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Year: 2023

  • Altria to Acquire NJOY Holdings

    Altria to Acquire NJOY Holdings

    Photo: tatsianamaphoto

    Altria Group has entered into an agreement to acquire NJOY Holdings for approximately $2.75 billion in cash. The transaction terms include additional $500 million in cash payments that are contingent upon regulatory outcomes with respect to certain NJOY products.

    “We believe we can responsibly accelerate U.S. adult smoker and competitive adult vaper adoption of NJOY Ace in ways that NJOY could not as a standalone company,” said Altria CEO Billy Gifford in a statement. “We believe the strengths of our commercial resources can benefit adult tobacco consumers and expand competition. We are also excited to welcome NJOY’s talented employees to Altria at closing.”

    “As a result of this transaction, Altria’s enhanced smoke-free portfolio will include full global ownership of products and technologies across the three largest smoke-free categories and a joint venture with JT Group for the U.S. commercialization of heated tobacco stick products.”

    “We are excited to add NJOY’s e-vapor intellectual property as a new platform that we believe we can build on to help more adult smokers transition to smoke-free alternatives,” said Olivier Houpert, Altria’s new chief innovation and product officer.

    Altria will hold a conference call at 9 a.m. Eastern Time on March 6, 2023. Access to the live webcast is available at. A replay of the webcast and a transcript will be available on the same website following the event.

    In 2022, the U.S. vapor category comprised nearly 14 million U.S. adult tobacco consumers, including 9.5 million exclusive adult vapers, according to Altria. The segment  generated approximately $7 billion in U.S. retail sales and represented approximately 15 percent of total estimated equivalized U.S. tobacco volumes and more than 50 percent of total estimated equivalized smoke-free tobacco volumes.

    To date, the U.S. Food and Drug Administration has approved the marketing of 23 vapor products and devices. In 2022, NJOY received marketing granted orders for the NJOY Ace device, along with several tobacco-flavored pods. The regulatory agency is still reviewing NJOY’s premarket tobacco product applications for several NJOY menthol-flavored e-vapor products.

    Altria said it had multiple sources of funding for the deal, including cash from a $2.7 billion agreement with Philip Morris International last year for the IQOS Tobacco Heating System.

    The NJOY deal follows an announcement by Altria that it would exchange its entire minority investment in embattled Juul Labs for a nonexclusive global license for certain of Juul’s heated tobacco intellectual property.

  • 22nd Century Group Secures Financing

    22nd Century Group Secures Financing

    Photo: vetkit

    22nd Century Group announced a new $21 million senior secured debenture financing to support increased working capital needs related to the significant growth outlook in both its VLN and GVB business lines. The new three-year financing was issued at a 5 percent original issuance discount, will bear cash interest at a rate of 7 percent per year and commence principal amortization in the second year at a rate of 2 percent of the original balance per month. The company has the option to redeem the facility early starting in the second year.

    “We anticipate significant revenue growth in both of our core business lines and believe this financing will provide the appropriate working capital for the year ahead,” said Hugh Kinsman, chief financial officer, in a statement. “New retail partners already in talks to launch VLN in additional states as part of our national-scale distribution capabilities are expected to increase our manufacturing and inventory requirements. Additionally, the continued growth in customer demand at GVB has increased our capital needs for bulk ingredients and inventory going forward.”

    In conjunction with the new credit facility, 22nd Century has also extended the maturity of $2.7 million in legacy seller notes assumed with its acquisition of GVB Biopharma to mid-2024. The company will file a Form 8-K with the Securities and Exchange Commission with complete details of the new debt facility and the terms of the refinanced legacy seller notes.

  • Webinar on FDA Warning Letters

    Webinar on FDA Warning Letters

    Photo: Song_about_summer

    The U.S. Food and Drug Administration has posted a new webinar to help manufacturers and vape shop owners respond to warning letters from the agency’s Center for Tobacco Products (CTP).

    The webinar outlines the appropriate items for a response to a warning letter, which should be received by FDA within 15 business days. The webinar also includes an explanation of proper documentation concerning corrective actions that entities have taken.

