Regulatory Compliance for Cosmetics, Nutrition, and Cannabis Companies – Part 2

It’s natural to want to feel and look your best. Cosmetics have been helping women (and men) look and feel younger. Dietary supplements and other nutritional products help people stay active and fit. Cannabis product makers and sellers claims all types of benefits for their products.

Every one of these businesses needs legal help to help their businesses generate as much income as possible while providing valuable services and resources to consumers. These companies also need legal help because there are numerous federal, state, and local laws and regulations that need to be followed. Failure to comply with governing regulations can result in warning letters, orders to stop making or selling products, fines and penalties. Violations of some laws may result in criminal charges.

FTC honest and deceptive practice concerns

In addition to various FDA regulations, discussed in part 1, there are FTC compliance issues for cosmetics, dietary supplements, and cannabis products.

Generally, FDA has the primary jurisdiction regarding “labeling, safety and purity of a given food, dietary supplement, medical device, or cosmetic.” In addition to FDA oversight, the Federal Trade Commission (FTC) has overlapping jurisdiction of both cosmetics and dietary supplements. The FTC focuses primarily on whether the advertising/marketing is truthful or whether it’s false and misleading. This review includes more than just your website, your social medica posts, and your print marketing. The review includes the validity of testimonials and endorsements and other types of advertising.

The FTC, like FDA, will also review your labeling. There are nuanced labeling rules that must be met depending on how the product is packaged. A seemingly minor violation can lead to major headaches.

We advise clients on BOTH FDA and FTC compliance issues.

Additional FDA claim issues – for cosmetics, dietary supplements, and cannabis products

We review the following aspects of your product promotions to see if FDA is likely to raise concerns:

• Product names. Names that make a claim about treating or curing diseases, that make health or quasi-health claims, or that make nutrient claims may lead to FDA oversight. One of our tasks is to help recognize invalid names and to help clients come up with names that are more likely to satisfy the Food and Drug Administration.
• Product promotions. We help analyze your product labels, website, social media and print materials for red flags and to help your company create more suitable names – and to make legally compliant structure-function claims.
• Product indicators. For example, a simple statement like “for relief of —–” may raise concerns.

Misbranding of cosmetics, dietary supplements, nutritional products, and cannabis products

We discussed misbranding in our Part 1 discussion of cosmetics – but what does misbranding mean?

Generally, Section 602 of the federal Food, Drug & Cosmetic Act (FD&C Act) and other sections provide that an article is considered misbranded if:

• Its labeling is false or misleading in any particular
• Its label does not include all required information
• The required information is not adequately prominent and conspicuous
• Its container is so made, formed, or filled as to be misleading
• It is a color additive, other than a hair dye, that does not conform to applicable regulations issued under section 721 of the FD&C ACT.

Misbranding may also occur if:

• A product’s “packaging or labeling is in violation of an applicable regulation issued pursuant to section 3 or 4 of the poison prevention packaging Act of 1970.” (FD&C ACT, sec. 602)
• The company fails to comply with Sec. 704(a) of FD&C Act and FDA website on good manufacturing practice. “Rigorous adherence to good manufacturing practice minimizes the risk of adulteration or misbranding of dietary supplements and cosmetics.”
• A cosmetic (and other covered products) fail to comply with the FPLA are considered misbranded under the Fair Packaging and Labeling Act (FPLA). The FPLA requires that products have ingredient declarations so consumers can make informed decision about the products consumers purchase.

Claims that aren’t backed by competent scientific substantiation may give rise to misbranding concerns.

In many cases, the FD&C ACT gives FDA the authority to enter your facilities and inspect the equipment, materials, containers, and labels.

Adulteration of cosmetics, dietary supplements, nutritional products, and cannabis products

Cosmetics, dietary supplements, cannabis products, and other products may become adulterated (and thus subject to regulatory action) – due to the ingredients, contaminants, process, packaging, or shipping and handling. There are precise definitions. Products generally need to be involved in interstate commerce for adulteration and misbranding regulations to apply. Otherwise, state laws apply.

The Federal Food, Drug, and Cosmetic Act (FD&C Act) prohibits, among other things,

• “The introduction or delivery for introduction into interstate commerce of any food, drug, device, or cosmetic that is adulterated or misbranded” [FD&C Act, sec. 301(a); 21 U.S.C. 331(a)]”
• “The adulteration or misbranding of any food, drug, device or cosmetic in interstate commerce” [FD&C Act, sec. 301(b); 21 U.S.C. 331(b)]”

What makes a cosmetic adulterated?

