Reef Industries, Inc.

Text (OCR of the scan at left; may contain errors)

IN THE MATTER OF REEF INDUSTRIES, INC.

D/B/A REEFCBD.COM AND REEF WELLNESS, CANNATERA, INC., ANDHEMP, LTD., ANDREW M. BOUCHIE, JOHN R. CAVANAUGH, AND SHAUN PAQUETTE CONSENT ORDER, ETC. IN REGARD TO ALLEGED VIOLATIONS OF SECTIONS 5 AND 12 OF THE FEDERAL TRADE COMMISSION ACT Docket No. C-4737; File No. 202 3064 Complaint, February 4, 2021 – Decision, February 4, 2021 This consent order addresses Reef Industries, Inc.’s advertising of cannabidiol (CBD), a cannabinoid compound found in hemp and cannabis. The complaint alleges that respondent violated Sections 5(a) and 12 of the FTC Act by disseminating false and unsubstantiated advertisements claiming that: (1) CBD products can effectively prevent, cure, treat, or mitigate multiple diseases and other health conditions; and (2) studies or scientific research prove that CBD products effectively prevent, cure, treat, or mitigate multiple diseases and other health conditions. The consent order requires requires randomized, double-blind, placebo-controlled clinical testing for the challenged claims or any disease treatment, mitigation, or cure claim for a Covered Product, and prohibits other misleading or unsubstantiated representations about the health benefits, performance, efficacy, safety, or side effects of any Covered Product or essentially equivalent product.

Participants For the Commission: Nick Coates and Laura Fremont.

For the Respondents: Robert Hindin, Robert Hindin & Associates. COMPLAINT The Federal Trade Commission, having reason to believe that Reef Industries, Inc., a corporation, Cannatera, Inc., a corporation, AndHemp, Ltd., a limited company, and Andrew M. Bouchie, John R. Cavanaugh, and Shaun Paquette, individually and as officers and/or owners of Reef Industries, Inc., Cannatera, Inc., and/or AndHemp, Ltd. (collectively, “Respondents”), have violated the provisions of the Federal Trade Commission Act, and it appearing to the Commission that this proceeding is in the public interest, alleges: 1. Respondent Reef Industries, Inc. (“Reef”), also doing business as Reefcbd.com and Reef Wellness, is a California corporation with its principal office or place of business at 3033 Bristol Street #G, Costa Mesa, California 92626.

VOLUME 171 Complaint 2. Respondent Cannatera, Inc., (“Cannatera”) is a California corporation with its principal office or place of business at 1235 E. Francis Street Suite M, Ontario, California 91761. 3. Respondent AndHemp, Ltd., (“AndHemp”) is a United Kingdom limited company with its principal office or place of business at 1235 E. Francis Street, Ontario, California 91761.

4. Respondent Andrew M. Bouchie (“Bouchie”) is an officer, director, and principal shareholder of Reef, an officer of Cannatera, and President and co-owner of AndHemp. Individually or in concert with others, he controlled or had the authority to control, or participated in the acts and practices alleged in this complaint. His principal office or place of business is the same as that of Reef.

5. Respondent John R. Cavanaugh (“Cavanaugh”) is an officer, director, and principal shareholder of Reef. Individually or in concert with others, he controlled or had the authority to control, or participated in the acts and practices alleged in this complaint. His principal office or place of business is the same as that of Reef. 6. Respondent Shaun Paquette (“Paquette”) is an officer and director of Reef, officer of Cannatera, and co-owner of AndHemp. Individually or in concert with others, he controlled or had the authority to control, or participated in the acts and practices alleged in this complaint. His principal office or place of business is the same as that of Reef. 7. Respondents Reef, Cannatera, and AndHemp (collectively, “Corporate Respondents”) have operated as a common enterprise while engaging in the unlawful acts and practices alleged below. Corporate Respondents have conducted the business practices described below through an interrelated network of companies that have common ownership, officers, business functions, business and mailing addresses, and unified advertising and marketing. Because these Corporate Respondents have operated as a common enterprise, each of them is jointly and severally liable for the acts and practices alleged below. Respondents Bouchie, Cavanaugh, and Paquette formulated, directed, controlled, had the authority to control, or participated in the acts and practices of the common enterprise alleged in this Complaint. 8. The acts and practices of Respondents alleged in this complaint have been in or affecting commerce, as “commerce” is defined in Section 4 of the Federal Trade Commission Act.

Respondents’ Marketing of CBD Products 9. Cannabidiol (“CBD”) is a substance naturally occurring in, and that can be extracted from, the hemp plant, cannabis sativa. Respondents have advertised, promoted, offered for sale, sold, and distributed products containing CBD (“CBD Products”) that are intended for human use. According to the product labels and Respondents’ websites, dosages vary. These CBD Products are “food” and/or “drugs,” within the meaning of Sections 12 and 15 of the Federal Trade Commission Act. For example:

REEF INDUSTRIES, INC. 363 Complaint a. Reef has sold a variety of CBD Products, including tinctures, gummies, gel caps, salves, gels, sprays, lotions, serums, moisturizers, and vape oils. These products contained, for example, between 9.884 to 644.700 mg of CBD per unit. Until approximately January 2020, consumers could purchase these CBD Products from Respondents by ordering online at reefcbd.com, or at a brick and mortar store called Reef Wellness located at 3033 Bristol Street #G, Costa Mesa, California 92626.

b. Cannatera has sold a variety of CBD Products containing different amounts of CBD. Cannatera’s Refresh (Cleanser), for example, contained 83.520 mg of CBD per unit. Cannatera’s Revive (Serum) contained 94.191 mg of CBD per unit. Cannatera’s Renew (Moisturizer) contained 187.920 mg of CBD per unit. Until approximately January 2020, consumers could purchase Cannatera CBD Products from Respondents by ordering online at reefcbd.com.

c. AndHemp has sold a variety of CBD Products containing different amounts of CBD. For example, AndHemp’s lavender lotion contained 183.372 mg of CBD per unit. AndHemp’s muscle gel contained 138.600 mg of CBD per unit. AndHemp’s pain oil spray contained 359.100 mg of CBD per unit. Until approximately January 2020, consumers could purchase AndHemp CBD Products from Respondents by ordering online at andhemp.com or reefcbd.com.

10. Respondents have disseminated or have caused to be disseminated advertisements for CBD Products, including but not necessarily limited to the attached Exhibits A through Q. Respondents promoted CBD Products through a variety of means, including through their websites reefcbd.com and cannatera.com, and through social media platforms such as Twitter, Facebook, YouTube, and Instagram. These advertisements contained the following statements: a. What Are Some Potential CBD Benefits? . . .

CBD hemp oil has a huge range of potential health benefits and uses, including . . . fighting cancer, . . . eliminating depression, [and] preventing inflammatory arthritis . . . .

. . .

Rеduсеѕ Anxiety and Depression According to the Anxiety and Depression Association of America, depression affects 6% and anxiety affects 18% of the U.S. population each year. Research shows that CBD oil can help with both.

VOLUME 171 Complaint CBD has been shown to reduce levels of stress and anxiety in those suffering from conditions such as PTSD, social anxiety disorder, and obsessive-compulsive disorder. . . .

Though a B12 deficiency may also be to blame, CBD has been shown to reduce depression by enhancing both serotonergic and glutamate cortical signaling (both are lacking in those with depression).

Cаlmѕ Childhood Epilepsy CBD has anti-seizure properties that have been shown to successfully treat drug-resistant children who have neurological disorders like epilepsy (with no side effects!). In one study published in the New England Journal of Medicine, CBD decreased frequency of seizures by 23 percentage points more than those taking a placebo.

Relief fоr Chronic Pаin Those suffering from chronic pain from diseases like fibromyalgia are finding relief with CBD. Taking CBD can offer pain relief and can even prevent nervous system degeneration. In fact, it has been approved in Canada for multiple sclerosis and cancer rain [sic].

. . .

Reduces Inflammation Chronic inflammation is a huge problem in our society that contributes to many non-infectious diseases including heart disease, cancer, Alzheimer’s, autoimmune disease, and more, according to the National Center for Biotechnology Information.

Diet and lifestyle play a huge part in chronic inflammation but when folks are already eating a healthy, nutrient dense diet and optimizing their lifestyle (getting enough sleep and exercise for example), CBD oil can help. Research also shows that CBD oil can reduce chronic inflammation that leads to disease.

. . .

Improves Hеаrt Hеаlth Heart disease is a growing problem today. In fact, it’s the leading cause of death in the U.S. A healthy diet and lifestyle are a tor [sic] priority for heart health, but CBD oil can also help. According to research cannabidiol reduces artery blockage, reduces stress induced cardiovascular REEF INDUSTRIES, INC. 365 Complaint response, and san [sic] reduce blood pressure. It may also reduce cholesterol.

As mentioned earlier, CBD oil is helpful in preventing oxidative stress and inflammation. Both of these are often precursors to heart disease. (Exhibit A, blog post by Reef, What Are Some Potential CBD Benefits? (January 1, 2019), www.reefcbd.com).

b. Nature’s Medicine: Top 5 Health Benefits of CBD Oil If you suffer from chronic pain, anxiety, seizures, or any number of other maladies, finding relief can feel impossible. But did you know there’s a natural treatment that can help? It’s true! CBD oil is an effective treatment or supplemental treatment for tons of issues, from everyday aches and pains to complex diseases like cancer.

. . .

Cancer-Fighting Although the research about hemp oil as a treatment for cancer is still new, it’s very promising. Preliminary studies have shown that CBD slows the growth of certain kinds of cancer cells, or kills them entirely (https://www.cancer.org/treatment/treatments-and-side­ effects/complementary-and-alternativemedicine/marijuana-and­ cancer.html). Although CBD should not be used as a cancer treatment on its own, it’s a great addition to professionally supervised medical care. . . .

Anti-Seizure When the electrical activity of the brain fluctuates, seizures occur. Thankfully, CBD oil can help control seizures. One study showed a 38.9 percent drop (https://www.nejm.org/doi/full/10.1056/NEJMoa1611618#t=article) in seizure activity in people who regularly took CBD.

Fights Diabetes If you or someone you love suffers from diabetes, try using CBD oil to treat it. Not only is it safer than the most common diabetes medications, but it’s also more effective. CBD oil can prevent diabetes and obesity, VOLUME 171 Complaint treat insulin resistance, and help with the chronic skin sensitivity that often accompanies diabetes.

Be Well! As you can see, CBD is a safe and effective treatment for many ailments and diseases. It works with our bodies’ natural processes and rhythms to restore balance and health.

If you suffer from anxiety, pain, diabetes, seizures, or even cancer, try adding CBD oil into your treatment regimen.

It could change your life! (Exhibit B, blog post by Reef, Nature’s Medicine: Top 5 Health Benefits of CBD Oil (Jan. 22, 2019), www.reefcbd.com).

c. Ryan Smith Trains Hard With Reef CBD . . .

Reef CBD has a huge range of potential health benefits and uses, including . . . fighting cancer . . . [and] preventing inflammatory arthritis . . . .

. . .

Not only does Reef CBD interact with receptors in the brain, but it also works with the immune system. Reef CBD oil for pain will reduce inflammation and relieve pain at the same time. Chronic inflammation is a huge problem in our society that contributes to many non-infectious diseases including heart disease, cancer, Alzheimer’s, autoimmune disease, and more, according to the National Center for Biotechnology Information. Diet and lifestyle play a huge part in chronic inflammation but when folks are already eating a healthy, nutrient-dense diet and optimizing their lifestyle (getting enough sleep and exercise for example), Reef CBD can help. Research also shows that CBD can reduce chronic inflammation that leads to disease.

. . .

CBD has been shown to reduce levels of stress and anxiety in those suffering from conditions such as PTSD, social anxiety disorder, and obsessive-compulsive disorder. . . . CBD has been shown to reduce depression by enhancing both serotonergic and glutamate cortical signaling (both are lacking in those with depression).

REEF INDUSTRIES, INC. 367 Complaint (Exhibit C, blog post by Reef, Ryan Smith Trains Hard with Reef CBD (May 29, 2019), www.reefcbd.com).

d. 7 CBD Benefits Strongly Backed by Science . . .

Protect Nerves Studies have shown that CBD may protect the nerve endings and dampen overactive messages traveling through the nervous system. A seizure is an overwhelming of the brain with too many messages at once. But this protection may go beyond seizures.

• A 2018 professional review of existing studies found that nerve protection may help those with Parkinson’s and Multiple Sclerosis. • A 2018 study found that for those with Parkinson’s early, [sic] intervention is vital because the damage that Parkinson’s does to the nerves happens quickly and is irreversible, making CBD’s effects limited.

• A study conducted by Maryland researchers way back in 2000 had already determined that CBD was able to protect nerves from damage. While we have scientific rigor for a reason, it also means that sometimes scientists spend decades studying something before we see practical application in therapeutics or medicine. Has CBD’s day finally come? We hope so. And with each new study confirming the findings of the last, that looks to be the case. Many scientists believe that CBD benefits may extend to other conditions that damage nerves like celiac, the disease that causes gluten intolerance as well as multiple sclerosis (MS), lupus and rheumatoid arthritis. But it’s still too early in the studies. You might choose to use to see if it helps you with conditions of the nervous system. But the jury is still out on these CBD benefits.

But seizures and nerve protection aren’t the only areas where the science is strong.

. . .

VOLUME 171 Complaint Reduce inflammation The benefits of CBD on inflammation are something anyone can get excited about, even the chillest dude you know. A lot of the chronic diseases that exist today wouldn’t exist without inflammation. For example, irritable bowel syndrome (IBS), colitis, arthritis, dermatitis, autoimmune diseases. Inflammation is important. It’s how your body fights infection. But when it sticks around after last call, it becomes that belligerent drunk who’s flipping the tables and making those unwanted advances.

The benefits of CBD for inflammation are promising. But it may be some time though before we can say that it can treat a specific disease. More studies are needed to find the right doses. But until then, many people are experimenting and reporting positive results.

• In 2016, researchers found that a high dose of CBD could significantly reduce colon inflammation when given via a suppository.

• A 2017 study showed that CBD reduced joint inflammation[.] They found the most effective dose to be 300 µg, which is approximately 1/3 of a milligram. It reduced inflammation response by nearly 23%.

• In 2016, researchers used CBD to reduce gum inflammation in those with gingivitis.

And we’re only scratching the surface here.

. . .

Reduce anxiety symptoms . . .

Multiple studies support the anti-anxiety effects of CBD. Researchers are particularly interested in its ability to help people with: • Panic disorder • Obsessive-compulsive disorder (OCD) • Social anxiety disorder • Post-traumatic stress disorders REEF INDUSTRIES, INC. 369 Complaint . . .

Reduce intestinal distress Irritable Bowel Syndrome is an inflammatory condition, but it deserves its own section. Common IBS diseases include ulcerative colitis and Crohn’s.