    In the webinar, participants will learn about:

    • Preparation for a response to CTP
    • Important items to include in a response
    • Additional compliance resources
  • Habano Festival Concludes With Gala

    Habano Festival Concludes With Gala

    Photo: Timothy Donahue

    The 23rd Habano Festival culminated March 3 with the gala dinner held at the Pabexpo Fairgrounds in Havana. Around 1,200 attendees enjoyed the night complemented by national and international music, dance and indoor fireworks. The gala was also honored by the presence of Cuban President Miguel Diaz Canel, who attended the event along with other government authorities.

    The evening paid tribute to the Partagas brand with the launch of the Linea Maestra, the brand’s most premium line, made up of three new vitolas: Origen (46 ring gauge x 154 mm length), Rito (52 ring gauge x 168 mm length) and Maestro (56 ring gauge x 132 mm length). Each of these vitolas will reach the market in a special case containing 20 units.

    For the first time in the history of the brand and the Habanos portfolio, the vitolas of this new Partagas line will be made with 100 percent tobacco grown in San Luis, in the Vuelta Abajo plantations located in the Pinar del Rio region.

    The gala night also featured a Hall of Fame that illustrated the great work of the people who have made the Habano what it is today.

    One of the highlights of the evening was the auction of the exclusive humidors dedicated to the six global Habanos brands: Cohiba, Montecristo, Romeo y Julieta, Partagas, Hoyo de Monterrey and H. Upmann. The proceeds reached a total of €11,220,000 ($11,965,309) and will be donated to the Cuban public healthcare system.

  • Altria Exchanges Juul Stake for HTP License

    Altria Exchanges Juul Stake for HTP License

    Photo: Juul Labs

    Altria Group has exchanged its entire investment in Juul Labs for a non-exclusive, irrevocable global license to certain of Juul’s heated tobacco intellectual property.

    “We believe exchanging our Juul ownership for intellectual property rights is the appropriate path forward for our business,” said Altria CEO Billy Gifford in a statement. “Juul faces significant regulatory and legal challenges and uncertainties, many of which could exist for many years. We are continuing to explore all options for how we can best compete in the e-vapor category.”

    As of Dec. 31, 2022, the carrying value and estimated fair value of Altria’s Juul investment was $250 million. Altria will record the financial impact of the agreement in the first quarter of 2023 and intends to treat any such amounts as a special item and exclude it from its adjusted diluted earnings per share.

    “The return of Altria’s equity stake and termination of underlying agreements affords us full strategic freedom—we are no longer limited by the terms of those agreements to pursue other strategic opportunities and partnerships,” wrote Juul in a statement. “We are free to take advantage of a range of options to maximize the value of our company while we continue to advance our leading product technology and innovation pipeline.”

    In late 2018, Altria paid nearly $13 billion for a 35 percent stake in Juul. “We have long said that providing adult smokers with superior, satisfying products with the potential to reduce harm is the best way to achieve tobacco harm reduction,” said Altria’s then-CEO Howard Willard at the time. “Through Juul, we are making the biggest investment in our history toward that goal. We strongly believe that working with Juul to accelerate its mission will have long-term benefits for adult smokers and our shareholders.”

    Over the years that followed, however, regulatory scrutiny and litigation relating to Juul’s marketing practices severely eroded Juul’s valuation. On June 23, 2022, the U.S. Food and Drug Administration ordered Juul Labs to pull its e-cigarettes from U.S. store shelves, saying the e-cigarette manufacturer had submitted insufficient evidence that they were “appropriate for the protection of the public health.” After Juul challenged the marketing denial order (MDO), the FDA agreed to take another look at the company’s pre-market tobacco product application.

    The agency said it had determined that there are scientific issues unique to the Juul application that warrant additional review. 

    In early September, Juul Labs agreed to pay nearly $440 million to settle a two-year investigation by 33 U.S. states into the marketing of its vaping products, which critics have blamed for sparking a surge in underage vaping.

    On Sept. 30, Altria announced it was ending its noncompete agreement with Juul. The tobacco giant is reportedly in talks to buy Njoy Holdings for at least $2.75 billion. Njoy has a roughly 2 percent of the U.S. vape market by volume, according to Jefferies. Juul, by contrast, accounts for around a quarter of American vapor product sales. Unlike Juul, however, Njoy has FDA permission to sell its products in the U.S.

