CBD Co. Settles FTC Suit Over COVID-19, Cancer Cure Claims

By Jack Queen
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Law360 (April 29, 2020, 7:04 PM EDT) -- A California CBD and wellness company has agreed to stop marketing vitamin C and herbal extract supplements as able to treat, prevent or cure COVID-19, according to a Federal Trade Commission court filing.

If approved by a California federal court, the deal struck Tuesday between Whole Leaf Organics, its owner Marc Ching and the FTC will also bar the company from marketing three CBD supplements as effective cancer treatments.

"There's no proof that any product will prevent or treat COVID-19 or that any CBD product will treat cancer," Bureau of Consumer Protection Director Andrew Smith said in a statement Tuesday. "Let's be clear: Companies making these claims can look forward to an FTC lawsuit like this one."

The FTC sued Whole Leaf and Ching on April 24, saying they marketed Thrive herbal supplement capsules as "antiviral wellness boosters" that could treat, prevent or reduce the risk of COVID-19. The claims allegedly began in March, when the coronavirus pandemic kicked into high gear.

Whole Leaf's website claimed Thrive was "formulated with potent antiviral herbal extracts" and was the "perfect way to strengthen your immunity against pathogens like 'COVID-19,'" according to the complaint.

The complaint also cites three CBD supplements Whole Leaf began marketing in December 2018 as effective treatments for cancer without any scientific or clinical evidence. Whole Leaf's site falsely claimed the CBD capsules were "proven to be effective at reducing inflammation and minimizing the way cancer cells manipulate neighbor cells," according to the complaint.

The FTC leveled the same claims in a parallel administrative case, which seeks an order permanently barring the supposedly deceptive advertising for Thrive and the three CBD products: CBD-EX, CBD-RX and CBD-Max.

In November 2019, the U.S. Food and Drug Administration notified Whole Leaf that it was making unapproved new drug claims about the CBD products in violation of the Food, Drug, and Cosmetic Act. The FDA gave the company 15 days to drop the claims, but Whole Leaf failed to comply, according to an FTC press release.

Federal regulators and prosecutors have in recent weeks ramped up their enforcement efforts around bogus COVID-19 health claims, firing off warnings and cease and desist letters to companies allegedly making them. More than a half-dozen CBD companies have been snared in the effort.

Whole Leaf is the first company to be targeted by an FTC lawsuit for false or misleading COVID-19 claims, an agency spokesman confirmed. The FTC has so far sent more than 30 letters to companies allegedly peddling similar falsehoods.

Ching did not immediately respond to a request for comment Wednesday.

The FTC is represented in-house by John Jacobs and Tawana E. Davis.

Ching is representing himself.

The case is Federal Trade Commission v. Ching, case number 2:20-cv-03775, in U.S. District Court for the Central District of California.

--Editing by Adam LoBelia.

For a reprint of this article, please contact reprints@law360.com.

Attached Documents

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Case Information

Case Title

Federal Trade Commission v. Marc Ching


Case Number

2:20-cv-03775

Court

California Central

Nature of Suit

Other Statutory Actions

Judge

John A. Kronstadt

Date Filed

April 24, 2020

Government Agencies

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