• A 2013 study on those with IBS found that CBD is a “very promising compound since it shares the typical cannabinoid beneficial effects on gut lacking any psychotropic effects[.]” • A 2011 study showed a reduction in TNF-α expression as well as the presence of cleaved caspase-3 in the intestines of those with colitis. Both of these markers represent a scientifically measurable reduction in bowel inflammation.

• A 2009 study found that CBD reduced damage to the colon caused by toxins, such as chemo.

(Exhibit D, blog post by Reef, 7 CBD Benefits Strongly Backed by Science (June 7, 2019), www.reefcbd.com).

e. Reef CBD Body Rubs Not Your Typical Topical . . .

Chronic inflammation is a huge problem in our society that contributes to many non-infectious diseases including heart disease, cancer, Alzheimer’s, autoimmune disease, and more, according to the National Center for Biotechnology Information. Diet and lifestyle play a huge part in chronic inflammation but when folks are already eating a healthy, nutrient-dense diet and optimizing their lifestyle (getting enough sleep and exercise for example), Reef CBD body rub can help. Research also shows that CBD oil can reduce chronic inflammation that leads to disease. The benefits of CBD on inflammation are something anyone can get excited about, even the chillest dude you know. A lot of the chronic diseases that exist today wouldn’t exist without inflammation. For example, irritable bowel syndrome (IBS), colitis, arthritis, dermatitis, autoimmune diseases. Inflammation is important. It’s how your body fights infection. But when it sticks around after last call, it becomes that belligerent drunk who's flipping the tables and making those unwanted advances.

VOLUME 171 Complaint The benefits of Reef CBD for inflammation are promising. Many people are experimenting and reporting positive results.

• In 2016, researchers found that a high dose of CBD could significantly reduce colon inflammation when given via suppository.

• A 2017 study showed that CBD reduced joint inflammation. They found the most effective dose to be 300 μg, which is approximately 1/3 of a milligram. It reduced inflammation response by nearly 23%.

• In 2016, researchers used CBD to reduce gum inflammation in those with gingivitis.

. . .

• A 2018 study on HIV patients showed the CBD reduced nerve pain by 30%. This can likely be attributed to the anti-inflammation and neuroprotective properties.

(Exhibit E, blog post by Reef, Reef CBD Body Rubs Not Your Typical Topical (June 18, 2019), www.reefcbd.com).

f. Reefcbd @Reefcbd_ Heart diѕеаѕе is a grоwing рrоblеm tоdау. In fact, it’ѕ the lеаding cause оf dеаth in thе U.S. A healthy diеt аnd lifеѕtуlе is a tор рriоritу fоr heart hеаlth, but CBD oil can аlѕо hеlр. #FridayFeeling ACCODRING [SIC] TO RESEARCH CANNABIDIOL REDUCES ARTERY BLOCKAGE, REDUCES STRESS INDUCED CARIOVASCULAR [SIC] RESPONSE, AND CAN REDUCE BLOOD PRESSURE.

FOR MORE INFORMATION GO TO WWW.REEFCBD.COM.

*THIS STATEMENT HAS NOT BEEN EVALUATED BY THE FOOD AND DRUG ADMINISTRATION. THIS PRODUCT IS NOT INTENDED TO DIAGNOSE, TREAT, CURE, OR PREVENT ANY DISEASE.

(Exhibit F, Tweet by @reefcbd (Nov. 9, 2018), https://twitter.com/Reefcbd/status/1060932604910723072). REEF INDUSTRIES, INC. 371 Complaint g. CANNABINOID AND CANNATERA: THE BENEFITS OF CBD ON THE SKIN . . .

It Soothes Inflammation If you suffer from eczema, rosacea or psoriasis, you’re familiar with the scaly, red bumps that arise due to inflammation. This is where CBD skin care benefits shine.

Applied topically, the oil interacts with our body’s own endocannabinoid receptors. In turn, inflammation decreases, along with painful itching. In fact, one study of 21 patients found that, after three weeks of applying CBD lotion twice a day, eight were able to permanently eliminate their severe skin itching.

. . .

One study revealed that CBD is also a neurological protectant, helping to treat age-related disorders including cerebral ischemia, which occurs when blood flow to the brain is compromised.

(Exhibit G, web ad by Andrew M. Bouchie, Cannabinoid and Cannatera: The Benefits of CBD on the Skin (Mar. 25, 2019), https://medium.com/@andy_67985/cannabinoid-and-cannatera-the­ benefits-of-cbd-on-the-skin-b0db6b215175).

h. HOW CBD PRODUCTS ARE BENEFICIAL TO YOUR BODY . . .

ECZEMA All of CBD lotion, CBD salve, and even CBD cream [sic] can help to treat eczema. However, at this point, it is necessary to point out that they work to different degrees for different people because people have different skin composition. CBD helps some people to get eczema off their skin completely but it only works partially for others.

This is normal as there is no single drug that works for everyone. . . .

VOLUME 171 Complaint PAIN This is the most popular benefit of CBD on the body. Nevertheless, it is necessary to mention it here too. A lot of studies and clinical trials have confirmed it and many people who have used it have also confirmed the efficacy of CBD on chronic pain.

(Exhibit H, blog post by Cannatera, How CBD Products Are Beneficial to Your Body (June 13, 2019), https://cannatera.com/blogs/news/how-cbd­ products-are-beneficial-to-your-body).

i. ACNE, INFLAMMATION AND CBD . . .

Scientific Research Science supports its efficacy in this capacity: research shows that CBD may treat all kinds of skin problems, including chronic conditions. A study finding that CBD slows overproduction of skin cells signals promise for psoriasis; According [sic] to the National Center for Biotechnology Information, chronic inflammation is a consistent problem in the United States, contributing to numerous non-infectious diseases like heart disease and autoimmune disease. Although diet and lifestyle play a significant role in chronic inflammation, CBD oil can encourage improvement. (Exhibit I, blog post by Cannatera, Acne, Inflammation and CBD (July 19, 2019), https://cannatera.com/blogs/news/acne-inflammation-and-cbd). j. UV RAYS: WHY ARE THEY HARMFUL? . . .

Exposure to UVA rays contributes to premature aging factors such as wrinkles and fine lines. On the other hand, UVB exposure is linked to sunburns and skin cancers. Although UVC rays do not penetrate the Earth, they can come from tanning beds and lights fixtures which can ultimately lead to skin cancer. People that are overexposed to UV radiation have a higher risk of developing skin cancer. . . .

One of the key ingredients in our moisturizer is Cannabidiol. Studies suggest that CBD may prevent premature aging, inflammation, and UV ray damage when applied to the skin.

REEF INDUSTRIES, INC. 373 Complaint (Exhibit J, blog post by Cannatera, UV Rays: Why Are they Harmful? (Aug. 19, 2019), https://cannatera.com/blogs/news/uv-rays-why-are-they­ harmful).

k. CBD OIL FOR ACNE: IS IT EFFECTIVE? . . .

Another study in 2016 revealed that the cannabis plant has antibacterial and anti-fungal effects. These characteristics help reduce infections from dirt and other pollutants on the skin.

(Exhibit K, blog post by Cannatera, CBD Oil for Acne: Is it Effective? (June 9, 2019), https://cannatera.com/blogs/news/cbd-oil-for-acne-is-it­ effective).

l. REASONS WHY CBD SHOULD BE IN YOUR SKINCARE REGIMEN . . .

Hence, CBD may help deal with a wide range of skin conditions such as eczema, psoriasis, and pesky breakouts.

(Exhibit L, blog post by Cannatera, Reasons Why CBD Should be in Your Skincare Regimen (May 26, 2019), https://cannatera.com/blogs/news/reasons-why-cbd-should-be-in-your­ skincare-regimen).

m. CAN CBD REALLY HELP ACNE? . . .

Other research shows that CBD can be effective in reducing stress levels, which, in turn, can alleviate skin conditions like acne. CBD might be particularly effective for people who suffer from social anxiety. “A small 2010 study found that cannabidiol could reduce symptoms of social anxiety in people with a social anxiety disorder (SAD). Brain scans of participants revealed changes in blood flow to the regions of the brain linked to feelings of anxiety,” says Medical News Today. (Exhibit M, blog post by Cannatera, Can CBD Really Help Acne? (May 22, 2019), https://cannatera.com/blogs/news/can-cbd-really-help-acne). VOLUME 171 Complaint n. HEMP OIL SKIN CARE: HOW HEMP OIL BENEFITS YOUR SKIN . . .

With sales of CBD products projected to hit $22 billion by 2022, it’s important to know why people are using it so much.

From helping diabetics, to preventing heart disease and anxiety, the benefits seem to be endless.

. . .

LOWERS BLOOD SUGAR CBD is commonly used by diabetics for its regulating effects on blood sugar, but how does that affect your skin? Hyperglycemia, high blood sugar, is believed to be a common cause of acne. CBD, even when absorbed through the skin, can help regulate that, lowering your risk of pesky pimples.

(Exhibit N, blog post by Cannatera, Hemp Oil Skin Care: How Hemp Oil Benefits Your Skin (Apr. 18, 2019), https://cannatera.com/blogs/news/how-does-hemp-oil-benefit-your-skin). o. INFLAMMATORY CONDITIONS LEAD TO MANY SKIN PROBLEMS . . .

Inflammation causes an itchy rash that can often be treated and dealt with easily. Other times, inflammation leads to chronic conditions like eczema, psoriasis, rosacea, and seborrheic dermatitis that require ongoing treatment to keep under control.

. . .

When skin inflammation is severe, medical interventions are often sought to fight it. However, in many cases, mild to severe inflammation can be kept in check by using the proper skincare products on a daily basis. This would include those offered by Cannatera. Our products contain CBD, a compound found in the hemp plant. You’ve probably heard of it. CBD has been garnering a lot of attention over the last few years in the health and beauty world for its anti-inflammatory and anti-aging properties. According to recent research on the subject, by regularly using products containing CBD, such as Cannatera skincare products, you’ll be applying REEF INDUSTRIES, INC. 375 Complaint the anti-inflammatory power of CBD oil and the powerful anti-oxidants it contains directly to the source of your inflammation, and relief can be achieved quickly.

(Exhibit O, blog post by Cannatera, Inflammatory Conditions Lead to Many Skin Problems (Jan. 23, 2019), https://cannatera.com/blogs/news/inflammatory-conditions-lead-to-many­ skin-problems).

p. Studies show that the endocannabinoid system may be critical for regulating sleep and sleep stability, as it promotes harmony throughout the body. When CBD interacts with this system, those who suffer may be able to achieve longer periods and overall quality of sleep. CBD may also provide relief for insomnia sufferers who struggle to achieve REM sleep due to anxiety.

. . .

CBD for Insomnia Nearly 40 million people in America suffer from chronic insomnia. Source: National Center for Biotechnology Information (Exhibit P, Facebook post by @AndHemp (Nov. 3, 2019), https://www.facebook.com/andhemp/photos/a.557224958418793/5604637 98094909/?type=3&theater).

q. CBD Benefits: A Look at CBD as a Potential Digestive Aid . . .

To date, the most effective methods of treatment for people with these debilitating conditions has been to offer some kind of medication to help combat symptoms. The cannabinoid cannabidiol (CBD) which is one of over a hundred cannabinoids found in the cannabis plant, could bring new levels of relief to people who have issues with things like irritable bowel syndrome or Chron’s [sic] disease.

. . .

Scientists have stated:

“Pharmacological modulation of the endogenous cannabinoid system could provide a new therapeutic target for the treatment of a number of gastrointestinal diseases…”

VOLUME 171 Complaint This is exciting news for people who deal with GI issues on a daily basis, especially when so many other prescription medication alternatives come along with side effects that can be just as troubling as the condition alone. There have been a few small formal studies to help solidify this abstract assumption that scientists have made about CBD. One small study of 46 people who had moderately severe Chron’s [sic] disease showed that 65 percent of participants saw a full remission of their symptoms. There was a review published in 2008 by a neurologist that stated IBS could be a result of a clinical endocannabinoid deficiency. In 2011, one study found that CBD helped create a reduction in inflammation in the bowels caused by a pesky bacterium called bacterial lipopolysaccharides (LPS), which just happens to be a major thing in the bodies of people with have IBS. . . .

Even though there is no definitive dosing guidelines or proof that CBD is a cure-all for digestive issues, it is an alternative treatment that could be worth a shot if you are suffering from GI issues. Check out the CBD oil for sale on AndHemp.

(Exhibit Q, blog post by AndHemp, CBD Benefits: A Look at CBD as a Potential Digestive Aid (July 8, 2019), www.andhemp.com). Count I False or Unsubstantiated Efficacy Claims 11. In connection with the advertising, promotion, offering for sale, sale, or distribution of CBD Products, Respondents have represented, directly or indirectly, expressly or by implication, that CBD Products effectively prevent, cure, treat, or mitigate multiple diseases and other health conditions, including: acne, Alzheimer’s disease, arthritis, autoimmune disease, cancer, celiac disease, childhood epilepsy, chronic inflammation, chronic insomnia, chronic pain (including chronic pain from fibromyalgia, multiple sclerosis, and cancer), colitis, Crohn’s disease, damage to the colon due to chemotherapy, depression, diabetes, eczema, epilepsy, gingivitis, heart disease, insulin resistance, irritable bowel syndrome (“IBS”), lupus, multiple sclerosis, neurodegenerative disorders, neurological and age-related disorders (including cerebral ischemia), obsessive-compulsive disorder (“OCD”), panic disorder, Parkinson’s disease, posttraumatic stress disorder (“PTSD”), psoriasis, rosacea, seizures, seizure disorders, skin cancer, skin infections, social anxiety disorder, and strokes.

12. The representations set forth in Paragraph 11 are false or misleading, or were not substantiated at the time the representations were made. REEF INDUSTRIES, INC. 377 Complaint Count II False Establishment Claims 13. In connection with the advertising, promotion, offering for sale, sale, or distribution of CBD Products, Respondents have represented, directly or indirectly, expressly or by implication, that studies or scientific research prove that CBD Products effectively prevent, cure, treat, or mitigate multiple diseases and other health conditions, including: arthritis, autoimmune disease, cancer, childhood epilepsy, chronic inflammation, chronic insomnia, chronic pain (including chronic pain from fibromyalgia, multiple sclerosis, and cancer), colitis, Crohn’s disease, damage to the colon due to chemotherapy, depression, epilepsy, gingivitis, heart disease, irritable bowel syndrome (“IBS”), multiple sclerosis, neurological and age-related disorders (including cerebral ischemia), obsessive-compulsive disorder (“OCD”), panic disorder, Parkinson’s disease, post-traumatic stress disorder (“PTSD”), psoriasis, seizures, seizure disorders, skin cancer, skin infections, social anxiety disorder, and strokes. 14. In fact, studies or scientific research do not prove that CBD Products effectively prevent, cure, treat, or mitigate multiple diseases and other health conditions, including: arthritis, autoimmune disease, cancer, childhood epilepsy, chronic inflammation, chronic insomnia, chronic pain (including chronic pain from fibromyalgia, multiple sclerosis, and cancer), colitis, Crohn’s disease, damage to the colon due to chemotherapy, depression, epilepsy, gingivitis, heart disease, irritable bowel syndrome (“IBS”), multiple sclerosis, neurological and age-related disorders (including cerebral ischemia), obsessive-compulsive disorder (“OCD”), panic disorder, Parkinson’s disease, post-traumatic stress disorder (“PTSD”), psoriasis, seizures, seizure disorders, skin cancer, skin infections, social anxiety disorder, and strokes. Therefore, the representations set forth in Paragraph 13 are false or misleading. Violations of Sections 5 and 12 15. The acts and practices of Respondents as alleged in this complaint constitute unfair or deceptive acts or practices, and the making of false advertisements, in or affecting commerce in violation of Sections 5(a) and 12 of the Federal Trade Commission Act. THEREFORE, the Federal Trade Commission this fourth day of February, 2021, has issued this Complaint against Respondents.

