As the popularity of CBD products continues to grow in the U.S., government agencies are now cracking down on how companies label and advertise their products. 

Multi-state operator Curaleaf Holdings, Inc. (CSE: CURA; OTCQX: CURLF) was just issued a letter of warning from the Food and Drug Administration (FDA) that five separate categories of their CBD products are in violation of current regulations. 

Those CBD items advertised on the company’s website run afoul of FDA rules that do not allow companies to advertise products that “diagnose, cure, mitigate, treat, or prevent” any specific disease without first going through a rigorous, years-long drug approval process. 

The company’s stock dropped more than a dollar as the news broke, dipping to a low of $6.98, and has since rebounded slightly to $7.15 a share as of Wednesday afternoon.

In particular, the five products listed below were found to contain language indicating they treated chronic pain, ADHD, depression, PTSD, eating disorders, Parkinson’s disease, Alzheimer’s disease, and could also lower cholesterol or kill breast cancer cells: 

  • CBD Lotion 
  • CBD Pain-Relief Patch 
  • CBD Tincture 
  • CBD Disposable Vape Pen 
  • Bido CBD for Pets 

In response to that letter of complaint, the company issued this statement today about changing language on packaging and social media posts: 

Curaleaf is committed to the highest standards of quality and compliance, and will work collaboratively with the FDA to resolve all issues in the agency’s letter. We can affirm that nothing in the letter raises any issues concerning the quality and consistency of any product or calls into question the high safety standards of the company’s cultivation and manufacturing processes.

The full FDA letter can be read here, which represents the first major action by the FDA to rein in CBD advertising and sales since an explosion of consumer popularity following the passage of the Farm Bill late last year. 

After a variety of companies across the cannabis industry begin to enter the CBD retail market at scale, the FDA held a roundtable meeting to discuss upcoming regulatory changes.  

Feedback from the meeting is expected to be utilized to craft specific guidelines on how CBD products can be advertised to avoid being considered unapproved new drugs that violate FDA rules. 

Earlier this month, Curaleaf recruited new Senior Vice President of Compliance Troy Morgan to assist the company in navigating FDA and state-level regulations. 

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