120 percent of the CBD advertised. Many also contained trace amounts of THC, though they weren’t supposed to contain any.

The FDA chose a random sample of products to test from a pool of internet and trade journal advertisements, companies that had previously been cited by the FDA for making health-related claims about their CBD products and participants in various industry events. The testing size was limited, a fact the FDA noted as well and pointed to as cause for a more intensive, longitudinal study.

Hemp and CBD industry insiders are concerned by the findings, but know that as a whole, providers and manufacturers hold themselves to high standards. Part of the problem is the lack of FDA regulation for CBD and hemp products, which has resulted in a patchwork of state-level rules and enforcement. That may soon happen, as members of the House Appropriations Committee has allocated $5 million for the federal food and drug regulator to continue its review of CBD products, expressing concern for misleading health claims.

Last year, with assistance from researchers at the University of Mississippi, the FDA completed analysis on cosmetic products containing hemp, finding that a dozen of more than 100 tested contained THC – even though that element wasn’t specified in the label. A couple of those products contained 120 percent more CBD than advertised.

While there is little question the industry requires more work to ensure products with CBD and THC meet product labeling guidelines, one bright spot worth noting is that in the FDA’s testing for heavy metals such as cadmium, mercury, lead and arsenic, none were found in any quantity that posed a significant health concern to consumers.

Potency Rules for California Cannabis Products

California law has established testing regulations to ensure the package labeling matches the potency of each product. The law requires products to be tested for THC, THCA, CBD, CBDA, CBT and CBN. The potency level is considered “passing” if it is within +/- 15 percent of the amount indicated on the label.

This is in addition to testing for solvents, pesticides, microbiological impurities and heavy metals.

California law limits the amount of THC in edible cannabis products for recreational use to 100 milligrams. These limits are not in place for medical marijuana products, which require a medical marijuana ID card to purchase.

Consult with an experienced cannabis business attorney in L.A. to ensure your company is doing everything possible to meet the potency, packaging and label requirements.

The Los Angeles CANNABIS LAW Group represents growers, dispensaries, ancillary companies, patients, doctors and those facing marijuana charges. Call us at 949-375-4734.

Additional Resources:

Sampling Study of the Current Cannabidiol Marketplace to Determine the Extent That Products are Mislabeled or Adulterated, 2020, FDA

But our Los Angeles CBD lawyers know that those in the hemp processing business still need to use special care. The 2018 Farm Bill did in fact legalize hemp, its derivatives and extracts. Yet nothing in the bill expressly covers processing of hemp, and the new DEA regulations don’t address it either. This creates some concern that hemp processing companies may face criminal actions because the chemical effect of the hemp extraction process can push the THC concentration above the legal limit.

Hemp production is regulated by the U.S. Food and Drug Administration, which requires the plant to be tested for THC content before it’s harvested. But the USDA doesn’t oversee hemp processing. Some state governments do regulate hemp processing, issuing licenses and implementing certain standards. In California, Cal. Food and Agric. Code §81000 to 81010 allows for a commercial hemp program that’s overseen by the Industrial Hemp Advisory Board, a subsidiary within the state’s Department of Food and Agriculture. There is also a registration for seed breeders.

The fact that the 2018 federal law glosses over hemp processing is important to understanding why the DEA’s interim rule is inconsistent and raises some red flags.

The Farm Bill defined hemp as a cannabis plant with a THC concentration of less than 0.3 percent based on dry weight. The statute also recognizes extracts, derivatives and hemp cannabinoids as being legal. Logically, that would lead one to think it’s lawful to process them. However, the DEA rule does not. What it fails to consider is that creating derivative hemp products requires a process called extraction. Extraction inevitably increases the amount of THC, at least temporarily. There’s virtually no way to control this until it can be diluted to the required levels. What this means is that at least during part of the extraction process, hemp production businesses would be in possession of a Schedule I narcotic.

If the DEA were only stipulating that the end product couldn’t have more than 0.3 percent THC, that wouldn’t be cause for much concern. And the 2018 Farm Bill expressly states that derivatives and extracts of hemp are to be removed from the Controlled Substances Act. But the process of turning hemp into extracts inevitably results in a higher level of THC, which in turn means that either deliberately or unintentionally, hemp processing companies could find themselves in violation of the law. If the DEA chooses to pursue criminal charges against hemp processing companies, this regulatory gap may give them the authority to do that.

Because this is an interim rule, effective Aug. 21st, the DEA allows submission of public comment until Oct. 20. Still, it is considered the law until it expires, is amended or made permanent.

Our hemp and CBD lawyers in Los Angeles will continue to monitor this situation, and are prepared to help any hemp processing companies fight criminal charges, should they arise.

The Los Angeles CANNABIS LAW Group represents growers, dispensaries, ancillary companies, patients, doctors and those facing marijuana charges. Call us at 949-375-4734.

Additional Resources:

DEA Proposes Hemp And CBD Rules To Comply With Crop’s Legalization, Aug. 20, 2020, By Kyle Jaeger, Marijuana Moment