By the Commission.

VOLUME 171 Complaint Exhibit A REEF INDUSTRIES, INC. 379 Complaint Reef CBD Blog - Reef CBD Page 2 of 8 CBD hemp oil has a huge range of potential health benefits and uses, including reducing rain, soothing anxiety, fighting cancer, improving mood, eliminating depression, preventing inflammatory arthritis, protecting the immune system, balancing the metabolism, aiding sleep disorders, and healing the skin, among others. CBD oil can also be used in many ways and has a variety of applications for natural health. It may have side effects such as low blood pressure, light-headedness, fatigue, dry mouth, and slowed mator functions. However, these side effects have been found to be mild according to various studies. Use of CBD ail is recommended if you live in a country or region where the possession, use, and distribution of marijuana is legal. Reduces Anxiety and Depression According tothe Anxiety and Depression Association of America, depression affects 6% and anxiety affects 18% of the U.S. population each year. Research shows that CBD oil can help with both. CBD has been shown to reduce levels of stress and anxiety in those suffering from conditions such as PTSD, social anwiety disorder, and obsessive-compulsive disorder. CBD even reduced the stress and discomfort surrounding public speaking.

Though a B12 deficiency may also be to blame, CBD has been shown to reduce depression by enhancing both serotonergic and glutamate cortical signaling (both are lacking in those with depression). Calms Childhood Epilepsy CBD has anti-seizure properties that have been shown to successfully treat drug-resistant children who have neurological disorders like epilepsy (with no side effects!). In one study published in the New England Journal of Medicine, CBD decreased frequency of seizures by 23 percentage points more than those taking a placebo. Relief for Chronic Pain Those suffering from chronic pain from diseases like fibromyalgia are finding relief with CBD. Taking CBD can offer pain relief and can even prevent nervous system degeneration. In fact, ithas been approved in Canada for multiple sclerosis and cancer rain.

What's amazing is that CBD doesn't cause dependence or tolerance, so it's a great choice for those trying to stay away from opioids.

https:/‘teefchd.comy blogs’ cbd-blog/what-are-some-potential-cbd-benefits 2/6/2020 VOLUME 171 Complaint REEF INDUSTRIES, INC. 381 Complaint Reef CBD Blog - Reef CBD Page 4 of 8 Fights Cancer CBD oil's role in cancer treatment still needs more research, but what ts available is looking promising. According to the American Cancer Society, CBD oil can slow growth and spread of some kinds of cancer (in animals). Because it fights oxidative stress and inflammation, (and both are linked to cancer) it makes sense that CBD oil could help fight cancer cells.

Reduces Inflammation Chronic inflammation is a huge problem in our society that contributes to many non-infectious diseases including heart disease, cancer, Alzheimer's, autoimmune disease, and more, according to the National Center for Biotechnology Information.

Diet and lifestyle play a huge part in chronic inflammation but when folks are already eating a healthy, nutrientdense diet and optimizing their lifestyle (getting enough sleep and exercise for example), CBD oil can help. Research also shows that CBD oil can reduce chronic inflammation that leads to disease. Help for Schizophrenia Schizophrenia is a complicated and serious disease that is typically managed through therapy and pharmaceutical drugs (that carry hefty side effects). Anecdotally, many folks have found that CBD oil has helped reduce hallucinations. Research is beginning to catch up too. A March 2015 review of available research found that CBD was a Safe, effective, and well tolerated treatment for psychosis. But more research is needed to bring CBD into clinical practice.

It should be mentioned that THC, the psychoactive compound in marijuana, may increase psychosis for those at risk. CBD oil, on the other hand, only helps reduce psychosis and may even counteract psychosis brought on by marijuana use.

httos:reefchd. com blogs’ chd-blog/what-are-some-potential-chd-benefits 2/6/2020 VOLUME 171 Complaint REEF INDUSTRIES, INC. 383 Complaint Reef CBD Blog - Reef CBD Page 6 of § Leave a Reply Your email address will not be published. Required fields are marked * Comment Comment Nanve* Email * Name Email POST COMMENT Reef CBD Products have been scientifically developed; using the finest sourced natural ingredients. ff 3033 Bristol St. STEG, Costa Mesa, CA 92626 0 (949) 245-7229 E4 [email protected] RECENT POSTS ron (blogs/cbd-blog/luke-builds-his-ftness-gym-and-discovers-reef-cbd) https:/‘teefcbhd_cony’blogs/chd-blog/what-are-some-potential-chd-benefits 2/6/2020 VOLUME 171 Complaint REEF INDUSTRIES, INC. 385 Complaint Reef CBD Blog - Reef CBD Page § of 8 QUICK LINKS About Us (pages/about-us) Military Discount (/pages/military-discount) Affiliate Program (pages/afiiliate-sign-up) Wholesale (/pages!wholesale) Lab Reports (‘pageslab-results} ©2019 Reef CBD. All Rights Reserved | Privacy (https://reefcbd.com/pages/privacy-policy) | Terms (https:/'reefchd.com/pages/terms-and-conditions) | Refunds & Shipping (https://reefcbd.com/pages/refundand-shipping-policy) Reef CBD products are made with a proprietary blend of Cannabidial (CBD) oil and contain less than 0.3% THC For additional information, please review our certified lab analysis reports https://reefebd. com blogs/cbd-blog/what-are-some-potential-chd-benefits 2/6/2020 VOLUME 171 Complaint Exhibit B REEF INDUSTRIES, INC.

Complaint Reef CBD Blog - Reef CBD Page 2 of 6 If you suffer from chronic pain, anxiety, seizures, or any number of other maladies, finding relief can feel impossible. But did you know there's a natural treatment that can help? It's true! CBD oil is an effective treatment or supplemental treatment for tons of issues, from everyday aches and pains to complex diseases like cancer. Want to know more? Keep reading to learn all about the health benefits of CBD oil and where to get the best product available on the market. Let's get started! Why the Health Benefits of CBD Oil Matter More than half of Americans take an average of four prescription pills (https:/wew.consumerreports.org/prescription-drugs/too-many-meds-americas-love-affair-with-prescriptionmedication’) every day. And prescriptions come with a slew of nasty side effects. They often put a thin band-aid over the symptoms, rather than treating the illness itself. CBD oil is. a natural alternative to these harmful meds. It's one of the 65 or so types of cannabinoids (https:/reefcbd.com/blogs/cbhd-blog/tagged/what-is-cbd) present in marijuana, and because it doesn't contain THC, it's not psychoactive.

Now that we know a little more about why the health benefits of CBD oil matter, let's dive into its top five advantages.

1. Anti-Anxiety Just because CBD isn't psychoactive doesn't mean that it can't treat psychological issues. CBD affects both the paralimbic and limbic areas of the brain. It helps to effectively control and ease anxiety, especially when it's related to a social anxiety disorder.

https://reefebd com blogs/cbd-blog/natures-medicine-top-5-health-benefits-of-chd-oil 2/6/2020 VOLUME 171 Complaint REEF INDUSTRIES, INC. 389 Complaint Reef CBD Blog - Reef CBD Page 4 of 6 If you suffer from anxiety, pain, diabetes, seizures, or even cancer, try adding CBD oil into your treatment regimen. It could change your life! Do you have any questions about the health benefits of CBD oil, or would you like to know where to get the best CBD oil on the market? Contact us (https.//reefcbd.com/pagescontact-us) anytime. We're here to help. Blog CBD CBD Benefits CBD Ol Health Health Benefits Medicine Nature's Medicine f vG ZS @ oO Oo «) NEWER (/blogs/cbd- OLDER GC) blog) Leave a Reply Your email address will not be published. Required fields are marked ~ Comment Comment Name” Email * Name Email POST COMMENT https://reefebd com blogs/cbd-blog/natures-medicine-top-5-health-benefits-of-chd-oil 2/6/2020 VOLUME 171 Complaint REEF INDUSTRIES, INC. 391 Complaint Reef CBD Blog - Reef CBD Page 6 of 6 (https:/‘wwwfacebook.conv'reefcbd/) SHOP REEF CBD All Products (/collections/all) CBD Tinctures (/collections/cbd-tinctures) CBD Vape Oils (/collections/cbd-vape-oils) CBD Edibles (/collections/cbd-edibles) CBD Topicals (/collections‘cbd-topicals) QUICK LINKS About Us (,pages/about-us) Military Discount (/pages/military-discount) Affiliate Program (/pages/affiliate-sign-up) Wholesale (pageswholesale) Lab Reports (pages/lab-results} ©2019 Reef CBD. All Rights Reserved | Privacy (https://reefcbd.com/pages/privacy-policy) | Terms (https:/reefcbd.com/pages/terms-and-conditions) | Refunds & Shipping (https://reefcbd.com/pages/refundand-shipping-policy) Reef CBD products are made with a proprietary blend of Cannabidiol (CBD) oil and contain less than. 0.3% THC For additional information, please review our certified lab analysis reports https:/‘reefebd.com/blogs/cbd-blog/natures-medicine-top-5-health-benefits-of-cbhd-oil 2/6/2020 VOLUME 171 Complaint Exhibit C REEF INDUSTRIES, INC. 393 Complaint Reef CBD Blog - Reef CBD Page 2 of 6 helps with the pain associated with riding a bike”

Smith rides anywhere from 40 to 100 miles at a time and trains six days a week, allowing one day for rest and recovery. Smith's body has to maintain peak physical shape and Reef CBD helps Smith with much needed maintenance.

“| find that by taking Reef CBD it helps to alleviate the pain associated with riding a bike for along time’ said Smith.

Reef CBD has a huge range of potential health benefits and uses, including reducing pain, soothing anxiety. fighting cancer, improving mood, eliminating depression, preventing inflammatory arthritis, protecting the immune system, balancing the metabolism, aiding sleep disorders, and healing the skin, among others. Reef CBD oil can also be used in many ways and has a variety of applications for natural health. Reef Relief with Ryan Smith | Reef CBD Not only does Reef CBD interact with receptors in the brain, but it also works with the immune system. Reef CBD oil for pain will reduce inflammation and relieve pain at the same time. Chronic inflammation is a huge problem in our society that contributes to many non-infectious diseases including heart disease, cancer, Alzheimer's, autoimmune disease, and more, according to the National Center for Biotechnology Information. Diet and lifestyle play a huge part in chronic inflammation but when folks are already eating a healthy, nutrient-dense diet and optimizing their lifestyle (getting enough sleep and exercise for example), Reef CBD can help. Research also shows that CBD can reduce chronic inflammation that leads to disease. https://reefebd. com blogs/cbd-blog/ryan-smuth-trains-hard-with-reef-chd 2/6/2020 VOLUME 171 Complaint REEF INDUSTRIES, INC. 395 Complaint Reef CBD Blog - Reef CBD Page 4 of 6 Comment Reef CBD Products have been scientifically developed: using the finest sourced natural ingredients. ff 3033 Bristol St. STE G, Costa Mesa, CA 92626 0 (949) 245-7222 fl [email protected] RECENT POSTS = | Luke Builds His Fitness 4 Vblogs/cbd-blog/luke-builds-his-fitness-gym-and-discovers-reef-chd) Gym And Discovers Reef ) Pls CBD (/blogs/cbd-bleg/lukebuilds-his-fitness-gym-anddiscoversteef-cbhd) Oct 22 2017 Reef is Making a Splash at (/blogscbd-blog/reef-is-making-a-splash-at-champs-in-denver) CHAMPS in Denver (/blogs/cbdblog, reef-is-making-a-splash-atchamps-in-denver) Octo?, 2019 COMPANY Lab Reports (https:/reefcbd.com/pages/lab-results) https://reefebd. com blogs/cbd-blog/ryan-smuth-trains-hard-with-reef-chd 2/6/2020 VOLUME 171 Complaint

VOLUME 171 Complaint Exhibit D REEF INDUSTRIES, INC. 399 Complaint Reef CBD Blog - Reef CBD Page 2 of 12 As you're confidently strolling down the aisle in a supplements shop, you may take certain things for granted. For example, those shakes really do help you build muscle mass. That supplement really will detoxify your blood. This other one will help me grow two inches..taller. But the supplement industry was a dirty little secret. There's not a whole lot of science behind most of the supplements you find on those pristine shelves. They've probably done little testing. And what they say is in the that 80-pound tub of protein mix or even in that loz sciency looking vial may not even be in there.

The Food and Drug Administration (FDA) does very little to oversee the industry. As long as theyre not saying that they can prevent. cure or treat a disease, they can pretty much do anything they want. It's up to you as the consumer to do the research and come to your own conclusions. Cannabidiol (CBD) is no different. In fact, CBD (https:/reefcbd.conv') is one of the latest party-goers to crash this supplements party. But unlike some supplements, some strong evidence really does have CBD's back. In fact, it's rounded up a posse by now. And while scientists need to stay objective to do good research, there's a lot of excitement out there about what they're finding and what more they must find. But it's important to re-iterate that not all studies are created equal. We have something called the Scientific Method that helps keep scientists honest and objective. Before we jump right into the ocean of scientific evidence supporting CBD and start surfing those waves of information, it pays to familiarize ourselves with some important science concepts on which the studies in the article are built.

Science Concepts You Need to Know (https:/'reefcbd.com/blogscbd-blog/?-cbd-benefits-strongly-backed-byscience) The Scientific Method was invented around the 17th Century. Before that pretty much anyone could claim anything and call it scientific proof. You remember...

https:/reefcbd com blogs/cbd-blog/7-chd-benefits-strongly-backed-by-science 2/6/2020 VOLUME 171 Complaint REEF INDUSTRIES, INC. 401 Complaint Reef CBD Blog - Reef CBD Page 4 of 12 In 20146, a little girl named Charlotte suffered from nearly perpetual violent seizures. Each seizure did more damage to her brain. Charlotte couldn't talk or control her body normally. She was having 1000's of seizures a month. Charlotte went on aregimen of CBD oil, which her parents acquired from a Colorado-based company and the seizures nearly stopped. Charlotte is now regaining much of her lost function and enjoying the normal childhood every child deserves.

