By Cait Curley and Asa Waldstein
On a calm warm Friday evening in Raleigh, NC after day 2 of the 3rd Annual Southern Hemp Expo, LTH editor Steve Hoffman and hemp advocate and influencer Cait Curley were sitting in the courtyard outside of the Marriott host hotel when Asa Waldstein walked up and joined them. From there, a conversation began between Cait and Asa around the topic of influencers and brand affiliates talking about products on social media, and the potential liabilities that exist. The following Q&A between Cait and Asa was born from this Friday evening meetup and provides a beginning overview of some do’s and don’ts when it comes to influencers and brand affiliates talking about products on the internet.
As the Food and Drug Administration cracks down on medical claims made by CBD companies, hemp social media influencers must also watch how they promote hemp products.
Q: Average Jane picked up a CBD product and is writing a testimonial on the Instagram page. Where does she stand?
A consumer can purchase a product and essentially say what they want on their own social media pages. This becomes a claim when a company uses this post for marketing purposes by re-posting it or using the testimonial on their website or advertising campaigns.
Q: Affiliates: they have links to brands – they get a cut of sales, where do they stand talking about products on social media and in blogs?
Affiliates commonly build content to attract people to their site which then hyperlinks to a shopping cart for purchasing the mentioned product. Affiliates get a cut of sales which can be 30%, so you can see the incentive for sensationalized content. Affiliate relationships should also be disclosed clearly and conspicuously. Affiliates are responsible for the accuracy and compliance of their statements. The difference between Average Jane and affiliates is the material connection. If there is no material connection, including free product and employee/family relationships, consumers can say pretty much anything about products they like. Affiliates do attract warning letters as we see in this warning letter to AgroTerra, Ltd. dba Patriot Hemp Company. This company was making Coronavirus product claims which linked to an Amazon storefront. A few years ago, affiliate warning letters were nearly nonexistent. Now regulators are savvy and are no long tolerating claims for material connection.
Q: Paid influencers – being paid directly by the brands – where do they stand with discussing products they are promoting?
Influencers that are compensated in any way, including free products, must follow the same rules as affiliates and should not make claims. They are also required to disclose the commercial relationship with something like #Ad or a Thanks for the free product statement.
Q: What are the responsibilities of the influencer to make sure statements/claims they make are accurate?
The influencer is responsible for ensuring their statements are accurate and not misleading. Influencers should use caution if a brand suggests they use disease words such as depression, anxiety, and PTSD. This would be a sign the brand is not compliant and is a poor long-term partner in my opinion. If a brand is ok making high-risk claims this is a red flag of deeper compliance issues that may include inaccurate labeling or inadvertent out-of-compliance THC. Influencers should also confirm they are not using intellectual property, trademarks, or copyrighted materials which can lead to lawsuits.
Q: Has it ever happened that the FDA/FTC sent a warning letter to an influencer or a third party marketer? Cases of note?
Remember the Fyre Festival that was promoted by glamorous models? 100 of these influencers were sued in a class-action lawsuit for failing to disclose they were being paid. This is a great example of how certain FTC regulations, in my opinion, are designed to protect the consumer from deceptive marketing practices. The FTC can also levy fines on influencers which seem to be directed at the macro influencer category. The FDA and FTC have sent joint warning letters to influencers. Here is an example where influencers for E-liquids were issued warning letters. Here are some reasons to avoid warning letters.
Other than trademark lawsuits, admittedly, there is somewhat limited enforcement of regular influencers that are not celebrities. As we see by the Fyre Festival example it is better to follow the rules as one never knows when it will come back to bite.
Q: If you are talking about the healing properties of a plant and are passionate — where are you crossing the line; how do you stay within the line?
Here is an example of a lower-risk way to talk about passion and properties of the plant, if accurate. I love this plant; it changed my life, and I am so grateful for all the benefits it has brought me. I no longer lay in bed dreading to get up and face the day. I now jump out of bed, head to the gym, and have a smile on my face when I walk into work. Thanks #HappyPlant for being a great ally!
This same post would cross the line into a claim with an uncompliant hashtag such as #AnxietyRelief or #NoMasDepression. Using disease-oriented “buzzwords” in any format is the best way to attract unwanted attention.
Q: What is the responsibility of the brand to ensure that their paid affiliates, brand ambassadors, and/or influencers are within compliance?
An influencer code of conduct including not making claims should be contained in a contract. The brand does have some responsibility to ensure its affiliates, ambassadors, and influencers are following the rules. One idea is for the brand to conduct a documented monthly or quarterly review. If violations are found this should be communicated and potential repercussions may be required, as noted in the contract agreement.
Q: Are there sample guidelines and/or contracts for professional/paid influencers?
All influencer content must be truthful and not misleading. For example, an influencer cannot say they love a product if they have not used it. Also, the influencer must disclose any material connection. This is commonly done through a hashtag #Ad or #Sponsored and must be clear and conspicuous. It cannot be hidden in a series of hashtags or below the read more section. In addition to the FTC’s Disclosures 101 for Social Media Influencers guidance here is a useful document showing real-world examples of when disclosers should be used.
All influencer content should not contain disease-oriented statements and must be truthful, not misleading, and backed by scientific support. Content refers to written and spoken words, captions, infographics, and of course hashtags. Uncompliant language examples include This product worked great for my anxiety and depression, or I used this for my arthritis and now it is gone. I don’t suggest providing specific content for influencers but offering useful tools is essential. Educating influencers on lower risk but effective ways to compliantly communicate their authentic excitement is one of my favorite discussions, and I commonly train agencies and marketing teams on this topic. I love this aspect of compliance and is at the core of why I started Supplement Advisory Group. Brands should provide a list of off-limits words such as anxiety with some possible alternatives that may be accurate; happy mood support, balanced state of mind, maximum smiles, resilient mind, I am ready to face the day. I have found influencers have fun finding truthful and lower risk ways to communicate a message that resonates with their audience. #SmilesForDays
Brands should always have influencer contracts in place such as laying out disclosure requirements, rules for not making disease claims, indemnification clauses, restrictions from using copyrighted materials, payment terms, and penalties for not following the rules. Hiring an advertising attorney such as Ivan Wasserman or Erica W. Stump to develop these influencer contracts is an essential part of protecting the brand, and clearly states the responsibilities and expectations of each party.
Educational use only. Seek the advice of an attorney for specific legal needs.
# # #
Asa is principal of the regulatory consulting company Supplement Advisory Group, specializing in finding online risk and providing lower risk solutions. He is the American Herbal Products Association (AHPA) Cannabis Committee Chair. Asa is a Certified Clinical Herbalist (CCH) with 20 years of experience implementing compliant marketing processes in the dietary supplement and hemp industries. Asa’s Regulatory Education Series platform host helpful videos, blogs, and free informational events. Learn more at AsaWaldstein.com