Section 601 of the FD&C Act describes what causes a cosmetic to be considered adulterated:

“A cosmetic shall be deemed to be adulterated—

• If it bears or contains any poisonous or deleterious substance which may render it injurious to users under the conditions of use prescribed in the labeling thereof, or, under such conditions of use that are customary or usual, except that this provision shall not apply to coal-tar hair dye, the label of which bears the following legend conspicuously displayed thereon: “Caution-This product contains ingredients which may cause skin irritation on certain individuals and a preliminary test according to accompanying directions should first be made. This product must not be used for dyeing the eyelashes or eyebrows; to do so may cause blindness.”, and the labeling of which bears adequate directions for such preliminary testing. For the purposes of this paragraph and paragraph (e) the term “hair dye” shall not include eyelash dyes or eyebrow dyes.
• If it consists in whole or in part of any filthy, putrid, or decomposed substance.
• If it has been prepared, packed, or held under insanitary conditions whereby it may have become contaminated with filth, or whereby it may have been rendered injurious to health.
• If its container is composed, in whole or in part, of any poisonous or deleterious substance which may render the contents injurious to health.
• If it is not a hair dye and it is, or it bears or contains, a color additive which is unsafe within the meaning of section 721(a).” (Section 721(a) of the FD&C Act [21 U.S.C. 379(a)], states the circumstances under which color additives are deemed unsafe.”

What makes a dietary supplement adulterated?

According to federal law, a dietary supplement or product that contains a dietary ingredient is adulterated if it:

• Presents a significant or unreasonable risk of illness or injury under—

• 1. Conditions of use recommended or suggested in labeling, or
  2. If no conditions of use are suggested or recommended in the labeling, under ordinary conditions of use
• Is a new dietary ingredient for which there is inadequate information to provide reasonable assurance that such ingredient does not present a significant or unreasonable risk of illness or injury
• The Secretary declares to pose an imminent hazard to public health or safety (with some exceptions)
• Is or contains a dietary ingredient that renders it adulterated under paragraph (a)(1) under the conditions of use recommended or suggested in the labeling of such dietary supplement.

Cannabis (CBD) products

Due to the federal Farm Bill and state laws that have legalized marijuana for medical and/or recreational use (depending on the state), the cannabis industry is exploding. It’s expected to generate nearly $50 billion by 2026.

While FDA recognizes that cannabis products are being made and sold on a wide scale, especially after the passage of the federal Farm Bill. The Farm Bill made it easier to make cannabis-based products using hemp (by removing hemp from the Controlled Substances Act). The Farm Bill, however, left the federal oversight of cannabis products to FDA review. To date, “the agency has not approved a marketing application for cannabis for the treatment of any disease or condition. FDA has, however, approved one cannabis-derived and three cannabis-related drug products. These approved products are only available with a prescription from a licensed healthcare provider.

THC or CBD products cannot be sold as dietary supplements because the products don’t meet the definition.

At Cohen Healthcare Law Group, PC, we represent:

• Cannabis cooperatives
• Cannabis cultivators
• Cannabis distributors
• Cannabis manufacturers
• Cannabis retailers
• Investors in cannabis ventures
• Medical Marijuana dispensaries
• Physicians who recommend medical marijuana or cannabis
• Testing labs

We counsel these companies on FDA and FTC compliance – and other federal and state compliance issues. We also help cannabis clients with business formation and operation issues.

Some of the types of advice and review we discuss with our cannabis clients includes:

• Counseling on corporate formation of companies offering cannabis products
• Corporation formation of MSOs pioneering cannabis clinics in ventures that will involve clinicians
• Drafting M&A documents for acquisition and sale of cannabis ventures
• Licensing of intellectual property (IP) involving cannabis
• Other contract drafting, review, and negotiation in the MMJ industry
• Real estate issues, including land use and zoning, and permits
• Complying with the complex laws and regulations governing the cannabis industry.

In addition to federal and state laws, many cities and counties have local cannabis regulations.

Some of the many cannabis related topics, we’ve written about include:

• Claims and conduct that may lead to cannabis products being classified as a drug
• Claims and conduct that may lead to cannabis products being categorized as adulterated or misbranded
• When cannabis may be categorized as a dietary supplement or a food product
• Marketing and advertising claims that may result in FDA and FTC warning letters
• The current legal uses for cannabis products
• Labeling and package requirements for cannabis products
• The various types of cannabis products creams, oils, and edibles
• The FDA’s position on selling products that contain THC or CBD as dietary supplements?
• FDA warning letters to CBD companies
• State CBD laws
• Why companies are rushing to make and sell products with CBD and THC
• Licensing marijuana products for medical use
• Many other CBD-related topics

Skilled healthcare lawyers explain the laws and regulations that apply to any companies involved in the business or use of cosmetics, dietary supplements, cannabis products, and other related products. We review if your products might be deemed “misbranded” or “adulterated” by FDA authorities. We review whether your website, social media, and print materials may be flagged for misleading or deceptive claims. We help you take proactive and responsive steps to help show your company or practice is complying with federal and state regulations. Our lawyers also help your company prepare your business structure and operations to help your business succeed.

Contact Cohen Healthcare Law Group, PC to review the regulatory compliance and business needs of your cosmetic, dietary supplement, or cannabis business. Our experienced healthcare attorneys advise manufacturers, distributors, retailers, and other businesses about their federal and state regulatory requirements.