As aresult of Charlotte's story, farmers in states where marijuana laws are laxer began cultivating cannabis called Charlotte's Web that is very high in CBD and very low in THC, the substance that makes people high. Because of Charlotte more children with similar seizures now had access to CBD. Charlotte's isn't the only story like this. But it was influential as it may have strongly contributed to the reclassification of hempin the 2014 and 2016 Farm bills. These bills opened the doors for hemp-derived CBD to be sold in the US. It also encouraged the FDA to take CBD claims seriously leading to the approval of Epidiolex. But one child's story isn't enough for the FDA. Let's look at some of the scientific proof of CBD benefits for seizures that went into the approval decision.

You Want the Proof? In 2017, researchers in the US and Europe conducted a placebo-controlled, double-blind, clinical study on CBD for individuals with a rare form of seizures called Dravet's. Each participant was having at least 4 seizures a month, a far cry from poor Charlotte's condition, but still terrible. During the study, the CBD group's seizures reduced by half. The placebo group had no significant reduction. How did CBD do this? The next benefit may shed some light on that. 2. Protect Nerves Studies have shown that CBD may protect the nerve endings and dampen overactive messages traveling through the nervous system. A seizure is an overwhelming of the brain with too many messages at once. But this protection may go beyond seizures.

> 42016 professional review of existing studies found that nerve protection may help those with Parkinson's and Multiple Sclerosis > 42016 study found that for those with Parkinson's early, intervention is vital because the damage that Parkinson's does to the nerves happens quickly and is irreversible, making CBD's effects limited. » Astudy conducted by Maryland researchers way back in 2000 had already determined that CBD was able to protect nerves from damage. While we have scientific rigor for a reason, it also means that sometimes scientists spend decades studying something before we see practical application in therapeutics or medicine. Has CBD's day finally come? We hope so. And with each new study confirming the findings of the last, that looks to https:/reefcbd com blogs/cbd-blog/7-chd-benefits-strongly-backed-by-science 2/6/2020 VOLUME 171 Complaint REEF INDUSTRIES, INC. 403 Complaint Reef CBD Blog - Reef CBD Page 6 of 12 4. Reduce inflammation The benefits of CBD on inflammation are something anyone can get excited about, even the chillest dude you know. A lot of the chronic diseases that exist today wouldn't exist without inflammation. For example, irritable bowel syndrome (IB5), colitis, arthritis, dermatitis, autoimmune diseases. Inflammation is important. It's how your body fights infection. But whenit sticks around after last call, it becomes that belligerent drunk who's flipping the tables and making those unwanted advances.

The benefits of CBD for inflammation are promising. But it may be some time though before we can say that it can treat a specific disease. More studies are needed to find the right doses. But until then, many people are experimenting and reporting positive results.

> In 2016, researchers found that a high dose of CBD could significantly reduce colon inflammation when given via suppository.

> A2017 study showed that CBD reduced joint inflammation They found the most effective dose to be 300 pg, which is approximately 13 of a milligram. It reduced inflammation response by nearly 23%. > Im 2016, researchers used CBD to reduce gum inflammation in those with gingivitis. And we're only scratching the surface here.

5. Reduce pain Inflammation and pain often go hand in hand. But it's important to look at these separately. Does reducing the inflammation also reduce the pain associated with it? » 42018 study on HIV patients showed the CBD reduced nerve pain by 30%. This can likely be attributed to the anti-inflammation and the neuroprotective properties.

> 42016 study on our very best friend, the dog, is also interesting. A controlled, double-blind, randomized study gave CBD to dogs who had crippling osteoarthritis that made it hard for them to move. At the 0, 2,4. 4 and 24 marks they measured attitude, behavior and the ease with which they could walk. Dogs who received the CBD performed better on all measures compared to placebo. Why is adog study so significant? Pain reduction is very difficult to measure scientifically because it's based on perception. On ascale of 1 to 10, how bad is your pain? But dogs don't lie. If they're moving around and look like they feel better, then they do.

6. Reduce anxiety symptoms Most of us try to go with the flaw and hang loose, but in today’s busy culture, the stress is eating away at us all the time no matter how many times a week you hit to the yoga studio. So, is there strong science to show that CBD may help reduce anxiety? Good videos are coming your way. https:/reefcbd com blogs/cbd-blog/7-chd-benefits-strongly-backed-by-science 2/6/2020 VOLUME 171 Complaint REEF INDUSTRIES, INC. 405 Complaint Reef CBD Blog - Reef CBD Page 8 of 12 >» Results on those with Crohn's Disease have been mixed. A small randomized, controlled, double-blind study resulted in remission for 45% of the CBD participants after 8 weeks. But we should note that 35% of the placebo group also went into remission, reminding us once again that sometimes it's mind over matter. Another smaller controlled study found no benefits over placebo for Crohn's. That last point is an important reminder that research is still ongoing. Despite the fact that many studies have been done, there's a lot we still don't know. That's especially true when it comes to how much CBD a person needs for different benefits. The above studies have shown that CBD is safe in high doses and has no significant side effects. And they are bringing to light what administration methods and doses work best. Before we go, let's take a quick look at what these studies are showing us.

CBD Administration Methods How do you take your CBD? You've got alot of choices.

Vaping You can vape CBD straight into your lungs by inhaling CBD vape juice (https://reefcbd.com/collections/‘cbd-vapeoils) through a vape pen. The lungs are filled with mucous membrane that quickly absorbs CBD. Topical/Transdermal CBD CBD can be absorbed through the skin using a CBD tincture or there are numerous cbd creams, lotions and body rubs. lf you have inflamed joints, applying it directly to that area is the most direct way to get the CBD where you need it.

CBD IV/Injections In some of these studies, the CBD was given through IV. We don't recommend that you try that at home. But that's one way to get your daily CBD.

Suppository CBD CBD can be administered through suppository. Not pleasant to think about. But again, this can get the CBD where itneeds to go.

CBD Spray Just like a breath spray, you can spray directly into your mouth or onto your skin. https:/reefcbd com blogs/cbd-blog/7-chd-benefits-strongly-backed-by-science 2/6/2020 VOLUME 171 Complaint Reef CBD Blog - Reef CBD Benefits Of CBD «) NEWER REEF INDUSTRIES, INC.

Complaint CBD Consumption CBD oll CED Vape f¥ wv G &@ @®@ oo oo ('blogs/chdblag) Page 10 of 12 CBD Tinctures OLDER GC) 1 thoughts on “7 CBD Benefits Strongly Backed by Science ” Chris says:

06 19,2019 at 13:42pm (/blogs/chd-blog/?-cbd-benefits-strongly-backed-bysclence#21415047749) Amazing resource here, thank you for the fantastic research and easy to understand information. This is a great post.

Leave a Reply Your email address will not be published. Required fields are marked * Comment Comment Nama* https:/reefcbd com blogs/cbd-blog/7-chd-benefits-strongly-backed-by-science Email * 2/6/2020 VOLUME 171 Complaint REEF INDUSTRIES, INC. 409 Complaint Reef CBD Blog - Reef CBD Page 12 of 12 (https:/‘wwwfacebook.conv'reefcbd/) SHOP REEF CBD All Products (/collections/all) CBD Tinctures (/collections/cbd-tinctures) CBD Vape Oils (/collections/cbd-vape-oils) CBD Edibles (/collections/cbd-edibles) CBD Topicals (/collections‘cbd-topicals) QUICK LINKS About Us (,pages/about-us) Military Discount (/pages/military-discount) Affiliate Program (/pages/affiliate-sign-up) Wholesale (pageswholesale) Lab Reports (pages/lab-results} ©2019 Reef CBD. All Rights Reserved | Privacy (https://reefcbd.com/pages/privacy-policy) | Terms (https:/reefcbd.com/pages/terms-and-conditions) | Refunds & Shipping (https://reefcbd.com/pages/refundand-shipping-policy) Reef CBD products are made with a proprietary blend of Cannabidiol (CBD) oil and contain less than. 0.3% THC For additional information, please review our certified lab analysis reports https:/‘reefcbd com blogs/cbhd-blog/7-cbhd-benefits-strongly-backed-by-science 2/6/2020 VOLUME 171 Complaint Exhibit E REEF INDUSTRIES, INC.

Complaint Reef CBD Blog - Reef CBD Page 2 of 5 Reef CBD body rub makes our signature CBD formula available topically in the form of a lotion or salve like cream for external application on skin. The active ingredients in Reef CBD body rubs interact with the cells of skin layers while not entering into the bloodstream. Reef CBD body rub is the best solution best for individuals who are looking for isolated pain relief for muscles, joints, or to address severe skin conditions. Chronic inflammation is a huge problem in our society that contributes to many non-infectious diseases including heart disease, cancer, Alzheimer's, autoimmune disease, and more, according to the National Center for Biotechnology Information. Diet and lifestyle play a huge part in chronic inflammation but when folks are already eating a healthy, nutrient-dense diet and optimizing their lifestyle (getting enough sleep and exercise for example), Reef CBD body rub canhelp. Research also shows that CBD oil can reduce chronic inflammation that leads to disease.

The benefits of CBD on inflammation are something anyone can get excited about, even the chillest dude you know. A lot of the chronic diseases that exist today wouldn't exist without inflammation. For example, irritable bowel syndrome (IB5), colitis, arthritis, dermatitis, autoimmune diseases. Inflammation is important. It's how your body fights infection. But when it sticks around after last call, it becomes that belligerent drunk who's flipping the tables and making those unwanted advances.

The benefits of Reef CBD for inflammation are promising. Many people are experimenting and reporting positive results.

> In 2016, researchers found that a high dose of CBD could significantly reduce colon inflammation when given via suppository.

>» A2017 study showed that CBD reduced joint inflammation They found the most effective dose to be 300 pg, which is approximately 1/3 of a milligram. It reduced inflammation response by nearly 23%. > In 2016, researchers used CBD to reduce gum inflammation in those with gingivitis. Inflammation and pain often go hand in hand. But it's important to look at these separately. Does reducing the inflammation also reduce the pain associated with it? » A20168 study on HIV patients showed the CBD reduced nerve pain by 30%. This can likely be attributed to the anti-inflammation and neuroprotective properties.

> 42016 study on our very best friend, the dog, is also interesting. A controlled, double-blind, randomized study gave CBD to dogs who had crippling osteoarthritis that made it hard for them to move. At the 0, 2,4, & and 24 marks they measured attitude, behavior and the ease with which they could walk. Dogs who received the CBD performed better on all measures compared to placebo.

https://reefcbd. com blogs/cbd-blog/reef-chd-body-mubs-not-your-typical-topical 2/6/2020 VOLUME 171 Complaint REEF INDUSTRIES, INC. 413 Complaint Reef CBD Blog - Reef CBD Page 4 of 5 Reef CBD Products have been scientifically developed: using the finest sourced natural ingredients. 3033 Bristol 5t. STE G, Costa Mesa, CA 92626 O (949) 245-7222 fl [email protected] RECENT POSTS = Luke Builds His Fitness 4), Ublogs/cbd-blog/luke-builds-his-fitness-gym-and-discovers-reef-cbd) Gym And Discovers Reef or CBD (/blogs/cbd-blog/lukebuilds-his-fitness-gym-anddiscoversteef-cbhd) Oct 22 2017 Reef is Making a Splash at (/blogscbd-blog/reef-is-making-2-splash-at-champs-in-denver) CHAMPS in Denver (/blogs/cbdblog, reef-is-making-a-splash-atchamps-in-denver) Octo9, 2019 COMPANY Lab Reports (https:/reefcbd.com/pages/lab-results) CBD FAQs (httpsreefchd.com/pages/faq) Contact Us (https.reefcbd.com/pages/contact-us} o o (httpsc/‘www.instagram.com/reefcbd/) (https./wwwyoutube.com/channel! https:/reefcbd. com blogs/cbd-blog/reef-chd_-body-mbs-not-your-typical-topical 2/6/2020 VOLUME 171 Complaint REEF INDUSTRIES, INC.

Complaint Exhibit F Reefcbd on Twitter: "Heart disease is a growing problem today. In fact, it’s the leading... Page 1 of 2 Exhibit F Reefcbd E esd ) WY @Reefcbd_ ower Heart disease is a growing problem today. In fact, it’s the leading cause of death in the U.S.

A healthy diet and lifestyle is a top priority for heart health, but CBD oil can also help.

#FridayFeeling ACCODRING 10 RESEARCH CANNABIDIOL REDUCES ARTERY BLOCKAGE, REDUCES STRESS INDUCED CARIOVASCULAR RESPONSE, AND CAN REDUCE BLOOD PRESSURE.

i FOR MORE INFORMATION GOTO WWW/REEFCBO.COM ea) ATOM WE ET ETA RLM FT FORE AN TR TG PRI OT PATA A, CO PRCT AN HEA oft C24 8:30 AM - 9 Nov 2018 https://twitter.com/Reefcbd /status/1060932604910723072 2/27/2020 VOLUME 171 Complaint REEF INDUSTRIES, INC. 417 Complaint Exhibit G 7/8/2020 CANNABINOID AND CANNATERA: THE BENEFITS OF CBD ON THE SKIN | by Andy Bouchie | Medium Exhibit G You have 2 free storles left this month. Sign up and get an extra one for free. CANNABINOID AND CANNATERA: THE BENEFITS OF CBD ON THE SKIN Andy Bouchie Mar 25, 2019 - 3 min read * https./imedium.com/@andy_67985/cannabinoid-and-cannatera-the-benefits-of-chd-on-the-skin-b0db6b2 15175 15 VOLUME 171 Complaint REEF INDUSTRIES, INC. 419 Complaint 7ov2020 CANNABINOID AND CANNATERA: THE BENEFITS OF CED ON THE SKIN | by Andy Bouchie | Medium In fact, one study of 21 patients found that, after three weeks of applying CBD lotion twice a day, eight were able to permanently eliminate their severe skin itching. 2. IT'S AN ACNE FOE From excess sebum production to hormones, there are many reasons why we experience breakouts, even after our adolescent years are over.

Not only does CBD oil help fight the inflammation associated with acne, but it also helps to better regulate our skin’s oil production.

It does so by interacting with a fatty acid transmitter known as anandamide. When this occurs, cell growth regulates and pores are less susceptible to clogging. 3. IT REDUCES SIGNS OF AGING If there is a fountain of youth, it’s filled with CBD oil. Known to be a more powerful anti-oxidant than even Vitamins C and E, it’s an anti-aging superstar. It works by acting as a protective barrier, safeguarding our skin from outside pollutants and other stressors.

Yet, its benefits are far from skin-deep.

One study revealed that CBD is also a neurological protectant, helping to treat agerelated disorders including cerebral ischemia, which occurs when blood flow to the brain is compromised.

4. IT'S AN INSTANT REFRESHER Forget cucumber slices or gel packs. When you wake up puffy-eyed and exhausted, afew drops of CBD oil can do the trick instead.

