“Made in USA” Claims for Hemp and CBD Under Fire: 2025 FTC Enforcement Lessons for Labels and Marketplaces

The 2025 Landscape: FTC Sharply Polices “Made in USA” Hemp and CBD Labels

Made in USA hemp CBD labeling is now a magnet for regulatory scrutiny. This July, the Federal Trade Commission (FTC) took high-profile public steps to enforce its "Made in USA" (MUSA) Labeling Rule—issuing targeted warning letters to several companies and, notably, putting major online marketplaces like Amazon and Walmart on notice to police third-party sellers. For hemp and CBD brands, these developments signal an era where origin claims on product labels, online listings, and marketing materials must be airtight, thoroughly documented, and defensible—even as globalized supply chains make strict domestic content claims challenging.

Why the Focus? Regulatory and Marketplace Pressures Collide

Consumers—especially those seeking health and wellness products—heavily value American origin claims. As consumer demand grows, so do class action lawsuits and government actions challenging claims of domestic origin. The FTC's heightened enforcement in 2025 shows regulators and online platforms are no longer treating questionable or misleading claims as minor infractions; they're making examples of brands whose statements cannot withstand scrutiny.

Understanding the FTC’s “Made in USA” Rule: The “All or Virtually All” Standard

The FTC’s MUSA rule (see FTC guidance) states that products labeled as “Made in USA,” or marketed with equivalent unqualified claims (e.g., “Our hemp oil: 100% U.S.-grown and produced”), must be "all or virtually all" made in the United States. This rule covers packaging and labeling, as well as advertising, websites, social media, and marketplace listings.

Key takeaways for qualifying under the FTC’s rule:

• Significant Processing: All or nearly all significant processing must take place in the U.S.
• Origin of Components: The final product should contain only a negligible amount of foreign content. Imported cannabinoids, gelatin, bottles, droppers, or even packaging can jeopardize the claim.
• No Ambiguity: Unqualified claims (“Made in USA”) are held to the strictest standard; qualified claims are permitted with clear, accurate caveats (e.g., “Assembled in USA with imported components”).

Recent FTC Actions and Their Ripple Effect

In July 2025, the FTC sent warning letters to prominent consumer goods companies (including personal care brands) and directly notified Amazon and Walmart (see Reuters). Both platforms were told to “monitor, identify, and take corrective action against third-party sellers who make false or misleading ‘Made in USA’ claims.” Now, major marketplaces are more likely to:

• Remove listings flagged for dubious origin claims—sometimes with little warning.
• Require substantiation at onboarding or in response to a complaint.
• Impose their own penalties or suspensions—separate from FTC action.

Marketplace policing is expected to intensify, as platforms risk their own liability for third-party misstatements per the FTC’s letters (KH Law).

Penalties for Noncompliance: What’s at Stake in 2025?

The maximum FTC civil penalty as of early 2025 is $53,088 per violation (see FTC adjustment). These penalties can quickly multiply across products, batches, or campaigns. In addition to civil fines, brands face forced corrective advertising, potential class action lawsuits, and suspension or de-listing from online marketplaces.

Where Claims Go Wrong: The Hemp and CBD Supply Chain Challenge

The reality for the hemp and CBD sector is that U.S.-based processing often relies on internationally sourced cannabinoids, excipients, packaging, or even finished goods. Companies may:

• Source bulk CBD isolate or distillate from abroad
• Import capsules, gelatin, droppers, or bottles
• Purchase fully packaged products for relabeling

Any “Made in USA” claim is only as strong as your weakest imported link.

Types of Claims and Substantiation Strategies

1. Unqualified “Made in USA”

Risks: Strictest scrutiny. The product must be virtually free of imported content, and all processing must occur domestically.

Substantiation Needed:

• Detailed bills of material (BOM)
• Supplier affidavits for every component
• Manufacturing process flowcharts showing U.S. origination

2. Qualified Claims (Recommended for Most Brands)

Example: “Made in USA with imported gelatin,” “Assembled in USA using foreign-sourced CBD,” or “Packaged in USA.”

Advantage: Provides necessary transparency and sets accurate consumer expectations. Lower risk for both regulatory and class action exposure if substantiated.

3. Adjacent Claims and PDP Placement

FTC enforcement does not stop at the physical label. Marketers must audit their claims holistically—including principal display panels (PDPs), adjacent marketing copy, online listings, and even third-party retailer blurbs.

Compliance Checklist for 2025: Action Steps for Hemp and CBD Businesses

1. Audit All Origin Claims: Review every label, website, social post, ad, marketplace listing, and product bundle for both explicit and implicit U.S. origin references.
2. Qualify Appropriately: Avoid pushing unqualified “Made in USA” language unless all supply, processing, and assembly steps are domestic. Use qualified language if any part is imported.
3. Substantiate: Keep all supplier affidavits, detailed bills of materials, and contracts proving U.S. origin on file. Marketplace onboarding may require immediate access to this documentation.
4. Train Teams: Ensure compliance, legal, marketing, and operations are educated on current rules and risks.
5. Monitor Marketplaces: Expect a “delist first, ask questions later” environment on Amazon, Walmart, and other large platforms. Pre-clear claims with platforms when possible.
6. Revisit Bundled Offers: Product bundles containing both U.S.- and foreign-made items cannot claim “Made in USA” unless every component qualifies.
7. Stay Current: Track guidance and enforcement on the FTC’s Made in USA resources page.

How Marketplaces Are Changing the Game

Third-party sellers represent a major risk area. In 2025, Amazon and Walmart have increased automated monitoring and manual audits—quickly taking down listings that draw MUSA-related consumer or competitor complaints, often with little or no recourse beyond re-substantiating every claim.

Tips for Marketplaces:

• Use conservative claim language in all product listings
• Proactively file substantiation with platforms where possible
• Avoid “U.S.-crafted,” “American made,” or “locally produced” language unless your compliance documentation is watertight

Real-World Scenarios

• Imported Droppers, Domestic Oil: A tincture producer bottling U.S.-extracted CBD in locally blended MCT oil may still violate the rule if the dropper or bottle is imported and the claim is unqualified.
• Product Bundles: Bundling a domestically produced CBD cream with an imported bath bomb invalidates an overall “Made in USA” claim for the package.
• Marketplace Listings vs. Packaging: If third-party resellers use your marketing copy or images, you remain responsible for the accuracy of any U.S. origin statement, even if you do not control the listing itself.

Future Outlook and Takeaways for 2025

With the FTC’s high-visibility enforcement and marketplace risk aversion on the rise, brands must balance marketing appeal with aggressive compliance:

• Err on the side of transparency: Prefer qualified claims over absolute assertions
• Documentation is protection: Assume you’ll have to supply it—often on short notice
• Marketplace due diligence: Be proactive; don’t wait for a takedown or legal action

The competitive advantage in 2025: Brands that can substantiate their claims—backed by robust supply chain documentation—will stay on shelves, protect reputations, and build trust with both consumers and regulators.

Looking for more compliance insights or audit checklists? Visit CannabisRegulations.ai for the latest federal and state hemp and CBD labeling guidelines, auditing tools, and regulatory news tailored to your business. Stay ahead—and stay compliant.