Selling Hemp and CBD Online? Read this First!

16 Jan Selling Hemp and CBD Online? Read this First!

We recently received a request from a client to advise them on Shopify’s guidance on selling CBD products on its platform. Specifically, the first paragraph of the guidance states that “[y]ou should consult with an attorney to determine how and where you’re able to sell your product.” And that’s exactly what the client did – reached out and wanted to know exactly how and where they could sell their various products.

But, as our regular readers are well aware, there isn’t always a clear answer to that question. Unfortunately, that does not mean that sellers of these types of products should just wing it, given the proliferation of CBD online and in retail stores. That type of strategy could land you in hot water, with your accounts shut down, or your funds seized by your payment processor (as has happened to clients of ours). Shopify’s policy explicitly states:

Shopify can’t provide advice on what and where merchants can sell, but we recommend that merchants review and monitor federal, state, and local laws, as well as monitor updates from the Food and Drug Administration (FDA). The FDA site has helpful guidance on products that contain hemp and/or CBD in the United States.”

Shopify also requires all users to complete an Attestation for the Sale of Hemp and Hemp-Derived Products, for which it again urges users to consult with an attorney for legal guidance. Here is a sampling of the statements that Shopify requires all sellers of hemp and CBD to confirm:

1. I confirm that my Shopify store operates from a state where the listing and sale of hemp and hemp-derived products is permitted by applicable state and local law.
2. I confirm that all hemp and hemp-derived products listed or sold on my Shopify store contain not more than 0.3% tetrahydrocannabinol (THC) concentration on a dry weight basis or such lower percentage as required by applicable state and local law.
3. I confirm that no hemp or hemp-derived products listed or sold on my Shopify store are marketed as having any medicinal, disease-related or therapeutic benefit unless such claims have been approved by the Food and Drug Administration (FDA).
4. I confirm that all hemp and hemp-derived products listed or sold on my Shopify store have been sourced, processed, tested, labeled and marketed in compliance with all applicable federal, state and local laws.
5. I confirm that, if any hemp and/or hemp-derived products listed or sold on my Shopify store are intended for human or animal consumption via ingestion (including but not limited to food, food additive, beverage, dietary supplement, etc.):

(a) these products are permitted by applicable state law, and they comply with all applicable state and local requirements (including all labelling, manufacturing and testing standards);

(b) I have all applicable state and local licenses, approvals and certifications required to sell these products.

6. 6. I confirm the following:

(a) all hemp and hemp-derived products listed or sold on my Shopify store comply with all specific restrictions, license(s) and/or other standards applicable to the specific hemp-derived product being sold;

(b) all hemp and hemp-derived products listed or sold on my Shopify store are legal in every jurisdiction into which they are sold (including jurisdictions outside the US as applicable);

(c) any marketing claims associated with all hemp and hemp-derived products listed or sold on my Shopify store are permitted by the FDA for that specific product category (e.g. cosmetics, dietary supplements, etc.) and are true, accurate, and do not contain any false or misleading statements;

(d) I will notify Shopify in writing of any class action demand letter or FDA or Federal Trade Commission (FTC) enforcement action commenced against my business including any warning letters or other related correspondence within ten days of receipt;

(e) no hemp or hemp-derived products listed or sold on my Shopify store have been the subject of a recall or safety alert from an applicable regulatory authority. In the event of such a recall or safety alert, I will notify Shopify in writing within 48 hours of receipt and will immediately remove the applicable product(s) from my Shopify store and stop fulfilling, processing or receiving orders for such product(s);

(f) if my Shopify store lists or is selling hemp seeds, the seeds are not capable of germination;

(g) no hemp or hemp-derived products listed or sold on my Shopify store contain any substances in Schedules I – V of the Controlled Substances Act;

(h) if requested by Shopify at any time, I will provide further confirmation or documentation to ensure that each of my Shopify store, business, hemp and/or hemp-derived products are in compliance with all applicable laws, regulations and requirements; and

(i) I acknowledge and agree that Shopify may at any time suspend or terminate my account if I do not respond expeditiously to Shopify’s requests for confirmation or documentation or other communications, or if Shopify determines in its sole discretion that it is necessary in order to comply with any applicable law.

These guidelines are about as robust as can be, and any retailer would be taking a huge risk by selling products that do not align with Shopify’s guidelines. We highly recommend to all of our hemp and CBD clients that they have a solid grasp of the current state of the law in every jurisdiction in which they sell, and that they have a plan in place for keeping abreast of changes to those laws (because they’re changing on nearly a weekly basis). Our firm offers these types of compliance and legal monitoring services for hemp and CBD, and echoes Shopify’s recommendation that all hemp and CBD retailers consult with an attorney to make sure they can complete the required attestation in good faith.