Its high concentration of Vitamin C boosts your skin’s natural levels of collagen to visibly tighten and reduce redness. It also reduces inflammation, putting those under-eye bags to rest.

5. IT'S THE DEWY GLOW YOU CRAVE hittps.imedium.com/ andy 67985/cannabinod-and-cannatera-the-benefits-of-chd-on-the-skin-bOdbab2 15175 a5 VOLUME 171 Complaint REEF INDUSTRIES, INC. 421 Complaint 7/9/2020 CANNABINOID AND CANNATERA: THE BENEFITS OF CBD ON THE SKIN | by Andy Bouchie | Medium Visit us at Cannatera.com to learn more.

Beauty Cbd Cosmetics AntiAging Skincare About Help Legal *” Google Play httpsviimedium.com/@andy_67985/cannabinoid-and-cannatera-the-benefits-of-chd-on-the-skin-bOdb6b2 15175 55 VOLUME 171 Complaint Exhibit H

VOLUME 171 Complaint REEF INDUSTRIES, INC.

Complaint Exhibit I 7//2020 Acne, Infammaton and CBD - Cannatera Search... usp s-001-s = RCan (0) Exhibit I f @m oe RE cansialera HOME SHOP v BENEFITS ~ OUR STORY BLOG PRESS CBD BEAUTY & SKIN-CARE ACNE, INFLAMMATION AND CBD judy 29, 2009 Let's face it. We'd all love « magic pill chat would magically make cur acne disappear. Trust ws, it's stressful to manage. Having acne, on top of being stressed about our blemishes, feels like it only creates move blemishes appearing on the doing. Introducing CHD ito your din care routine could be jose what the doctor ordered Have you ever heard the phrase “You are what you ext"? Well it’s true. Sort of. Searting im the kitchen can manifest what appears cureasdly on your body. Did you know CHD isn't fase an ingredient im skin care, it's also consemed orally. Introducing CBD inte your diet could be ss sienple as cating a gummy, swallowing a drop from a tinceare of conmeming chocolate. Eating cheaner by canting out sugar and any wnnecemary artificial flavorings can reduce the amount of sebam being produced oro the skin. Sebum Production Sebum is the main factor of acne, as coo much of it produces the ody subseance on your shin, chus indwcing the invitation for acne. An overproduction of sebure causes bacteria to form, which causes an indlemmation reaction. Inflammation is a high factor in prodacing redness and acne throughout the https2/icannatera.convblogs/news/acre-inflammation-and-cbd 13 VOLUME 171 Complaint

VOLUME 171 Complaint Exhibit J

VOLUME 171 Complaint 7/9/2020 Search.

Exhib @ HOME REEF INDUSTRIES, INC.

Complaint Exhibit K CBD Oil for Acne: Is It Effective? - Cannatera it K usp 555-001-753 SHOP ~ BENEFITS ~ OUR STORY Bl PRESS rane OY, 3011 Acne cea common condition that affect thousands of peaple acrow the world. It can be frustrating for peuple dealeng with acne One of the trendang treatment options for acne today & canmabidiol (CBD). The root of healthy shin starts with the inside. lf you cam maintain a healthy balance of consumption, then chances are you are more likely ts reap the benefits of skincare sued topically. CHD can be aied topically of ingested orally foe skincare What is Acme? Acne isa condition caused by hair follicdes and dead skin cells blocking the purrs on the shin. This cames whiteheads, blackheads, or pimples to appear Acne ausally > the furehead, chest er back, shoulders, and the face. Although it is common an teens, it can affect p of all ages There ate various ways to treat acne, but preventing it is challenging Purples and bumps may heal, but when one gues away, another one pops out at 4 ! wue If you're not careful with treating it, acne can lead to permanent different place. Depending on what type of shin you have, acne can be a persimtent warring Treating Acne with CBD oil httpsz!icannatera.convblogs/news/chd-oil-for-acne-is-it-effective Ban io VOLUME 171 Complaint

VOLUME 171 Complaint Exhibit L

VOLUME 171 Complaint REEF INDUSTRIES, INC. 437 Complaint Exhibit M 7/@/2020 Can CBD Really Help Acne? - Cannatera Search. usp | sh-1233s | Can (0) Exhibit M Eq cannaleia a eas | eae] wero | oe] CBD BEAUTY & SKIN-CARE CAN CBD REALLY HELP ACNE? May 22.2009 Acne. It's the most common skin condition in the United States, with more than 50 rmillies «ulferess, according to the American Academy of Dermatology. Around $5 percent of 12-24 year-old experience at lease minor acne, but this din condition can extend well into adulthood and impact someone's self-confidence.

W you waffer from acne, expensive creams and lotims night not work. Neither willl nutrition Or exercise. Or alll of dhe things people claim will chear ap your complesion. There cold bea breakthrough, though. Research suggests that CHD might be beneficial # yuu experience acne. Here's everything you need to know:

1. CSD COULD REDUCE SEBUM PRODUCTION Research wigpests that CBD could reduce sebure — the yellow, sticky substance secreted by your sebaceous glands that keeps your skin moisturized. Although it's 4 great natural motsterizer, too much sebum can cause acne. However, CBD could reduce sebum production and provide you with « clearer ecumplesion.

“CBD oil may help reduce varias types of acne thanks to its ability to adjust how the body creates sebum,” sayy Medical News Today. “Sebusn is a waxy, oily substance the skin makes. CHD oi! abe has ans-indlameatory properties.” httpssiicannatera.convblogs/news/can-chd-really-help-acne 13 VOLUME 171 Complaint REEF INDUSTRIES, INC. 439 Complaint F200 (an CBD Really Help Acne? - Cannatera crave Exygre chris, Sign upto bear ourlateetnews on what's goang on. From mew articles to big wales, be informed with un! Exch and every mcttve i pecs chosen to beree your uh waren hopdlrated with a hal:

FAQ. Refresh, revive, remare Blog Cannaten ‘Your Email f @ wm @ About Us Comtact Uh Teva Policy Wholewls Privacy Policy Terma and Conditions Cream Policy 10: 2920 Canracera, Cannatera i abrand unlizing ramare's beat avers. Highly concentraced with cosnabincid rich excract-ac ongrediqr known 1 fight agairar agang, prooect againat fee radicaly and lwp din calm. Each a ingreckent war chose oo lerer your dis beoonfully hydrated) wth a bakaced glow. Bietred, fiero, Bimew pour don which Canracers. Powered by Shapoty Cas lerv| oD = So a wsa hittes.cannatera conv blogs news) \can-chd-really-help-acne 4a VOLUME 171 Complaint Exhibit N

VOLUME 171 Complaint REEF INDUSTRIES, INC. 443 Complaint Exhibit O 7/Q/2020 Inflammatory Conditions Lead to Many Skin Problems - Cannatera Search. usp ssi-ens3s | WCar (0) Exhibit O f Bim oe BE cansialera HOME | SHOP » | BENEFITS ~ OURSTORY | BLOG | PRESS =| = CBD BEAUTY & SKIN-CARE INFLAMMATORY CONDITIONS LEAD TO MANY SKIN PROBLEMS feewey 21,2019 inflammatory skim conditions are far and away the moat common iaturs dermatologists see when their patients visit. In fact, some say they se these types of afflictions om a daily basis, What is iedlemmation and is it serious? The answer to thés question is yes and na. Inflammation comes an itchy rash that can often be treated and dealt with easily. Other tienes, inflammation leads to chrosic commdlitioms bike eczema, What Causes Skin Inflammation? The ctact process of din inflammation isn't completely understood. Generally, dermatologists beliewe that when the skin comes into contact with « certain irritant (which can be different for everyone) sich as sunlight, dyes and fragrances, soups, ar allergens, inflammatory mesenger hormones are produced im the shim These hormones spread to other cells and rigger the production and release of additional hormones VOLUME 171 Complaint

VOLUME 171 Complaint Exhibit P REEF INDUSTRIES, INC. 447 Complaint Exhibit Q Bg2020 Exhibit Q CAD Beneiis: ALook @ CAD a: a Potten Dogestve Ad - AndHemp This is Google's cache of https://amp.andhemp.com'blogs!chd-news!chd-benefits-a-look-al-cbd-as-a-potentialdigestive-aid. It is a snapshot of the page as it appeared on Jun 23, 2020 15:46:04 GMT. The current page could have changed in the meantime. Learn mare.

Full version Text-only version View source Tip: To quickly find your search term on this paga, press Ctrl+F or 36-F (Mac) and use the find bar. FREE Domestic Shipping on all Orders $75+ Ww Cart (0) Check Out NEW PRODUCTS CED Oil CED Edibles CBD Vape Juice CED Vape Pens CBD Capsules CBD Topicals CBD for Pats Visit storefront hos: webeache qeagusenconienlcomsearch7qecacha: AZ WSGFS Tags Mis: lang andheme.conbegs!chdnawsichd-benefis-ateckalehdas-.. 19 VOLUME 171 Complaint REEF INDUSTRIES, INC. 449 Complaint 6/29/2020 C&D Benefts: A Look @ CBD as a Potential Digestive Aid - AndHemp "Pharmacological modulation of the endogenous cannabinoid system could provide a new therapeutic target for the treatment of a number of gastrointestinal diseases..."

This is exciting news for people who deal with GI issues on a daily basis, especially when so many other prescription medication alternatives come along with side effects that can be just as troubling as the conditions alone.

There have been a few small formal studies to help solidify this abstract assumption that scientists have made about CBD. One small study of 46 people who had moderately severe Chron's disease showed that 65 percent of participants saw a full remission of their symptoms. There was a review published in 2008 by a neurologist that stated IBS could be a result of a clinical endocannabinoid deficiency. In 2011, one study found that CBD helped create a reduction in inflammation in the bowels caused by a pesky bacterium called bacterial lipopolysaccharides (LPS), which just happens to be a major thing in the bodies of people who have IBS. Using CBD for Digestive Issues: How Does CBD Make You Feel? One of the biggest reasons CBD is admired for its therapeutic effects is that it really does not have any psychoactive effects on the individual taking the supplement. CBD is now being produced from hemp, which naturally has extremely low amounts of THC (that little cannabinoid that causes the euphoric "high" feeling that cannabis is most known for). By law, CBD products legal for sale in all places must contain less than 0.03 percent THC.

What's all that mean? Basically, CBD isn't going to make you feel much of anything, except possibly better, of course. Side effects with CBD are rare, and when they are experienced, they are usually minimal. In a study published on PubMed, only one out of three people who used CBD to treata medical condition had a non-serious side effect. The most common side effects reported have been: « Dry mouth * Hunger * Fatigue These common side effects are really nothing to complain about if you are dealing with something like chronic stomach pain or constant bathroom trips, and for many, the side effects are barely noticeable at all.

Ntips:webcache googieusercontent com's earch 7qmcache. AZ WSGFS TaRgJ: Ms: lamp andhemp.com blogs chd-newsicbd-Denefis-atook-atcodes-... 3/5 VOLUME 171 Complaint REEF INDUSTRIES, INC. 451 Complaint auraene0 CAD enefis: A Look af CAD a3 a Potential Digestive Ald - AndHame AndHemp Cannatera Beauty Chronic Candy Knockout CBD Koi CED Livwell Loot Hemp Reef CBD Savage CBD Square Care CBD ANDHEMP SAVINGS CLUB Sign up to hear our latest news on what's Boing on. From new articles to big sales, be informed with us! SUBMIT Copyright @ 2020 AndHemop. ace op =— FE ga wsa Visit storefront hips: webcachs googeuserconlanLoomns earch 7qmcache: AZ WOGPS Tag: Mins: vamp andiemp.c am bogs! chd-ewsc bd-beneiits-atook-atond-as-... 5/5 VOLUME 171 Decision and Order DECISION The Federal Trade Commission (“Commission”) initiated an investigation of certain acts and practices of the Respondents named in the caption. The Commission’s Bureau of Consumer Protection (“BCP”) prepared and furnished to Respondents a draft Complaint. BCP proposed to present the draft Complaint to the Commission for its consideration. If issued by the Commission, the draft Complaint would charge the Respondents with violations of the Federal Trade Commission Act.

Respondents and BCP thereafter executed an Agreement Containing Consent Order (“Consent Agreement”). The Consent Agreement includes: 1) statements by Respondents that they neither admit nor deny any of the allegations in the Complaint, except as specifically stated in this Decision and Order, and that only for purposes of this action, they admit the facts necessary to establish jurisdiction; and 2) waivers and other provisions as required by the Commission’s Rules.

The Commission considered the matter and determined that it had reason to believe that Respondents have violated the Federal Trade Commission Act, and that a Complaint should issue stating its charges in that respect. The Commission accepted the executed Consent Agreement and placed it on the public record for a period of 30 days for the receipt and consideration of public comments. The Commission duly considered any comments received from interested persons pursuant to Section 2.34 of its Rules, 16 C.F.R. § 2.34. Now, in further conformity with the procedure prescribed in Rule 2.34, the Commission issues its Complaint, makes the following Findings, and issues the following Order: Findings 1. The Respondents are:

a. Respondent Reef Industries, Inc., also doing business as Reefcbd.com and Reef Wellness, is a California corporation with its principal office or place of business at 3033 Bristol Street #G, Costa Mesa, California 92626. b. Respondent Cannatera, Inc., is a California corporation with its principal office or place of business at 1235 E. Francis Street Suite M, Ontario, California 9176.

c. Respondent AndHemp, Ltd., is a United Kingdom limited company with its principal office or place of business at 1235 E. Francis Street, Ontario, California 91761.

d. Respondent Andrew M. Bouchie is an officer, director, and principal shareholder of Reef Industries, Inc., officer of Cannatera, Inc., and President and co-owner of AndHemp, Ltd. Individually or in concert with others, he formulates, directs, or controls the policies, acts, or practices of REEF INDUSTRIES, INC. 453 Decision and Order Reef, Industries, Inc., Cannatera, Inc., and AndHemp, Ltd. His principal office or place of business is the same as that of Reef Industries, Inc. e. Respondent John R. Cavanaugh is an officer, director, and principal shareholder of Reef Industries, Inc. Individually or in concert with others, he formulates, directs, or controls the policies, acts, or practices of Reef Industries, Inc. His principal office or place of business is the same as that of Reef Industries, Inc.

f. Respondent Shaun Paquette is an officer and director of Reef Industries, Inc., officer of Cannatera, Inc., and co-owner of AndHemp, Ltd. Individually or in concert with others, he formulates, directs, or controls the policies, acts, or practices of Reef Industries, Inc., Cannatera, Inc., and AndHemp, Ltd. His principal office or place of business is the same as that of Reef Industries, Inc.

2. The Commission has jurisdiction over the subject matter of this proceeding and over the Respondents, and the proceeding is in the public interest. ORDER DEFINITIONS For purposes of this Order, the following definitions apply: A. “CBD Product” means any Dietary Supplement, Food, or Drug containing cannabidiol.

