The Proof Is In The Product:  NAD Recommends CBD Company Discontinue Claims

On April 29, the National Advertising Division (“NAD”) recommended that Talyoni Professional, LLC and its affiliate, Ecoco, Inc. (collectively “Talyoni”) discontinue express claims that the companies’ cosmetic and wellness products contain CBD, as well as product performance claims based on the presence of CBD in the products.  For those who may be unfamiliar, NAD, part of the Better Business Bureaus National Programs, is a self-regulatory forum where consumers, competitors, and NAD can challenge national advertising.  If a challenged advertiser refuses to participate, or if NAD recommends that an advertiser modify or discontinue advertising claims and the advertiser refuses to comply, NAD refers the matter to the appropriate regulatory agency.

NAD found that Talyoni failed to provide adequate substantiation that its products contained CBD.  NAD based its inquiry on the following claims displayed on Talyoni’s product packaging and online advertising:

Express Claims:

  • “The Talyoni Labs Cannabis Sativa collection is a comprehensive approach to personal care featuring the time-honored therapeutic benefits of CBD Oil.”
  • “A lush, refreshing, CBD-infused shampoo that smooths hair and hydrates with shea butter, olive & flaxseed oils.”
  • “Deeply nourishes, repairs and strengthens with CBD, olive and flaxseed oils.”

Packaging Claims:

  • Talyoni products contain 850MG per ounce of CBD.
  • Ecoco products contain 25 PPM of CBD.

As substantiation, Talyoni provided a certificate of analysis (“COA”) for the CBD oil ingredient used in its products, a description of the manufacturing specifications for the CBD oil, and a COA for a bottle of its CBD-infused shampoo showing it contained 0.0245% THC and 0.826% CBD.  Despite this evidence, NAD determined there was inadequate substantiation for the challenged express claims.

NAD explained that Talyoni could not rely on ingredient tests alone to support claims about its finished product. While the information provided by the supplier could provide a reasonable basis that the supplier’s CBD oil contained CBD, this was insufficient to show Talyoni’s finished product contained CBD.  Second, the NAD found that the results of one test for CBD on a single bottle of one product could not be imputed on the wide variety of products Talyoni markets.

So what’s the takeaway? Businesses marketing CBD products should have current COAs for their finished products, not just the CBD oil being added.  Moreover, it is crucial to have information regarding where tested product is sourced, whether it was obtained from inventory or from a store shelf, when it was produced, or any other data that would support the representativeness of the test.  As we’ve chronicled here, we anticipate that advertising challenges regarding CBD claims and content will only continue.  Companies that maintain proper documentation in the regular course of business will be best prepared to reduce risk of such challenges and respond when they happen.