What are the Legal Restrictions on Selling CBD

Anyone looking to start a CBD-focused business should be well aware of the legal restrictions surrounding CBD. CBD, properly known as cannabidiol, was made functionally legal by the 2018 Farm Bill, but since the passing of that bill a plethora of new rules and regulations have been codified.

At first glance, it may seem like there are too many regulations to keep track of, but staying in line with CBD’s legal restrictions is simpler than it looks. To help you stay on track as you venture into the CBD industry, we’ve assembled this helpful guide covering the basic restrictions surrounding CBD. In this guide we will cover the following legal restrictions:

Labeling Restrictions

When it comes to CBD restrictions, labeling laws have the potential to cause the most confusion. This is because labeling restrictions tend to come from state and local governments rather than the federal government.

To help you understand how different states approach labeling laws, here are three examples of the labeling laws in different states.

  • New Jersey: Labels for CBD products sold in New Jersey must indicate the amount of CBD, its THC percentage, and the percentage of the product that contains CBD extract.
  • California: Per California’s Proposition 65, all products known to cause reproductive harm or cancer must be clearly labeled as such. CBD itself has not been shown to be a carcinogen, but certain chemicals in vape smoke and some additives to CBD products require this label to be attached.
  • Utah: One of the strictest states when it comes to CBD, Utah requires all labels to contain the batch ID number, total quantity produced by that batch, batch date and expiration date, and a QR code or link to a downloadable certificate of analysis (COA).

In general, we recommend adhering to as many labeling regulations as possible, especially if you run your CBD business through the internet. There are no penalties for having a label that is more detailed than necessary. A detailed label actually protects you against breaking the regulations of any specific state, and a good wholesale CBD distributor should offer private and white label options that allow you to adjust your label as needed.

Once you’ve added all of the necessary details to your CBD product label, you should end up with something similar to the following image.

Advertising Restrictions

Many CBD advertising restrictions echo the general restrictions surrounding CBD. In places where the advertisement of CBD products is legal, ads must adhere to the following guidelines per the ruling of the FDA:

  • CBD cannot be sold or marketed as a dietary supplement.
  • CBD products cannot claim to treat, cure, prevent or diagnose any disease or serious ailment.

Outside of those two guidelines, it is legal to advertise CBD. But just because it is legal to advertise does not mean that it is simple to do so. For instance, if you run a CBD business online, you won’t have access to two of the largest online marketing platforms, Google and Facebook. These companies both consider CBD to be in the “high-risk” product category, and do not allow for the paid advertisement of these products.

To navigate this issue, we recommend searching for alternative methods of web marketing, such as search engine optimization (SEO). This marketing tactic focuses on improving the content and construction of your website so that it appears organically at or near the top of a search engine’s results page.

In addition to SEO, there are a few other marketing methods that are permitted for promoting CBD products. These include:

  • Affiliate marketing: Affiliate marketing is when an affiliate (person, network, channel, publication, etc.) makes a commission on whatever sales they directly influence. Most companies that engage in affiliate marketing work through an affiliate network, which helps them save time by reducing the number of affiliates they have to contact directly.
  • Influencer partnerships: Influencer marketing is similar to affiliate marketing, but is more personality driven. To engage in an influencer partnership, you would reach out to an influencer (typically a social media personality or minor celebrity) who aligns with the tone and image of your company. Once you have agreed to a partnership, the influencer will mention or show your products within their content to expand your audience and promote brand awareness.
  • Outdoor advertising: Traditional outdoor advertising, such as billboards or park benches, is legal at the federal level and permitted in most states. Before you move ahead with this form of advertising, make sure that it is permitted in the state where your business is located.
  • Programmatic ads: Programmatic advertisement refers to ads like commercials, podcast ad breaks, and mobile video commercials. Your mileage may vary when approaching digital ad platforms to advertise your products. For instance, you cannot advertise CBD through this method on YouTube, which is owned by Google. However there are numerous digital ad platforms that do allow ads for CBD products on their platform. As always, we recommend reviewing the laws of your state before pursuing this method of advertisement.

Age Restrictions

In order to purchase CBD, a customer must be at least 18 years old. When establishing your CBD business, ensure that all of your employees check the ID of all patrons to ensure you do not break any laws. We also recommend labeling all products with a statement indicating that these products are not intended for individuals under the age of 18 and setting up a sign on your door (or pop-up window on your site) that states something similar.

Medical Restrictions

When developing your labels and setting up your shop, take great care to avoid using any language that could be construed as equating CBD to medicine. While research has shown that CBD has a number of potential benefits, the FDA maintains that the evidence of CBD’s efficacy and its effects on the human body require further research in order to be determined.

This rule is especially important to keep in mind if you are opening a CBD-focused retail operation at a private practice. Even if you are a licensed healthcare professional, such as a chiropractor or physical therapist, you cannot claim that CBD can treat, cure, or diagnose any disease or ailment. You should only recommend CBD products alongside proven treatments.

State-by-State Restrictions

As with most controlled substances, the local laws regarding CBD vary widely from state to state. Certain states such as Washington, Oregon, and California (as well as other states where cannabis is legal) have more relaxed laws surrounding what types of CBD products can be sold. In those states, you can sell cannabis-derived CBD, which has yet to be permitted by the federal government.

Conversely, there are states where CBD laws are more restrictive than those laid out by the federal government. States like South Dakota and Idaho require that all CBD products contain 0% THC, as opposed to the federal limit of 0.3% THC. This ultimately restricts the range of products that can be sold, as it is very difficult to remove the trace amounts of THC from certain types of products.

For a more comprehensive look at state-by-state restrictions, read our guide to state labeling laws and restrictions.

Work with a CBD Distributor to Navigate CBD’s Legal Restrictions

The rules and regulations surrounding CBD may seem complex at first, but having a reputable wholesale CBD distributor by your side can drastically reduce the amount of research you have to do. At US Hemp Wholesale, we strictly adhere to the regulations laid out by the federal government, and have the knowledge to help guide you through the unique regulations of your state. Contact us today and fill out our vendor form to see how we can help you run your CBD business legally and efficiently.

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