B. “CBG Product” means any Dietary Supplement, Food, or Drug containing cannabigerol.

C. “Covered Product” means any Dietary Supplement, Food, or Drug, including but not limited to CBD Products or CBG Products.

D. “Dietary Supplement” means: (1) any product labeled as a dietary supplement or otherwise represented as a dietary supplement; or (2) any pill, tablet, capsule, powder, softgel, gelcap, liquid, or other similar form containing one or more ingredients that are a vitamin, mineral, herb or other botanical, amino acid, probiotic, or other dietary substance for use by humans to supplement the diet by increasing the total dietary intake, or a concentrate, metabolite, constituent, extract, or combination of any ingredient described above, that is intended to be ingested, and is not represented to be used as a conventional Food or as a sole item of a meal or the diet.

E. “Drug” means: (1) articles recognized in the official United States Pharmacopoeia, official Homoeopathic Pharmacopoeia of the United States, or VOLUME 171 Decision and Order official National Formulary, or any supplement to any of them; (2) articles intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease in humans or other animals; (3) articles (other than Food) intended to affect the structure or any function of the body of humans or other animals; and (4) articles intended for use as a component of any article specified in (1), (2), or (3); but does not include devices or their components, parts, or accessories. F. “Essentially Equivalent Product” means a product that contains the identical ingredients, except for inactive ingredients (e.g., inactive binders, colors, fillers, excipients) in the same form and dosage, and with the same route of administration (e.g., orally, sublingually), as the Covered Product; provided that the Covered Product may contain additional ingredients if reliable scientific evidence generally accepted by experts in the field indicates that the amount and combination of additional ingredients is unlikely to impede or inhibit the effectiveness of the ingredients in the Essentially Equivalent Product. G. “Food” means: (1) any article used for food or drink for humans or other animals; (2) chewing gum; and (3) any article used for components of any such article. H. “Respondents” means all of the Corporate Respondents and the Individual Respondents, individually, collectively, or in any combination. 1. “Corporate Respondents” means Reef Industries, Inc., a corporation, also doing business as Reefcbd.com and Reef Wellness, Cannatera, Inc., a corporation, AndHemp, Ltd., a limited company, and their successors and assigns.

2. “Individual Respondents” means Andrew M. Bouchie, John R. Cavanaugh, and Shaun Paquette.

PROVISIONS I. PROHIBITED REPRESENTATIONS: REGARDING HEALTH-RELATED CLAIMS REQUIRING HUMAN CLINICAL TESTING FOR SUBSTANTIATION IT IS ORDERED that Respondents, Respondents’ officers, agents, employees, and attorneys, and all other persons in active concert or participation with any of them, who receive actual notice of this Order, whether acting directly or indirectly, in connection with the manufacturing, labeling, advertising, promotion, offering for sale, sale, or distribution of any Covered Product, must not make, or assist others in making, expressly or by implication, any representation that such product:

A. treats insulin resistance; or B. cures, mitigates, or treats any disease, including but not limited to acne, Alzheimer’s disease, arthritis, autoimmune diseases, cancer, celiac disease, REEF INDUSTRIES, INC. 455 Decision and Order childhood epilepsy, chronic inflammation, chronic insomnia, chronic pain (including chronic pain from fibromyalgia, multiple sclerosis, or cancer), colitis, Crohn’s disease, damage to the colon due to chemotherapy, depression, diabetes, eczema, epilepsy, gingivitis, heart disease, irritable bowel syndrome (IBS), lupus, multiple sclerosis (MS), neurodegenerative disorders, neurological and agerelated disorders (including cerebral ischemia), obsessive compulsive disorder (OCD), panic disorder, Parkinson’s disease, post-traumatic stress disorder (PTSD), psoriasis, rosacea, seizures, seizure disorders, skin cancer, social anxiety disorder, or strokes, unless the representation is non-misleading, and, at the time of making such representation, they possess and rely upon competent and reliable scientific evidence substantiating that the representation is true. For purposes of this Provision, competent and reliable scientific evidence must consist of human clinical testing of the Covered Product, or of an Essentially Equivalent Product, that is sufficient in quality and quantity based on standards generally accepted by experts in the relevant disease, condition, or function to which the representation relates, when considered in light of the entire body of relevant and reliable scientific evidence, to substantiate that the representation is true. Such testing must be: (1) randomized, double-blind, and placebocontrolled; and (2) conducted by researchers qualified by training and experience to conduct such testing. In addition, all underlying or supporting data and documents generally accepted by experts in the field as relevant to an assessment of such testing as described in the Provision entitled Preservation of Records Relating to Competent and Reliable Human Clinical Tests or Studies must be available for inspection and production to the Commission. Persons covered by this Section have the burden of proving that a product satisfies the definition of Essentially Equivalent Product.

II. PROHIBITED REPRESENTATIONS: OTHER HEALTH-RELATED CLAIMS IT IS FURTHER ORDERED that Respondents, Respondents’ officers, agents, employees, and attorneys, and all other persons in active concert or participation with any of them, who receive actual notice of this Order, whether acting directly or indirectly, in connection with the manufacturing, labeling, advertising, promotion, offering for sale, sale, or distribution of any Covered Product must not make, or assist others in making, expressly or by implication, any representation, other than representations covered under the Provision of this Order entitled Prohibited Representations: Regarding Health-Related Claims Requiring Human Clinical Testing For Substantiation, about the health benefits, performance, efficacy, safety, or side effects of any Covered Product, including that such product prevents Alzheimer’s disease, autoimmune diseases, arthritis, cancer, diabetes, heart disease, seizures, skin cancer or other diseases, unless the representation is non-misleading, and, at the time of making such representation, they possess and rely upon competent and reliable scientific evidence that is sufficient in quality and quantity based on standards generally accepted by experts in the relevant disease, condition, or function to which the representation relates, when considered in light of the entire body of relevant and reliable scientific evidence, to substantiate that the representation is true. VOLUME 171 Decision and Order For purposes of this Provision, competent and reliable scientific evidence means tests, analyses, research, or studies (1) that have been conducted and evaluated in an objective manner by experts in the relevant disease, condition, or function to which the representation relates; (2) that are generally accepted by such experts to yield accurate and reliable results; and (3) that are randomized, double-blind, and placebo-controlled human clinical testing of the Covered Product, or of an Essentially Equivalent Product, when such experts would generally require such human clinical testing to substantiate that the representation is true. In addition, when such tests or studies are human clinical tests or studies, all underlying or supporting data and documents generally accepted by experts in the field as relevant to an assessment of such testing as set forth in the Provision entitled Preservation of Records Relating to Competent and Reliable Human Clinical Tests or Studies must be available for inspection and production to the Commission. Persons covered by this Provision have the burden of proving that a product satisfies the definition of Essentially Equivalent Product.

III. PRESERVATION OF RECORDS RELATING TO COMPETENT AND RELIABLE HUMAN CLINICAL TESTS OR STUDIES IT IS FURTHER ORDERED that, with regard to any human clinical test or study (“test”) upon which Respondents rely to substantiate any claim covered by this Order, Respondents must secure and preserve all underlying or supporting data and documents generally accepted by experts in the field as relevant to an assessment of the test, including: A. All protocols and protocol amendments, reports, articles, write-ups, or other accounts of the results of the test, and drafts of such documents reviewed by the test sponsor or any other person not employed by the research entity; B. All documents referring or relating to recruitment; randomization; instructions, including oral instructions, to participants; and participant compliance; C. Documents sufficient to identify all test participants, including any participants who did not complete the test, and all communications with any participants relating to the test; all raw data collected from participants enrolled in the test, including any participants who did not complete the test; source documents for such data; any data dictionaries; and any case report forms; D. All documents referring or relating to any statistical analysis of any test data, including any pretest analysis, intent-to-treat analysis, or between-group analysis performed on any test data; and E. All documents referring or relating to the sponsorship of the test, including all communications and contracts between any sponsor and the test’s researchers. Provided, however, the preceding preservation requirement does not apply to a reliably reported test, unless the test was conducted, controlled, or sponsored, in whole or in part by: (1) any Respondent; (2) any Respondent’s officers, agents, representatives, or employees; (3) any other person or entity in active concert or participation with any Respondent; (4) any person or entity REEF INDUSTRIES, INC. 457 Decision and Order affiliated with or acting on behalf of any Respondent; (5) any supplier of any ingredient contained in the product at issue to any of the foregoing or to the product’s manufacturer; or (6) the supplier or manufacturer of such product.

For purposes of this Provision, “reliably reported test” means a report of the test has been published in a peer-reviewed journal, and such published report provides sufficient information about the test for experts in the relevant field to assess the reliability of the results. For any test conducted, controlled, or sponsored, in whole or in part, by Respondents, Respondents must establish and maintain reasonable procedures to protect the confidentiality, security, and integrity of any personal information collected from or about participants. These procedures must be documented in writing and must contain administrative, technical, and physical safeguards appropriate to Corporate Respondents’ size and complexity, the nature and scope of Respondents’ activities, and the sensitivity of the personal information collected from or about the participants.

IV. PROHIBITED MISREPRESENTATIONS REGARDING TESTS, STUDIES, OR OTHER RESEARCH IT IS FURTHER ORDERED that Respondents, Respondents’ officers, agents, employees, and attorneys, and all other persons in active concert or participation with any of them, who receive actual notice of this Order, whether acting directly or indirectly, in connection with the manufacturing, labeling, advertising, promotion, offering for sale, sale, or distribution of any product must not misrepresent, in any manner, expressly or by implication: A. That any Covered Product is scientifically proven to treat acne, arthritis, autoimmune disease, cancer, childhood epilepsy, chronic inflammation, chronic insomnia, colitis, chronic pain (including chronic pain from fibromyalgia, multiple sclerosis, or cancer), Crohn’s disease, damage to the colon due to chemotherapy, depression, epilepsy, gingivitis, heart disease, irritable bowel syndrome (IBS), multiple sclerosis (MS), neurological and age-related disorders (including cerebral ischemia), obsessive compulsive disorder (OCD), panic disorder, Parkinson’s disease, post-traumatic stress disorder (PTSD), psoriasis, seizures, social anxiety disorder, or stroke;

B. That any Covered product is scientifically proven to prevent acne, heart disease, seizures, skin cancer, or skin infections;

C. That the performance or benefits of any product are scientifically or clinically proven or otherwise established; or D. The existence, contents, validity, results, conclusions, or interpretations of any test, study, or other research.

VOLUME 171 Decision and Order V. FDA-APPROVED CLAIMS IT IS FURTHER ORDERED that nothing in this Order prohibits Respondents, Respondents’ officers, agents, employees, and attorneys, and all other persons in active concert or participation with any of them from:

A. For any Drug, making a representation that is approved in labeling for such Drug under any tentative final or final monograph promulgated by the Food and Drug Administration, or under any new drug application approved by the Food and Drug Administration; and B. For any product, making a representation that is specifically authorized for use in labeling for such product by regulations promulgated by the Food and Drug Administration pursuant to the Nutrition Labeling and Education Act of 1990 or permitted under Sections 303-304 of the Food and Drug Administration Modernization Act of 1997.

VI. MONETARY RELIEF IT IS FURTHER ORDERED that:

A. Respondents must pay to the Commission $85,000.00, which Respondents stipulate their undersigned counsel holds in escrow for no purpose other than payment to the Commission.

B. Such payment must be made within 8 days of the effective date of this Order by electronic fund transfer in accordance with instructions provided by a representative of the Commission.

VII. ADDITIONAL MONETARY PROVISIONS IT IS FURTHER ORDERED that:

A. Respondents relinquish dominion and all legal and equitable right, title, and interest in all assets transferred pursuant to this Order and may not seek the return of any assets.

B. The facts alleged in the Complaint will be taken as true, without further proof, in any subsequent civil litigation by or on behalf of the Commission to enforce its rights to any payment pursuant to this Order, such as a nondischargeability complaint in any bankruptcy case.

C. The facts alleged in the Complaint establish all elements necessary to sustain an action by or on behalf of the Commission pursuant to Section 523(a)(2)(A) of the Bankruptcy Code, 11 U.S.C. § 523(a)(2)(A), and this Order will have collateral estoppel effect for such purposes.

REEF INDUSTRIES, INC. 459 Decision and Order D. All money paid to the Commission pursuant to this Order may be deposited into a fund administered by the Commission or its designee to be used for relief, including consumer redress and any attendant expenses for the administration of any redress fund. If a representative of the Commission decides that direct redress to consumers is wholly or partially impracticable or money remains after redress is completed, the Commission may apply any remaining money for such other relief (including consumer information remedies) as it determines to be reasonably related to Respondents’ practices alleged in the Complaint. Any money not used is to be deposited to the U.S. Treasury. Respondents have no right to challenge any activities pursuant to this Provision. E. In the event of default on any obligation to make payment under this Order, interest, computed as if pursuant to 28 U.S.C. § 1961(a), shall accrue from the date of default to the date of payment. In the event such default continues for 10 days beyond the date that payment is due, the entire amount will immediately become due and payable.

F. Each day of nonpayment is a violation through continuing failure to obey or neglect to obey a final order of the Commission and thus will be deemed a separate offense and violation for which a civil penalty shall accrue. G. Respondents acknowledge that their Taxpayer Identification Numbers (Social Security or Employer Identification Numbers), which Respondents have previously submitted to the Commission, may be used for collecting and reporting on any delinquent amount arising out of this Order, in accordance with 31 U.S.C. § 7701.

VIII. CUSTOMER INFORMATION IT IS FURTHER ORDERED that Respondents must directly or indirectly provide sufficient customer information, including sufficient identification of all resellers, to enable the Commission to efficiently administer consumer redress to all purchasers of Respondents’ CBD Products. If a representative of the Commission requests in writing any information related to redress, Respondents must provide it, in the form prescribed by the Commission representative, within 14 days.

IX. NOTICES TO CUSTOMERS IT IS FURTHER ORDERED that Respondents must notify customers as follows: A. Respondents must identify all consumers who purchased CBD Products on or after January 1, 2019 (“eligible customers”).

1. Such eligible customers, and their contact information, must be identified to the extent such information is in Respondents’ possession, custody or control, including from third parties such as resellers; VOLUME 171 Decision and Order 2. Eligible customers include those identified at any time, including after Respondents’ execution of the Agreement through the eligibility period, which runs for 1 year after the issuance date of the Order. B. Respondents must notify all identified eligible customers by mailing each a notice:

1. The letter must be in the form shown in Attachment A. 2. The envelope containing the letter must be in the form shown in Attachment B.

3. The mailing of the notification letter must not include any other enclosures.

4. The mailing must be sent by first-class mail, postage prepaid, address correction service requested with forwarding and return postage guaranteed. For any mailings returned as undeliverable, Respondents must use standard address search methodologies such as re-checking Respondents’ records and the Postal Service’s National Change of Address database and re-mailing to the corrected address within 8 days. C. Respondents must notify all eligible customers within 180 days after the issuance date of this Order and any eligible customers identified thereafter within 30 days of their identification.

