Curaleaf Holdings Hit By FDA Warning Letter

Curaleaf Holdings (CSE: CURA) was slapped by the FDA this morning with a warning letter related to unsubstantiated medical claims for the use of cannabidiol (CBD). Shares traded sharply downward on the announcement of the Food and Drug Administration issuing a warning letter to the firm, falling from $10.57 at the open to as low as $8.97.

The warning letter is specifically related to a number of claims made by Curaleaf’s digital marketing arm on the firms website as well as its social media accounts. Classified as “Unapproved New and Misbranded Human Drug Products” within the warning letter, the claims relate to all of Curaleaf’s CBD based products, including lotions, tinctures, patches, and disposable vape pens.

Specifically, Curaleaf refers to a number of these products as being intended for use with chronic pain, diabetes, anxiety, ADHD, alzheimers, cancer, and a number of other diseases. While many will point out that studies have been conducted that reveal cannabis may be effective at these treatments, or that other countries recognize the use of cannabis for some or all of these purposes, the FDA does not currently recognize cannabis or any of its derivatives as being effective for these diseases. Without the FDA recognizing CBD as being effective for these products, it in effect means that Curaleaf is making unsubstantiated health claims on products intended for sale within the USA.

Other branding and use violations are also being performed by Curaleaf Holdings as per the FDA, a summary of which includes:

  • “CBD Lotion,” “CBD Pain-Relief Patch,” “CBD Tincture,” and “CBD Disposable Vape Pen” products are unapproved new drugs sold in violation of sections 505(a) and 301(d) of the Federal Food, Drug, and Cosmetic Act (the FD&C Act), 21 U.S.C. 355(a) and 331(d).
  • Furthermore, these products are misbranded drugs under section 502(f)(1) of the FD&C Act, 21 U.S.C. 352(f)(1).
  • FDA has also determined that “Bido CBD for Pets” products are unapproved new animal drugs that are unsafe under section 512(a) of the FD&C Act, 21 U.S.C. 360b(a), and adulterated under section 501(a)(5) of the FD&C Act, 21 U.S.C. 351(a)(5).
  • Introducing or delivering these products for introduction into interstate commerce for such uses violates the FD&C Act.

While the FDA has hit companies previously for CBD claims, this is the first time that a public company has been hit under the recent changes to the classification of hemp-based CBD. However, these claims are made frequently enough that the Food and Drug Administration has compiled a resource listing all warning letters issued in related to cannabidiol, which stretches back to 2015. Curaleaf has yet to be added to this list of operators.

While Curaleaf Holdings is one of the first multi state operators to be hit by the FDA for making such claims, it is not expected to be the last. Now that the initial hammer has dropped, industry followers are expecting more warning letters to follow suit in relation to claims made for cannabidiol based products. Many industry competitors have witnessed a sharp pullback in the market today on the news, including Charlotte’s Web Holdings which is currently down 5% on the day.

The full text of the FDA warning letter to Curaleaf Holdings can be found here.

Curaleaf Holdings has fifteen days to respond to the Food and Drug Administration on actions taken to correct the errors.


Information for this briefing was found via the FDA and Curaleaf Holdings. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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