2023 - Tobacco Reporter

22nd Announces Reverse Stock Split

22nd Century Group will conduct a reverse stock split of its outstanding shares of common stock, par value $0.00001 per share, at a ratio of 1-for-15 effective as of 12:00 a.m. Eastern Time on July 5, 2023. The reverse stock split is intended for the company to regain compliance with the minimum bid price requirement of $1 per share of common stock for continued listing on Nasdaq.

“As a transformative plant science company, being listed on the Nasdaq Stock Market places 22nd Century among the top innovation-driven companies of the world. The board decided to take action now to resolve our compliance with the Nasdaq listing standards, providing investors with greater assurance around this important asset even as we continue to advance our mission focused on plant biotechnology and health improvement,” said Nora Sullivan, chair of the board, in a statement.

“As [we] move into the second half of 2023, we are advancing the rollout of our VLN products in the three largest state markets as we further expand our commercial footprint,” said James A. Mish, CEO. “We also expect to benefit from our new extraction capabilities and the return of distillate production in our hemp cannabis business, plus expansion in our new multi-year vertically integrated license and distribution agreements with two major consumer brands. Combined, we are tracking to our full-year outlook of a record $105 [million] to $110 million in sales.”

22nd Century common stock will begin trading on a reverse stock split-adjusted basis at the opening of the Nasdaq Capital Market on Wednesday, July 5, 2023. Following the reverse stock split, the common stock will continue to trade on Nasdaq under the symbol “XXII” with the new CUSIP number, 90137F202.

In connection with the reverse split, the company will reduce its authorized number of shares of common stock at that same ratio as the reverse split, resulting in 33,333,334 authorized shares of common stock (from 500,000,000 authorized shares). No fractional shares will be issued in connection with the reverse stock split and all such fractional interests will be rounded up to the nearest whole number of shares of common stock. In addition, the reverse stock split will apply to the common stock issuable upon the exercise of the company’s other outstanding securities, with proportionate adjustments to be made to the exercise prices and number of derivates securities, and under the company’s equity incentive plans.

The reverse stock split will consolidate the number of issued and outstanding shares of the company’s common stock to approximately 15.9 million.

July 5, 2023

JT Launches New Infused Tobacco Device

Japan Tobacco is launching a new brand named “With” and a new device named “With 2” for infused tobacco capsules in Japan this summer, the company announced on its website.

The company will discontinue its Ploom TECH, Ploom TECH + and Ploom TECH + With infused tobacco capsule devices, which are only in Japan. They will be available until stocks are sold out.

Ploom X, which is a device for heated tobacco sticks, is unaffected by this announcement and will continue to be sold and rolled out in a number of markets including Japan.

JT says it remains committed to investing in reduced-risk products. The company competes in the heated-tobacco segment with its Ploom brand and participates in the e-cigarette market with its Logic brand.

July 5, 2023

Brazilian Lawmakers Debate COP10

Brazil’s House of Representatives held a public hearing June 15 to clarify the country’s position in the upcoming conference of the parties to the World Health Organization’s Framework Convention on Tobacco Control, which is scheduled to take place in Panama in November (COP10).

The debate had been requested by federal deputy Alceu Moreira, who lamented the degree of “injustice, disinformation and ideologically oriented political correctness” he claimed to have witnessed in the runup to the conference.

“We produce a licit crop; we are not committing a crime,” said Moreira. “We are proud of engaging in constructive debates with the aim to protect a licit crop and we refuse to be reprimanded for growing tobacco.”

As one of the world’s largest exporters of leaf tobacco, Brazil could be heavily impacted by the decisions made at COP10. In the most recent season, the southern region of Brazil alone produced 560 million kg of tobacco, generating BRL9.5 billion ($1.98 billion) for 128,000 farm families.

The public hearing was attended by representatives of the ministry of foreign affairs, the ministry of agriculture and livestock, and the ministry of agrarian development and family farming. The ministry of health declined to take part, saying that the debate was premature, given that the WHO had yet to publish an agenda for COP10.

The tobacco industry was represented by the tobacco growers association Afubra and the interstate tobacco industry union SindiTabaco, among other organizations.