    “While our appeal of FDA’s now-stayed MDO remains pending, we remain as confident in our science and evidence to support the continued marketing of Juul products,” Juul wrote after Altria announced the exchange of its investment for a license. “We also continue to pursue future applications for new products to accelerate our mission and progress for the adult smoker, public health, and an end to combustible cigarettes.”

  • Voopoo Releases DRAG 4 Mod

    Voopoo Releases DRAG 4 Mod

    Image: Voopoo

    Voopoo has released its fourth-generation DRAG mod, the company announced in a press release.

    First created in 2017, the Drag series has distinguished itself with its rapid ignition. In 2019, Voopoo introduced DRAG 2, which featured improved output power and a better vaping experience. Voopoo DRAG 3 was released in 2021, and gave users a unique vaping experience with its Super Burst mode and fast ignition at 0.001 seconds, according to the manufacturer.

    Building on the classic DRAG mod look, the Drag 4 is designed with zinc alloy, leather, solid wood elements and natural resins.

    The device’s Uforce-L Tank adopts the industry’s original 360 degrees stepless air adjustment ring. With free adjustment and easy control of airflow, it effortlessly generates the sought-after cloudy vapor. The Dual In One Coil accelerates atomization heating and increases atomization efficiency, thus enhancing vapor explosion and delivering rich and delicate flavors.

    With the newly added multifunction switch, the QS lock can be set to lock the wattage, the device or the power. An improved user interface with clearly separated function keys reduce the chance of unintended ignition. The chip automatically identifies the most commonly used heating material and adjusts its temperature to a recommended range.

    Eco mode increases the battery service life by at least 10 percent.

  • Yocan Tech Launches GTG Vaporizer

    Yocan Tech Launches GTG Vaporizer

    Image: Yocan Tech

    Yocan Tech has launched Yocan Pillar, a vaporizer featuring TGT heating technology, according to a company press release.

    The product’s TGT coil comprises ceramic donut and quartz XTAL rod. Instead of leading the liquid straight to a coil, the device directs it to the ceramic donut and melts it onto the XTAL rod.

    In combination with its use of water-filtered concentrate, the coil allows for strong yet smooth hits, according to the manufacturer.

    Yocan Pillar’s main body is made of zinc alloy with a glass mouthpiece and magnetic connection.

    The device allows users to choose between three voltage levels, specified by an indicator light. Higher voltage levels offer more efficient extraction, while lower voltage levels will provide intense flavor. A 30-second heat-up time allows users to extract all active ingredients in one hit.

    Yocan Pillar are available with in Pearl Black, Pearl White, Pearl Orange, Pearl Teal and Pearl Green.

  • Growers Discuss Tobacco’s Prospects

    Growers Discuss Tobacco’s Prospects

    Photo: ITGA

    Tobacco growers’ representatives from Argentina, Brazil, Colombia, the Dominican Republic and the United States gathered in Salta, Argentina, to discuss the challenges and opportunities facing their sector during the International Tobacco Growers’ Association (ITGA) 2023 Americas Meeting.

    In addition to dealing with the Covid-19 pandemic, tobacco growers have struggled with skyrocketing production cost, stagnating leaf prices and increasing regulatory pressures. To cope with the challenges, ITGA member associations have been urging their respective governments to support the sector. The ITGA urges international institutions to respect tobacco growers and include them in the debates where their future is being decided.

    Key discussion points during the regional meeting included the World Health Organization’s Framework Convention on Tobacco Control (FCTC) and the Conference of the FCTC Parties (COP), which is scheduled to take place in Panama this year. ITGA representatives deplored the COP’s lack of transparency and resistance to include industry representatives in its deliberations. Since COP4 in 2010, meetings have not been held in public.

    ITGA President Jose J. Aranda highlighted the steps Argentinian growers have taken to ensure the livelihoods of local farmers. Aranda underlined the multitude of threats facing tobacco, including cost of production and climate issues, and the stigmatization of the sector, which he stressed operates in a legal market and complies with all the regulations imposed on it.

