The Federal Trade Commission’s (FTC) amended Negative Option Rule—known in practice as the “Click-to-Cancel” rule—will formally alter the landscape for subscription commerce nationwide. For CBD brands leveraging recurring shipment, autoship ‘club’ models, or any automated subscription, sweeping compliance changes take effect with enforcement beginning July 14, 2025, following a recent federal postponement (sources: Latham & Watkins, Wiley). Understanding these new rules is essential to ensure ongoing cannabis compliance, avoid costly enforcement, and preserve consumer trust in the fiercely competitive CBD sector.
What Is the FTC Negative Option Rule?
Originally crafted to police subscription scams and unwanted billings, the new Negative Option Rule encompasses any offer in which a customer’s silence or failure to cancel is interpreted as consent to be charged further. This includes traditional autoship services, free-to-paid trial transitions, continuity plans, and membership clubs—plainly, the backbone of the American CBD subscription boom. The amendments reflect years of enforcement actions targeting dark patterns and lack of transparency in these recurring billings.
Key Effective Dates, Coverage, and Penalties
- Enforcement Date: July 14, 2025 (recently delayed from May)
- Scope: The rule applies federally, covering both business-to-consumer (B2C) and business-to-business (B2B) negative option sales channels. CBD is included under nutraceutical/subscription commerce.
- Penalties: Civil penalties may reach $53,088 per violation, particularly when noncompliance is deemed knowing or reckless (Wiley).
2025 Rule Requirements for CBD Subscription Programs
The new FTC rule codifies four core obligations for all subscription-based business models—each of which presents new compliance and operational risks for the CBD sector.
1. Clear Upfront Disclosures
All material terms must be shown upfront, before any consumer is bound or billed. This means prominently explaining:
- Billing frequency, cost, and whether it’s recurring
- How to cancel (all available methods)
- Refund or pro-rating policies, when applicable
- Any additional conditions (minimum commitment, shipping/cancellation windows)
CBD brands must ensure offer pages, popups, checkout funnels, and customer scripts all plainly show these terms, staying well clear of ambiguity or fine-print traps.
Customers must take an active, informed action—like checking a specific box or clicking a clear consent button—before any recurring charge begins. Recordkeeping here is critical:
- Capture and retain logs/screenshots of consent events
- Retain disclosures shown at time of signup
- Consider how SMS/email confirmations are documented, ideally in a manner consistent with FCC/TCPA rules
3. “Click‑to‑Cancel” — Easy Online Cancellation
If customers can sign up for a CBD autoship online, the rule mandates they must have an “equally simple” way to cancel by the same digital channel—ideally in just a few clicks, not forcing phone calls or cumbersome hoops.
- Dedicated cancellation buttons or links in account dashboards
- No upsell/loyalty offers can block, obscure, or impede the cancellation
- “Downsell” offers are permitted only if the consumer first sees a clear, prominent decline option
- Retain logs of cancellation attempts/process completions
Avoid dark patterns or “roach motel” retention tactics.
4. Annual or Periodic Reminders
For all subscriptions lasting beyond six months, send a plain-language reminder (via email, SMS, or mail as appropriate) that clearly states:
- What the product is (CBD oil, gummies, etc.)
- Subscription cost/frequency
- How to cancel
Reminders should be separated from marketing/promotional messaging.
5. Prohibition on Misrepresentation
The rule outright bans misstatements or omissions about:
- The subscription nature of the transaction
- The recurring cost or financial commitment involved
- The ease or timing of cancellation
- Refund conditions or unique club perks
FTC enforcement actions in 2024–2025 show this to be a focus area.
How Does This Interact With State Auto-Renewal Laws?
The FTC rule sets a federal baseline, but state-level auto-renewal laws (e.g., California, New York, Colorado) may demand stricter standards—such as mandatory cancellation by email, prescribed font size for disclosures, language access, or additional notice periods.
The FTC rule does not preempt more restrictive state law. Multi-state CBD brands must carefully harmonize their policies to meet both federal and state requirements, especially in high-enforcement jurisdictions.
CBD & Hemp Subscription Compliance Checklist for 2025
Before July 14, 2025, CBD and hemp brands should:
- Review and update every step of the signup, confirmation, and cancellation journey:
- Disclosures match exact FTC/state requirements
- Offers, popups, and scripts are explicit—no fine print reliance
- Confirmation receipts (email/SMS) reflect all recurring terms
- Deploy “Click-to-Cancel” paths:
- Digital account dashboards feature a cancellation button
- Downsell offers never block or dark-pattern the primary cancellation flow
- Integrate and test annual reminder automations.
- Document and store consent artifacts:
- Timestamped records for every customer
- Screenshots or data exports showing what was displayed and agreed
- Prepare documentation for FCC/TCPA SMS rules overlap (consent for texts, if applicable)
- Coordinate refund/ACH policies:
- Ensure refund timelines and cancellation windows align with ACH/Nacha rules if bank transfer autopay is accepted
- Consider coordination with merchant processors on chargeback/dispute documentation
- Train all internal and customer service staff:
- Ensure anyone handling phone/email/chat support uses compliant scripts and never blocks a legitimate cancellation
Preserving Upsell/Downsell Options—Without Dark Patterns
While it’s tempting to retain customers with last-chance deals, the FTC now polices the boundary between persuasive “save” offers and illegal friction. Brands must:
- Ensure that cancellation is never blocked, delayed, or hidden behind confusing options
- Present any loyalty or discount offer before the final confirmation, but always permit a simple “No, just cancel” action in parallel
- Strictly avoid visual misdirection, small print, or looped offer screens
Preparing for Enforcement—Best Practices
The FTC has been highly active in pursuing noncompliant subscription models. Recent settlements (Match.com, Chegg Inc., Amazon) underscore the risks. Proactive cannabis compliance teams should:
- Routinely audit actual user flows with a compliance lens
- Simulate FTC-style “mystery shopping” to ensure policies live up to what’s promised
- Retain logs, screenshots, and call/chat transcripts for at least three years
- Monitor the FTC website and leading legal advisories for settlements and interpretive guidance
Key Takeaways for CBD Brands
- July 14, 2025 is the new enforcement deadline for the FTC’s Negative Option Rule.
- All autoship, recurring CBD club, and subscription models are directly covered.
- Strict obligations exist for clear disclosures, click-to-cancel capability, periodic reminders, and thorough documentation.
- State auto-renewal requirements often add additional complexity—review every jurisdiction where you ship or advertise.
- Financial penalties escalate rapidly for noncompliance, and enforcement is aggressive.
Stay ahead of these fast-evolving CBD compliance challenges. CannabisRegulations.ai offers expert resources, regulation tracking, and tailored checklists so your subscription business can thrive in the new regulatory era—without risking costly enforcement. For more insights and ongoing autoship compliance updates, bookmark our regulatory compliance blog.