D. Respondents must provide a notice on all of their social media accounts (including any Facebook, Twitter, Instagram, or YouTube accounts) and on the first page of their websites. Such notice must link to a copy of the Order, along with a toll-free telephone number and an email address for the redress administrator. The notice must be posted not later than 3 days after the effective date of the Order and for at least 1 year after the redress period ends. E. Respondents must report on their notification program under penalty of perjury: 1. Respondents must submit a report annually and at the conclusion of the program summarizing its compliance to date, including the total number of eligible customers identified and notified.

2. If a representative of the Commission requests any information regarding the program, including any of the underlying customer data, Respondents must submit it within 10 days of the request.

3. Failure to provide required notices or any requested information will be treated as a continuing failure to obey this Order.

REEF INDUSTRIES, INC. 461 Decision and Order X. NOTICE TO AFFILIATES AND OTHER RESELLERS IT IS FURTHER ORDERED that within 30 days of the effective date of this Order, Respondents must notify all affiliates and other resellers by sending each by first-class mail, postage paid and return receipt requested, or by courier service with signature proof of delivery, the notification letter attached as Attachment A. Respondents must include a copy of this Order, but no other document or enclosure.

XI. ACKNOWLEDGMENTS OF THE ORDER IT IS FURTHER ORDERED that Respondents obtain acknowledgments of receipt of this Order:

A. Each Respondent, within 10 days after the effective date of this Order, must submit to the Commission an acknowledgment of receipt of this Order sworn under penalty of perjury.

B. For 20 years after the issuance date of this Order, each Individual Respondent for any business that such Respondent, individually or collectively with any other Respondents, is the majority owner or controls directly or indirectly, and each Corporate Respondent, must deliver a copy of this Order to: (1) all principals, officers, directors, and LLC managers and members; (2) all employees having managerial responsibilities for labeling, manufacturing, advertising, marketing, promotion, distribution, offering for sale, or sale of CBD or CBG Products and all agents and representatives who participate in labeling, manufacturing, advertising, marketing, promotion, distribution, offering for sale, or sale of CBD or CBG Products; and (3) any business entity resulting from any change in structure as set forth in the Provision titled Compliance Reports and Notices. Delivery must occur within 10 days after the effective date of this Order for current personnel. For all others, delivery must occur before they assume their responsibilities. C. From each individual or entity to which a Respondent delivered a copy of this Order, that Respondent must obtain, within 30 days, a signed and dated acknowledgment of receipt of this Order.

XII. COMPLIANCE REPORTS AND NOTICES IT IS FURTHER ORDERED that Respondents make timely submissions to the Commission:

A. Sixty days after the issuance date of this Order, each Respondent must submit a compliance report, sworn under penalty of perjury, in which: 1. Each Respondent must: (a) identify the primary physical, postal, and email address and telephone number, as designated points of contact, which representatives of the Commission, may use to communicate with VOLUME 171 Decision and Order Respondent; (b) identify all of that Respondent’s businesses by all of their names, telephone numbers, and physical, postal, email, and Internet addresses; (c) describe the activities of each business, including the goods and services offered, the means of advertising, marketing, and sales, and the involvement of any other Respondent (which Individual Respondents must describe if they know or should know due to their own involvement); (d) describe in detail whether and how that Respondent is in compliance with each Provision of this Order, including a discussion of all of the changes the Respondent made to comply with the Order; and (e) provide a copy of each Acknowledgment of the Order obtained pursuant to this Order, unless previously submitted to the Commission.

2. Additionally, each Individual Respondent must: (a) identify all his telephone numbers and all his physical, postal, email and Internet addresses, including all residences; (b) identify all his business activities, including any business for which such Respondent performs services whether as an employee or otherwise and any entity in which such Respondent has any ownership interest; and (c) describe in detail such Respondent’s involvement in each such business activity, including title, role, responsibilities, participation, authority, control, and any ownership. B. Each Respondent must submit a compliance notice, sworn under penalty of perjury, within 14 days of any change in the following: 1. Each Respondent must submit notice of any change in: (a) any designated point of contact; or (b) the structure of any Corporate Respondent or any entity that Respondent has any ownership interest in or controls directly or indirectly that may affect compliance obligations arising under this Order, including: creation, merger, sale, or dissolution of the entity or any subsidiary, parent, or affiliate that engages in any acts or practices subject to this Order.

2. Additionally, each Individual Respondent must submit notice of any change in: (a) name, including alias or fictitious name, or residence address; or (b) title or role in any business activity, including (i) any business for which such Respondent performs services whether as an employee or otherwise and (ii) any entity in which such Respondent has any ownership interest and over which Respondents have direct or indirect control. For each such business activity, also identify its name, physical address, and any Internet address.

C. Each Respondent must submit notice of the filing of any bankruptcy petition, insolvency proceeding, or similar proceeding by or against such Respondent within 14 days of its filing.

REEF INDUSTRIES, INC. 463 Decision and Order D. Any submission to the Commission required by this Order to be sworn under penalty of perjury must be true and accurate and comply with 28 U.S.C. § 1746, such as by concluding: “I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. Executed on: _____” and supplying the date, signatory’s full name, title (if applicable), and signature.

E. Unless otherwise directed by a Commission representative in writing, all submissions to the Commission pursuant to this Order must be emailed to [email protected] or sent by overnight courier (not the U.S. Postal Service) to: Associate Director for Enforcement, Bureau of Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue NW, Washington, DC 20580. The subject line must begin: In re Reef Industries, Inc., FTC File No. 202-3064. XIII. RECORDKEEPING IT IS FURTHER ORDERED that Respondents must create certain records for 20 years after the issuance date of the Order, and retain each such record for 5 years, unless otherwise specified below. Specifically, Corporate Respondents and each Individual Respondent for any business that such Respondent, individually or collectively with any other Respondents, is a majority owner or controls directly or indirectly, must create and retain the following records: A. Accounting records showing the revenues from all goods or services sold, the costs incurred in generating those revenues, and resulting net profit or loss; B. Personnel records showing, for each person providing services in relation to any aspect of the Order, whether as an employee or otherwise, that person’s: name; addresses; telephone numbers; job title or position; dates of service; and (if applicable) the reason for termination;

C. Copies or records of all consumer complaints and refund requests, whether received directly or indirectly, such as through a third party, and any response; D. All records necessary to demonstrate full compliance with each provision of this Order, including all submissions to the Commission;

E. A copy of each unique advertisement or other marketing material making a representation subject to this Order;

F. For 5 years from the date of the last dissemination of any representation covered by this Order:

1. All materials that were relied upon in making the representation; and 2. All tests, studies, analysis, other research, or other such evidence in Respondents’ possession, custody, or control that contradicts, qualifies, or VOLUME 171 Decision and Order otherwise calls into question the representation, or the basis relied upon for the representation, including complaints and other communications with consumers or with governmental or consumer protection organizations.

K. For 5 years from the date received, copies of all subpoenas and other communications with law enforcement, if such communications relate to Respondents’ compliance with this Order.

L. For 5 years from the date created or received, all records, whether prepared by or on behalf of Respondents, that tend to show any lack of compliance by Respondents with this Order.

XIV. COMPLIANCE MONITORING IT IS FURTHER ORDERED that, for the purpose of monitoring Respondents’ compliance with this Order:

A. Within 10 days of receipt of a written request from a representative of the Commission, each Respondent must: submit additional compliance reports or other requested information, which must be sworn under penalty of perjury, and produce records for inspection and copying.

B. For matters concerning this Order, representatives of the Commission are authorized to communicate directly with each Respondent. Respondents must permit representatives of the Commission to interview anyone affiliated with any Respondent who has agreed to such an interview. The interviewee may have counsel present.

C. The Commission may use all other lawful means, including posing through its representatives as consumers, suppliers, or other individuals or entities, to Respondents or any individual or entity affiliated with Respondents, without the necessity of identification or prior notice. Nothing in this Order limits the Commission’s lawful use of compulsory process, pursuant to Sections 9 and 20 of the FTC Act, 15 U.S.C. §§ 49, 57b-1.

D. Upon written request from a representative of the Commission, any consumer reporting agency must furnish consumer reports concerning Individual Respondents, pursuant to Section 604(2) of the Fair Credit Reporting Act, 15 U.S.C. § 1681b(a)(2).

XV. ORDER EFFECTIVE DATES IT IS FURTHER ORDERED that this Order is final and effective upon the date of its publication on the Commission’s website (ftc.gov) as a final order. This Order will terminate 20 years from the date of its issuance (which date may be stated at the end of this Order, near the REEF INDUSTRIES, INC. 465 Decision and Order Commission’s seal), or 20 years from the most recent date that the United States or the Commission files a complaint (with or without an accompanying settlement) in federal court alleging any violation of this Order, whichever comes later; provided, however, that the filing of such a complaint will not affect the duration of:

A. Any Provision in this Order that terminates in less than 20 years; B. This Order’s application to any Respondent that is not named as a defendant in such complaint; and C. This Order if such complaint is filed after the Order has terminated pursuant to this Provision.

Provided, further, that if such complaint is dismissed or a federal court rules that the Respondent did not violate any provision of the Order, and the dismissal or ruling is either not appealed or upheld on appeal, then the Order will terminate according to this Provision as though the complaint had never been filed, except that the Order will not terminate between the date such complaint is filed and the later of the deadline for appealing such dismissal or ruling and the date such dismissal or ruling is upheld on appeal.

By the Commission.

ATTACHMENT A TO THE ORDER CLAIMS ABOUT PRODUCTS CONTAINING CBD In the Matter of Reef Industries, Inc., et al.

<Date> Subject: [Insert name of product customer will recognize] <Name of customer> <mailing address of customer including zip code> Dear <Name of customer>:

Our records show that you bought [names of products] from [our company or other name consumers will recognize – the retailer, perhaps]. We are writing to tell you that the Federal Trade Commission (FTC), the nation’s consumer protection agency, has charged us with deceptive or false advertising.

VOLUME 171 Decision and Order Specifically, the FTC sued [our company or other name consumers will recognize – the retailer, perhaps] for making misleading claims that our CBD products can effectively prevent, cure, treat, or ease serious diseases and health conditions, including the following: Acne; Alzheimer’s disease; arthritis; autoimmune disease; cancer; celiac disease; childhood epilepsy; chronic inflammation; chronic insomnia; chronic pain (including chronic pain from fibromyalgia, multiple sclerosis, and cancer), colitis; Crohn’s disease; damage to the colon due to chemotherapy; depression; diabetes; eczema; epilepsy; gingivitis; heart disease; insulin resistance; irritable bowel syndrome (IBS); lupus; multiple sclerosis; neurodegenerative disorders; neurological and age-related disorders (including cerebral ischemia); obsessive-compulsive disorder (OCD); panic disorder; Parkinson’s disease; post-traumatic stress disorder (PTSD); psoriasis; rosacea; seizures; seizure disorders; skin cancer; skin infections; social anxiety disorder; and stroke. To settle the FTC’s lawsuit, we’re contacting our customers to tell them that we don’t have proof that our CBD products will effectively prevent, cure, treat, or improve the serious diseases and health conditions listed above.

As a part of this lawsuit, you may be entitled to a refund. Please visit [URL] for more information about refunds. If you have other questions about this lawsuit, visit [add URL]. CBD oil and other alternative treatments might be harmful to your medical care, and could interfere with your prescriptions. CBD products could also be dangerous if you take them with other medicines or at a high dose. Talk to your doctor before you take any treatments or stop any prescriptions. For more information about protecting yourself from bogus health product claims visit ftc.gov/health.

[signature] [identify Respondent/Defendant or other person responsible for signing the notification letter] ATTACHMENT B to the Order – Envelope Template:

The envelope for the notification letter must be in the following form, with the underlined text completed as directed:

[Identify Respondent Street Address City, State and Zip Code] REEF INDUSTRIES, INC. 467 Concurring Statement FORWARDING AND RETURN POSTAGE GUARANTEED ADDRESS CORRECTION SERVICE REQUESTED [name and mailing address of customer, including zip code] ABOUT YOUR PURCHASE OF [NAME PRODUCT] STATEMENT OF COMMISSIONER ROHIT CHOPRA Summary • When companies lie about the effectiveness of their treatments for serious conditions, this harms patients and diverts sales away from firms that tell the truth. • Congress gave the FTC a new authority to crack down on abuses in the opioid treatment industry, but the agency has not prioritized this issue. This should change. • The FTC can increase its effectiveness when it comes to health claims by shifting resources away from small businesses and by deploying the unused Penalty Offense Authority.

Today, the Federal Trade Commission is taking action against several outfits regarding their outlandish – and unlawful – claims about cannabidiol (CBD). While CBD is currently the subject of considerable scientific research, there is no evidence yet that CBD can treat or cure cancer, Alzheimer’s, or other serious diseases. Baseless claims give patients false hope, improperly increase or divert their medical spending, and undermine “a competitor’s ability to compete” on honest attributes.1 I support these actions and congratulate those who made them a reality. Going forward, however, the FTC will need to refocus its efforts on health claims by targeting abuses in the substance use disorder treatment industry, shifting attention toward large businesses, and making more effective use of the FTC’s Penalty Offense Authority. First, COVID-19 and the resulting economic and social distress are fueling new concerns about substance use disorders. In particular, there are signs that the pandemic is leading to 1 In re Pfizer, Inc., 81 F.T.C. 23, 62 (1972).

VOLUME 171 Concurring Statement greater dependence on opioids.2 It is critical that the FTC take steps to prevent exploitation of patients seeking treatment for substance use disorders. I am particularly concerned about abusive practices in the for-profit opioid treatment industry, and believe this should be a high priority. This industry has grown exponentially by profiting off those suffering from addiction. Many of these outfits use lead generators to steer Americans into high-cost, subpar treatment centers, and some even hire intermediaries – socalled “body brokers” – who collect kickbacks from this harmful practice.3 More than two years ago, Congress passed the SUPPORT for Patients and Communities Act. Among other provisions, the Act authorized the Commission to seek civil penalties, restitution, damages, and other relief against outfits that engage in misconduct related to substance use disorder treatment.4 The Commission is well positioned to help shut down these abuses, ensure they are not profitable, and hold predatory actors and their enablers to account.5 Unfortunately, the Commission has brought zero cases under this new authority. While I have supported actions like this one that challenge baseless CBD claims, as well as previous actions charging that pain relief devices and similar products were sold deceptively,6 I am concerned that we have largely ignored Congressional concerns about unlawful opioid treatment practices. I urge my fellow Commissioners to change course on our enforcement priorities, especially given our limited resources.

2 See, e.g., Jon Kamp & Arian Campo-Flores, The Opioid Crisis, Already Serious, Has Intensified During Coronavirus Pandemic, WALL STREET J. (Sept. 8, 2020), https://www.wsj.com/articles/the-opioid-crisis-already­ serious-has-intensified-during-coronavirus-pandemic-11599557401; Issue brief: Reports of increases in opioid- and other drug-related overdose and other concerns during COVID pandemic, AMERICAN MEDICAL ASSOCIATION (last updated on Oct. 31, 2020), https://www.ama-assn.org/delivering-care/opioids/covid-19-may-be-worsening-opioid­ crisis-states-can-take-action.