SindiTabaco President Iro Schünke lamented the lack of transparency in the FCTC meetings. “The Framework Convention on Tobacco Control is the worst dictatorship I know, where the real interested parties are not allowed to take part in the debates,” he said.

The tobacco industry, said Schünke, produces a licit crop that generates income and jobs for millions of Brazilians and is committed to sustainable production. “My intervention is to discover what stance the Brazilian delegation will adopt at the upcoming COP 10 meeting and warn about the consequences from a poorly conducted positioning at the COP,” he said in a statement.

July 4, 2023

FTC Drops Complaint After Altria’s Juul Exit

The U.S. Federal Trade Commission (FTC) on July 3 dismissed a complaint against Altria Group and Juul Labs relating to the cigarette maker’s 2018 investment in Juul, reports Reuters.

In late 2018, Altria paid $12.8 billion for a 35 percent state in Juul. The FTC said in 2020 that Altria’s investment violated antitrust law because the company acquired the position rather than continuing to compete against Juul in the market for closed-system e-cigarettes.

After Altria exchanged its entire investment in Juul for a global license to Juul heated tobacco intellectual property, the tobacco giant asked the FTC to drop its challenge.

Altria terminated its Juul stake after the investment lost much of its value in the wake of regulatory scrutiny and litigation relating to Juul’s marketing practices. 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 2022, 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, 2022, Altria announced it was ending its noncompete agreement with Juul.

July 4, 2023

NGOs Challenge Nicotine Delisting

Three groups have sued the government of Malaysia for removing liquid nicotine from the list of controlled substances, reports Bloomberg, citing local media reports.

Malaysia is preparing legislation that seeks to ban the sale of all tobacco products, including e-cigarettes, to those born after 2007. The NGOs contended that removing nicotine from the list of controlled substances before the tobacco-control rules are in place would allow vape products to be sold openly and legally to anyone, including children.

Malaysia’s health ministry removed the restrictions on nicotine liquids and gels on March 31, which allowed the government to tax vape products containing them starting April 1.

The NGOs argue that the move is unconstitutional, arguing that it went against the recommendation of the Poisons Board.

The plaintiffs in the suit are the Malaysian Council for Tobacco Control, Malaysian Green Lung Association and Voice of the Children.

July 4, 2023

Tobacco Used for Cancer Antibodies

Baiya Phytopharm claims to have produced antibodies against cancer from tobacco and undertaken successful trials using lab animals.

Instead of targeting cancer cells the way chemotherapy does, plant-based immunotherapy focuses on boosting immune cells to block the growth of cancerous cells.

While immunotherapy has gained popularity in recent years, the antibodies for such treatment remain expensive. In Thailand, immunotherapy medicine production still relies heavily on imported technologies and equipment.

According to co-founder and Chief Technical Officer Waranyoo Phoolcharoen, Baiya Phytopharm aims to reduce the cost of producing cancer-treating drugs in Thailand and make such treatments more accessible and affordable.

“Our team is developing technology to produce a plant-based protein, an alternative and cost-effective ingredient for anti-bodies to treat cancer,” Waranyoo told the Bangkok Post.

During the Covid-19 pandemic, the Thai pharmaceutical company made headlines with its efforts to develop a tobacco-plant based vaccine against the coronavirus. (See “Joining the Race,” Tobacco Reporter, November 2020).

Tobacco plants lend themselves well to developing pharmaceutical compounds (also see “The Virtuous Weed,” Tobacco Reporter, April 2022). In many ways, they are better suited to the task than the man-made bioreactors used in traditional vaccine development, according to experts.

July 4, 2023

Vaporesso Launches Products in Dubai

Vaporesso, the open system arm of the world’s largest atomization company, Smoore International, unveiled two groundbreaking products, the Vaporesso COSS and Vaporesso ECO, at the World Vape Show held at the Dubai World Trade Centre from June 21 to 23.

“We are thrilled to introduce Vaporesso COSS and Vaporesso ECO to more vapers at the show. These two revolutionary products are set to enhance the vaping experience, with their user-friendly features and eco-friendly design,” said Jimmy Hu, vice president of Vaporesso.