    ITGA CEO Mercedes Vazquez recognized the pioneering spirit of Argentinian tobacco growers and their substantial contribution to local economies. She commended Argentina’s Special Tobacco Fund, a unique provision that has enabled tobacco growers to make a dignified profit margin from their work.

    Michiel Reerink, director of corporate affairs at Alliance One International, examined the global regulatory environment while Benjamin Dessart, vice president of external affairs at Universal Leaf, reviewed the latest legislative initiatives in the Americas region.

    ITGA Manager of Tobacco Industry Analysis Ivan Genov evaluated the threats and opportunities for tobacco growers. These include the rising costs of production, political and economic uncertainty, along with a disequilibrium of supply and demand for tobacco leaf.

    ITGA member associations shared the latest crop estimates and discussed the issues in their respective markets. Special attention was paid to the situation in the host country, Argentina, where out-of-control inflation is causing serious obstacles for growers. Argentinian associations also highlighted several sustainability initiatives to tackle social and environmental issues.

    The participants in the meeting agreed that they will have to work closely together to tackle the increasing challenges facing the sector.

  • Taat to Acquire Smoking Cessation App

    Taat to Acquire Smoking Cessation App

    Photo: Gilles Paire

    Taat Global Alternatives plans to acquire Break Free, a smartphone application designed to provide smoking cessation strategy recommendations, from Boksburg Ventures, according to a Taat press release. Taat anticipates that Break Free could play a strategic role in the marketplace positioning of its flagship product Taat, a nicotine-free and tobacco-free alternative to tobacco cigarettes.

    Break Free uses a holistic approach to first monitor and track smoking-related habits of adult tobacco users, analyze the habits and then suggest customized changes that are specific to each adult smoker to ensure personalized care and attention.

    The Break Free mobile app uses state-of-the-art technologies, including a companion diagnostics module to help adult smokers personalize and customize the use of currently available U.S. Food and Drug Administration-approved smoking cessation devices, augmented and virtual reality mental health simulations, and circadian rhythm sensors to monitor actigraphy, sleep/wake cycles and snoring.

    The app has not yet been made available to consumers and remains subject to further development. Upon completion of the proposed transaction, Taat plans to complete the development of the app for use by consumers on the Android and iOS smartphone platforms by integrating additional features that are currently under patent applications with the U.S. Patent and Trademark Office.

    Subject to approval by at least two-thirds of the votes cast at Boksburg’s shareholders meeting scheduled on April 10, 2023, Taat has agreed to issue to Boksburg on closing an aggregate of 17 million common shares of Taat at a deemed value of $0.3225 per consideration share and $3.6 million of working capital.

  • Researchers Propose New Definition of COPD

    Researchers Propose New Definition of COPD

    Photo: Chinnapong

    While smoking plays a key pathogenic role in chronic obstructive pulmonary disease (COPD), other factors play a role as well, according to the authors of the 2023 Global Initiative for Chronic Obstructive Lung Disease (GOLD) report.

    To better reflect the varied contributors to COPD, the report proposes a new definition of COPD.

    The GOLD 2023 report defines COPD as “a heterogeneous lung condition characterized by chronic respiratory symptoms (dyspnea, cough, expectoration, exacerbations) due to abnormalities of the airways (bronchitis, bronchiolitis) and/or alveoli (emphysema) that cause persistent, often progressive, airflow obstruction.”

    “The updated definition focuses on patient characteristics that then allows us to go into etiology and diagnostic criteria in more detail separately,” said MeiLan Han, chief of pulmonary and critical care medicine at the University of Michigan and a co-author of the GOLD 2023 report, in a statement. “This is important because we now can better emphasize all of the factors that can contribute to COPD beyond tobacco exposure.”

    In low-income and middle-income countries, which contribute to over 85 percent of all COPD cases worldwide, “nonsmoking COPD may be responsible for up to 60 [percent] to 70 percent of cases,” noted the report’s authors. Other risk factors, they said, include environmental factors, such as indoor and outdoor air pollution; lung development and aging; socioeconomic status; asthma and airway hyper-reactivity; and infections.