3 For example, recent reporting describes the “Florida Shuffle,” where treatment facilities pay brokers to recruit patients through 12-step meetings, conferences, hotlines, and online groups, leading to serious harm. See German Lopez, She wanted addiction treatment. She ended up in the relapse capital of America, VOX (Mar. 2, 2020), https://www.vox.com/policy-and-politics/2020/3/2/21156327/florida-shuffle-drug-rehab-addiction-treatment-bri­ jayne. See also Letter from Commissioner Chopra to Congress on Deceptive Marketing Practices in the Opioid Addiction Treatment Industry (July 28, 2018), https://www ftc.gov/public-statements/2018/07/letter-commissioner­ chopra-congress-deceptive-marketing-practices-opioid (calling on the FTC to do more to tackle this problem). 4 Pub. L. No. 115-271 §§ 8021-8023 (codified in 15 U.S.C. § 45d). The Act also allows the Commission to prosecute deceptive marketing of opioid treatment products. Notably, a number of respondents in this sweep are alleged to have made claims that CBD could replace OxyContin. 5 Given public reports regarding private equity rollups of smaller opioid treatment facilities, the Commission can also examine whether anticompetitive M&A strategies are leading to further patient harm. See Statement of Commissioner Rohit Chopra Regarding Private Equity Roll-ups and the Hart-Scott-Rodino Annual Report to Congress, Commu File No. P110014 (July 8, 2020), https://www.ftc.gov/public-statements/2020/07/statement­ commissioner-rohit-chopra-regarding-private-equity-roll-ups-hart. 6 Press Release, Fed. Trade Commu, Marketers of Pain Relief Device Settle FTC False Advertising Complaint (Mar. 4, 2020), https://www.ftc.gov/news-events/press-releases/2020/03/marketers-pain-relief-device-settle-ftc­ false-advertising.

REEF INDUSTRIES, INC. 469 Concurring Statement Second, the FTC should focus more of its enforcement efforts on larger firms rather than small businesses. Today’s actions focus on very small players, some of which are defunct. While I appreciate that small businesses can also harm honest competitors and families, they are often judgment-proof, making it unlikely victims will see any relief.7 I am confident that FTC staff can successfully challenge powerful, well-financed defendants that break the law. Finally, the Commission should reduce the prevalence of unlawful health claims by triggering civil penalties under the FTC’s Penalty Offense Authority.8 Under the Penalty Offense Authority, firms that engage in conduct they know has been previously condemned by the Commission can face civil penalties, in addition to the relief that we typically seek.9 For example, the Commission routinely issues warning letters to businesses regarding unsubstantiated health claims. Future warning letters can be more effective if they include penalty offense notifications.

The Commission has repeatedly found that objective claims require a reasonable basis,10 and apprising firms of these findings – along with a warning that noncompliance can result in penalties – makes it significantly more likely they will come into compliance voluntarily. In fact, when the Commission employed this strategy four decades ago, it reportedly resulted in a “high level of voluntary compliance achieved quickly and at a low cost.”11 Going forward, we should pursue this strategy.12 7 In one of these matters, the respondents are paying nothing. 8 15 U.S.C. § 45(m)(1)(b).

9 See Rohit Chopra & Samuel A.A. Levine, The Case for Resurrecting the FTC Act’s Penalty Offense Authority (Oct. 29, 2020), https://papers.ssrn.com/sole/papers.cfm?abstract id=3721256. Particularly given challenges to the FTC’s 13(b) authority, incorporating a penalty offense strategy can safeguard the Commission’s ability to seek strong remedies against lawbreakers.

10 This requirement was first established in the Commission’s 1972 Pfizer decision, and it has been affirmed repeatedly. Pfizer, Inc., supra note 2 (finding that “[f]airness to the consumer, as well as fairness to competitors” compels the conclusion that affirmative claims require a reasonable basis); In re Thompson Medical Co., 104 F.T.C. 648, 813 (1984) (collecting cases), aff’d, 791 F.2d 189 (D.C. Cir. 1986). Appended to Thompson Medical was the Commission’s Policy Statement Regarding Advertising Substantiation, which states that “a firm’s failure to possess and rely upon a reasonable basis for objective claims constitutes an unfair and deceptive act or practice in violation of Section 5 of the Federal Trade Commission Act.” Id. at 839. This standard continues to govern the Commission’s approach to substantiation, as recently reaffirmed in the Commission’s final order against POM Wonderful. In re POM Wonderful LLC et al., 155 F.T.C. 1, 6 (2013).

11 Commissioner Bailey made this observation in the context of opposing industry efforts to repeal this authority, an authority she described as an “extremely effective and efficient way to enforce the law.” Testimony of Commissioner Patricia P. Bailey Before the Subcomm. on Com., Tourism and Transp. of the Comm. on Energy and Com. of the H.R. Concerning the 1982 Reauthorization of the Fed. Trade Commu, at 11 (Apr. 1, 1982), https://www.ftc.gov/system/files/documents/public statements/693551/19820401 bailey testimony before the sub corrmittee on commerce subcommittee on commerce touri.pdf. 12 My colleague, Commissioner Christine S. Wilson, has issued a statement in this matter. I agree that the Commission should not prioritize close-call substantiation cases, especially those involving small businesses. VOLUME 171 Concurring Statement I thank everyone who made today’s actions possible, and look forward to future efforts that address emerging harms using the full range of our tools and authorities. CONCURRING STATEMENT OF COMMISSIONER CHRISTINE S. WILSON Today the Commission announces six settlements with marketers of cannabidiol (CBD) products resolving allegations that they made false, misleading, and/or unsubstantiated express disease claims for their products. I support these cases because accurate and complete information about products contributes to the efficient functioning of the market and facilitates informed consumer decision-making. In contrast, deceptive or false claims inhibit informed decision-making and may cause economic injury to consumers. The Commission’s complaints in these matters allege that the marketers claimed their products could treat, prevent, or cure diseases or serious medical conditions, including cancer, heart disease, Alzheimer’s, diabetes, and Parkinson’s disease, and that scientific research or clinical studies supported these claims. In fact, according to the Commission’s complaints, the proposed respondents did not conduct scientific research on the efficacy of their products to treat these diseases or conditions. In addition, the complaints allege that some of the proposed respondents claimed that their products could be taken in lieu of prescription medication. The Commission has been working with the FDA, and on its own, to combat false and unsubstantiated claims for CBD products, including through warning letters1 and a law enforcement action.2 Here, where consumers may have foregone proven measures to address serious diseases and the marketers have made virtually no effort to possess and rely on scientific evidence to support their strong, express disease claims, as we allege in our complaint, I agree that law enforcement is appropriate.

1 Press Release, FTC and FDA Warn Florida Company Marketing CBD Products about Claims Related to Treating Autism, ADHD, Parkinson’s, Alzheimer’s, and Other Medical Conditions, Oct. 22, 2019, available at https://www.ftc.gov/news-events/press-releases/2019/10/ftc-fda-warn-florida-company-marketing-cbd­ productsabout-claims; Press Release, FTC Sends Warning Letters to Companies Advertising Their CBD-Infused Products as Treatmentsfor Serious Diseases, Including Cancer, Alzheimer’s, and Multiple Sclerosis, Sept. 10, 2019, available at https://www.ftc.gov/news-events/press-releases/2019/09/ftc-sends-warning-letters-companies­ advertising-their-cbdinfused; Press Release, FTC Joins FDA in Sending Warning Letters to Companies Advertising and Selling Products Containing Cannabidiol (CBD) Claiming to Treat Alzheimer’s, Cancer, and Other Diseases, Apr. 2, 2019, available at https://www.ftc.gov/news-events/press-releases/2019/04/ftc-joins-fda-sending-warning­ letters-companiesadvertising.

2 Press Release, FTC Order Stops the Marketer of “Thrive” Supplement from Making Baseless Claims It Can Treat, Prevent, or Reduce the Risks from COVID-19, July 10, 2020, available at https://www.ftc.gov/newsevents/press­ releases/2020/07/ftc-order-stops-marketer-thrive-supplement-making-baseless-claims. REEF INDUSTRIES, INC. 471 Concurring Statement The Commission’s proposed consent orders in these matters require respondents to possess and rely on competent and reliable evidence, defined as randomized, double-blind, placebo- controlled human clinical trials to support disease and other serious health claims for these types of products in the future.3 Although I support this requirement in these cases, for these types of claims, I caution that the Commission should impose this stringent substantiation requirement sparingly. Credible science supports the use of CBD products to treat certain conditions – specifically, the FDA has approved a drug containing CBD as an active ingredient to treat rare, severe forms of epilepsy.4 And I understand that many research studies are currently seeking to determine whether there are other scientifically valid and safe uses of this ingredient. I agree with my predecessors who have stated that the Commission should be careful to avoid imposing an unduly high standard of substantiation that risks denying consumers truthful, useful information, may diminish incentives to conduct research, and could chill manufacturer incentives to introduce new products to the market.5 And I agree with the observation of my colleague Commissioner Chopra in his statement that “[b]aseless claims give patients false hope, improperly increase or divert their medical spending, and undermine ‘a competitor’s ability to compete’ on honest attributes.”6 Although I support these cases, I hope that the Commission’s actions here, which challenge wholly unsubstantiated disease claims, do not discourage research into the potential legitimate benefits of CBD and a wide array of other products. In addition, going forward, I urge the Commission to focus our scarce resources on marketers that make strong, express claims about diseases and serious health issues with little to no scientific support and engage in deceptive practices that cause substantial consumer injury. 3 See, e.g., Part I of Proposed Order, In the Matter of Bionatrol Health, LLC, et. al. (Dec. 2020). 4 See FDA Press Release, FDA approves first drug comprised of an active ingredient derived from marijuana to treat rare, severe forms of epilepsy (June 25, 2018), available at: https://www.fda.gov/news-events/press­ announcements/fda-approves-first-drug-comprised-active-ingredient-derived-marijuana-treat-rare-severe-forms. 5 See, e.g., Statement of Commissioner Maureen K. Ohlhausen, In the Matter of Health Discovery Corporation and FTC v. Avrom Boris Lasarow, et al. (Feb. 2015), https://www ftc.gov/public-statements/2015/02/dissenting­ statement-commissioner-maureen-k-ohlhausen-matter-health; Statement of Commissioner Joshua D. Wright, FTC v. Kevin Wright; HCG Platinum, LLC; and Right Way Nutrition, LLC (Dec. 2014), https://www.ftc.gov/public­ statements/2014/12/statement-commissioner-joshua-d-wright-federal-trade-commission-v-kevin; Statement of Commissioner Joshua D. Wright, In the Matter of Genelink, Inc., and foru International Corporation (January 2014), https://www ftc.gov/public-statements/2014/01/statement-commissioner-joshua-d-wright-matter-genelink­ inc-foru; Statement of Commissioner Maureen K. Ohlhausen Dissenting in Part and Concurring in Part, In the Matter of Genelink, Inc. and foru International Corporation (January 2014), https://www.ftc.gov/public­ statements/2014/01/statement-commissioner-maureen-k-ohlhausen-dissenting-part-concurring-part; Dissenting Statement of Commissioner Maureen K. Ohlhausen, FTC v. Springtech 77376, et al. (July 2013), https://www.ftc.gov/public-statements/2013/07/dissenting-statement-commissioner-maureen-k-ohlhausen; see also J. Howard Beales, III and Timothy J. Muris, In Defense of the Pfizer Factors, George Mason Law & Economics Research Paper No. 12-49 (May 2012), available at: https://papers.ssrn.com/sole/papers.cfm?abstract id=2087776. 6 See Statement of Commissioner Rohit Chopra Regarding the Cannabidiol (CBD) Enforcement Actions (Dec. 17, 2020).

VOLUME 171 Analysis to Aid Public Comment ANALYSIS OF CONSENT ORDER TO AID PUBLIC COMMENT The Federal Trade Commission (“FTC” or “Commission”) has accepted, subject to final approval, an agreement containing a consent order with Reef Industries, Inc., a corporation, Cannatera, Inc., a corporation, AndHemp, Ltd., a limited company, and Andrew M. Bouchie, John R. Cavanaugh, and Shaun Paquette, individually and as officers and/or owners of Reef Industries, Inc., Cannatera, Inc., and/or AndHemp, Ltd. (collectively, “Respondents”). The proposed consent order (“Order”) has been placed on the public record for 30 days for receipt of comments by interested persons. Comments received during this period will become part of the public record. After 30 days, the Commission will again review the Order and the comments received, and will decide whether it should withdraw the Order or make it final.

This matter involves the respondent’s advertising of cannabidiol (CBD), a cannabinoid compound found in hemp and cannabis. The complaint alleges that respondent violated Sections 5(a) and 12 of the FTC Act by disseminating false and unsubstantiated advertisements claiming that: (1) CBD products can effectively prevent, cure, treat, or mitigate multiple diseases and other health conditions; and (2) studies or scientific research prove that CBD products effectively prevent, cure, treat, or mitigate multiple diseases and other health conditions. The Order includes injunctive relief that prohibits these alleged violations and fences in similar and related conduct. The product coverage would apply to any dietary supplement, drug, or food the respondent sells, markets, promotes, or advertises. Provision I requires randomized, double-blind, placebo-controlled clinical testing for the challenged claims or any disease treatment, mitigation, or cure claim for a Covered Product. The Order defines “Covered Product” as any dietary supplement, food, or drug including but not limited to CBD products or cannabigerol (CBG) products. Provision II prohibits other misleading or unsubstantiated representations about the health benefits, performance, efficacy, safety, or side effects of any Covered Product or essentially equivalent product. It also covers prevention claims not specifically included in Provision I.

Provision III requires the preservation of certain records for any testing Respondents rely upon as competent and reliable scientific evidence. Provision IV addresses Respondents’ false establishment claims and generally prohibits misrepresentations regarding the scientifically or clinically proven benefits of any product. Provision V provides a safe harbor for FDA-approved claims. Provisions VI and VII contain monetary payment provisions. REEF INDUSTRIES, INC. 473 Analysis to Aid Public Comment Provisions VIII, IX, and X requires the Respondents to provide customer information to the Commission and to provide notice of the order to customers, affiliates and other resellers. Provision XI requires an acknowledgement of receipt of the order. It also requires the individual Respondents to deliver a copy of the order to certain individuals in any business for which they are the majority owner or which they control directly or indirectly. Provisions XII, XIII, and XIV provide the required reporting, recordkeeping, and compliance monitoring programs that must be put in place. Provision XV explains when the Order is final and effective. The purpose of this analysis is to facilitate public comment on the order, and it is not intended to constitute an official interpretation of the complaint or order, or to modify the order’s terms in any way.

VOLUME 171 Complaint