New Data Calls Attention to the Dangers of the Online CBD Market and Consumer Confusion

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On October 21, 2019, LegitScript published findings from a study that was designed to assess the state of the online CBD market. This study looked at the state of regulatory compliance among vendors, the safety and accuracy of products, and issues regarding payment processing.

The study surveyed online vendors to determine the rate of compliance in three categories: types of products sold, jurisdictions shipped to, and marketing claims that they make. Among the 300 websites that were surveyed, a staggering 98 percent of them were not operating in compliance with the law in at least one of these categories.

The LegitScript study also tested CBD products from different manufacturers to compare their ingredients to those that were being advertised. Two-thirds of these products contained “significant deviations” from the advertised ingredients. Just under one-third of the tested products contained less CBD than was advertised. One product contained almost no CBD, while another contained more than double the advertised amount. In one instance, a tested product contained almost 19 times the allowable limit of lead. Another product contained over five times the allowable limit of ethylene oxide, which is a known carcinogen.

When the team of investigators reviewed the financial activity of the online vendors, they found one instance of transaction laundering, eight instances of off-shore payment processing, 19 instances of multilevel marketing, and two instances of negative option billing, which subscribes consumers to recurring services without their consent. These practices should give every consumer pause, and encourage them to think twice before purchasing a CBD product through an online vendor.

Continue reading to learn more about the study and download a copy of LegitScript’s report.

On October 28, 2019, the Grocery Manufacturers Association (GMA) released new data that describes consumers’ relationship with and understanding of CBD products. Broadly, 76 percent of consumers believe that CBD products are subject to federal oversight and regulation when current law does not provide for this. Despite this, 79 percent of the survey respondents believe that the federal government should regulate CBD products. About 60 percent of Americans are familiar with CBD products, but 39 percent believe that CBD is just another name for recreational cannabis. Alarmingly, over 50 percent of Americans mistakenly believe that CBD products are psychoactive. While consumer confidence in these products is currently low, 70 percent of survey respondents would feel more confident if they were manufactured and sold by well-known brands. Consumers would trust these brands to follow stricter safety and manufacturing standards, while being more experienced in the manufacturing industry.

Continue reading to learn more about the Grocery Manufacturer Association’s research.

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