Cannabis company enters the sights of Avisa and the competition – 10/07/2023 – Cannabis Inc.

In this market Cannabis, startups specialized in selling medicinal products through digital platforms, so-called marketplaces, emerged with the mission of solving various customer problems in one place. For those who have never bought CBD oil and don’t know where to find it, it seems like the solution to their problems: in addition to medicines, they offer specialization courses in endocannabinoid medicine, connect doctors and patients, and take care of the bureaucracy of importing the product with the Agency of Health Surveillance (Anvisa), regulatory body for the trade of Cannabis in Brazil. Despite being practical, the service can give rise to conflicts of interest between brands and doctors working on the platforms, among others.

The market is booming, so much so that imports of Cannabis grew 93%, from July 2022 to the same period in 2023. New businesses emerged, of the most varied, selling everything from flowers to creams with CBD, accelerating indiscriminate advertising on social networks, which became a lawless land. Older players began to monitor, complaining about aggressive competition and in return the regulatory agency tightened supervision. In the eye of this hurricane of interests, Cannect, one of the largest marketplaces, was recently punished by Anvisa for carrying out irregular advertising.

The Cannabis sector does have strict regulations, as they follow the same rules as the pharmaceutical market, in general. For example, in Brazil, the advertising of medicines is not allowed – therefore, even though CBD extract (Cannabidiol, a therapeutic substance, derived from Cannabis) considered a medicinal product (and not a medicine), it is subject to the same regulation.

Anvisa’s punishment

Published in the Official Gazette on September 28, Anvisa’s sanction suspends Cannect’s marketing, distribution and advertising. This is a preventive measure based on article 6 of Law 6360/1976 and item XV of article 7 of Law 9782/1999. In an interview with the blog, Allan Paiotti, CEO of Cannect and former director of Oswaldo Cruz Hospital, explained that it was motivated by links from partner companies, located on the website, which present the products in kits. “This was understood by Anvisa as an incentive for consumption. But I don’t sell the product. I don’t have stock. I’m just a technology company.”

Paiotti says the problems have been resolved. “We have already requested an audience with Anvisa.” Asked about the suspension of Cannect’s activities, the executive says that the platform works normally. At the time of its founding, in 2021, the company had an online pharmacy selling imported products from Cannabis and promised delivery within 48 hours. The following year, Cannect joined Dr Cannabis, another older marketplace, opened in 2018, which began with a focus on producing information about the market and products. The merger strengthened the business, which grew accompanied by strong marketing work.

Moral damages

And it was precisely this digital marketing work, which also led Cannect to respond to a process requesting compensation for moral damages, in the amount of R$50 thousand. The author of the action is Support for Research and Patients of Cannabis Medicinal (Apepi), a non-profit association formed by patients and their families. Founded and directed by lawyer Margarete Brito, the organization has a favorable court decision that allows the cultivation of Cannabis, in Rio de Janeiro, for the production of medicinal oils from the plant, which serves 3 thousand members. It is one of the largest patient associations, with its image closely associated with the founder, who is also one of the best-known activists in the sector.

According to Margarete, “accesses to Apepi’s YouTube page were redirected to the Cannect website”. Paiotti confirms that there was a problem, but that it was not in bad faith. “We had nothing to do with it. There is a Google tool that creates stripes, like ads that automatically appear on pages that have words in common with the advertisement.” Before filing a lawsuit, Margarete tried to speak to one of the company’s partners, who said he had no idea what had happened. “I received many messages from members, complaining that they entered the Apepi page and went to the Cannect page. Redirecting the Apepi link is unfair competition.” In this push and pull of responsibilities, the consumer is most harmed, as they already have a lot of difficulty understanding the bureaucratic procedures involved in purchasing and releasing imports, let alone identifying who is who in this game.

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