The Food and Drug Administration issued a warning letter to Curaleaf for allegedly "illegally selling" CBD products with "unsubstantiated claims" that the products treat cancer, Alzheimer's disease, opioid withdrawal, pain and pet anxiety.
Curaleaf shares fell more than 6% in trading Tuesday after the news broke.
Congress in December legalized CBD, or cannabidiol, derived from hemp. The FDA last year approved Epidiolex, a drug derived from CBD to treat severe forms of childhood epilepsy. Other than that, the FDA has not approved any CBD drugs and prohibits companies from making unproven claims about CBD and its purported benefits.
The agency is considering opening up new pathways for CBD products to enter the market as its popularity grows. However, the FDA has said it will continue to take action against companies making "egregious" health claims.
"As we examine potential regulatory pathways for the lawful marketing of products containing cannabis and cannabis-derived compounds like CBD, protecting and promoting public health remains our top priority," acting FDA Commissioner Ned Sharpless said in a statement.
"Selling unapproved products with unsubstantiated therapeutic claims — such as claims that CBD products can treat serious diseases and conditions — can put patients and consumers at risk by leading them to put off important medical care," he said.
The FDA has issued roughly two dozen warning letters to companies for allegedly making unproven health claims about CBD products. This one against Curaleaf is notable because the company is a leading player in the booming CBD industry.
The FDA said Curaleaf made "unfounded claims about more than a dozen different CBD products" on its product webpages, online store and social media websites. Some of the claims it highlighted include "CBD has been demonstrated to have properties that counteract the growth of [and/or] spread of cancer" and "CBD has been linked to the effective treatment of Alzheimer's disease …."
"Today's action demonstrates that the agency stands firm in its commitment to continue monitoring the marketplace and protecting the public health by taking action as needed against companies that deceive consumers and put them at risk by illegally selling products marketed for therapeutic uses for which they are not approved, such as those claiming to treat cancer or Alzheimer's disease," Sharpless said.
Curaleaf has 15 days to respond to the FDA's concerns. Failure to correct the violations could result in legal action, such as product seizure or injunction, the agency said.
A Curaleaf spokeswoman said its legal counsel is currently reviewing the letter and the company will respond within the FDA-mandated time frame.
"We intend to work collaboratively with FDA to address the issues in the letter," the spokeswoman said. "Curaleaf is fully committed to complying with FDA requirements for all of the products that it markets."
A high-level working group at the FDA is evaluating its CBD policies. FDA Principal Deputy Commissioner Amy Abernethy in a statement said the group plans to report on its progress "by early this fall."