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WARN YOUR CUSTOMERS: Online CBD Sellers Lack Consistency in Product Quality, Payment Solutions

Here’s yet another reason to promote to customers the benefits of shopping for CBD products at your retail store — a new study of online CBD companies revealed disturbing variations in product quality, including, in some, the presence of potentially dangerous substances.

Internet monitoring company LegitScript, analyzed the chemical makeup of CBD products from 300 online providers and found two critical shortcomings of product safety and regulatory compliance: dramatic variances from the products’ stated amount of CBD, and the presence of solvents and known toxins, including carcinogens.

LegitScript tested 30 products from websites that appeared near the top of search results. Two-thirds of those contained significantly more or less CBD than they advertised, with nine containing less than half. One tested product had only 1% of what it claimed.

Most concerning, one bottle of ingestible oil had 18.5 times the allowable amount of lead by California standards.

“One CBD product we tested contained toxins similar to those in Flint, Michigan’s water supply at the height of the city’s lead crisis,” said John Horton, LegitScript’s President and CEO.

“People have assigned blind faith in CBD,” Horton added. “If you’re taking this product on a daily basis, your health is really at risk.”

Key findings include:

  • Potency gaps: More than half of products tested contained significantly less CBD than stated in packaging.
  • Dangerous ingredients: One of 30 products tested had 18.5 times the allowable amount of lead in it, while one product contained 5.6 times the permissible amount of ethylene oxide — a known carcinogen.
  • Business practices: 98% of online CBD merchants were out of compliance in terms of types of products sold, jurisdictions shipped, and marketing claims made.

The study also raises concerns about the legitimacy of online CBD marketplaces as major technology providers Shopify Inc. and Square Inc. begin working with them. In addition to product testing, LegitScript researched payment processing among CBD sellers and discovered merchants engaged in high-risk financial behavior, including transaction laundering. Additionally, many sellers charged customers undeclared fees by transacting through offshore payments companies.

“When you get up to a certain percentage of non-compliance in any market, consumers lose trust and the entire market falls apart,” Horton said. “There’s a real problem here, but it is fixable.”

“We’re in the early stages of a CBD boom, which means there are many people trying to get into the market. Without standards, we face a ‘Wild West’ industry,” Horton said.

“Some CBD products appear to be safe,” Horton added, “but it’s imperative that consumers, e-commerce marketplaces, and payment providers understand the risks posed by some CBD products and sellers.”

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