The COSS is being labeled as a “game-changer in the vaping industry,” according to a press release. The system addresses the pain points of existing products and offers an intuitive design that caters to the vaping habits of users.

“The product’s slogan, Convenient Operating, Smart Supplying, embodies its features. The Vaporesso COSS boasts the smallest size of vaping device and the longest battery life,” according to the release. “It also comes with an automatic liquid filling and charging feature. With Coil-oil Separation System, the Vaporesso COSS ensures a fresh taste without any leakage, and its consistent taste is a unique feature that sets it apart from other products.”

The ECO emphasizes the value of being eco-friendly, economical, and eco-self, according to the release. It is refillable and rechargeable. Along with its larger capacity, longer battery life, reduced heavy metal content, and leather paper packaging that can be reused and recycled, the ECO is more cost-saving, eco-friendly, and safer for both the environment and humans when compared to disposable products. The product’s daily usage costs are reduced by 60 percent, which makes it accessible to a wider audience.

“In addition to COSS and ECO, the company also has an IP counter featuring its highly popular XROS Series and LUXE X Series, along with a special display counter for its TARGET Series and GEN Series,” the release states.

July 3, 2023

Juul Accuses NJOY of Patent Infringement

Juul Labs has asked the U.S. International Trade Commission (ITC) to block sales and imports of the NJOY Ace vapor device, claiming that the product infringes several Juul patents. It has also filed a complaint against NJOY with the U.S. District Court for the District of Arizona.

“Our technology, designed internally and in the U.S. and protected by our robust patent portfolio, has been the most effective product development to transition adult smokers from combustible cigarettes—switching over 2 million adult smokers in this country. Innovation is critical in this space to advance tobacco harm reduction,” said Juul Labs Chief Legal Officer Tyler Mace in a statement.

“When others infringe on our technology, we have no choice but to protect our intellectual-property rights.”

This ITC complaint follows three prior successful actions from Juul Labs at the Commission, which all resulted in barring the importation and sale of infringing products, according to Juul Labs.

“Just like we have in three prior successful ITC actions that vindicated our company’s IP rights, we intend to reach the same result here,” said Mace.

Juul Labs complain also targets Altria Group, which agreed to acquire the NJOY in March after exchanging its minority investment in Juul for a heated tobacco product intellectual property license.

The NJOY Ace device received marketing authorization from the Food and Drug Administration in April 2022.

July 3, 2023

Firms Start Posting Warning Statements

Altria Group, R.J. Reynolds Tobacco Co. and ITG Brands have started posting warning signs about cigarette smoking in more than 200,000 stores across the United States, reports CNN. The move represents one of the final steps in a lawsuit the Justice Department filed against the tobacco industry in 1999.

The signs include court-specified statements such as “Smoking kills, on average, 1,200 Americans. Every day.” They must be posted until June 30, 2025, in “highly visible places” in English and also Spanish in regions with significant numbers of Spanish speakers.

The postings come after years of dispute following U.S. District Court Judge Gladys Kessler’s judgment in 2006, when the tobacco companies were first ordered to make the corrective statements. The landmark judgment found the industry defendants guilty of lying about the dangers of cigarettes and secondhand smoke.

The defendants lied “about the devastating health effects of smoking and environmental tobacco smoke, they suppressed research, they destroyed documents, they manipulated the use of nicotine so as to increase and perpetuate addiction, they distorted the truth about low tar and light cigarettes so as to discourage smokers from quitting, and they abused the legal system in order to achieve their goal—to make money with little, if any, regard for individual illness and suffering, soaring health costs, or the integrity of the legal system,” Kessler said in her final opinion.

R.J. Reynolds said these corrective statement signs appear on its website and had previously appeared in newspapers, television, radio and on pack inserts. “The tobacco industry has evolved considerably since this lawsuit was filed nearly 25 years ago, back in 1999,” a company spokesperson said. “Today, Reynolds American Inc. and its operating companies have a clear purpose to build ‘A Better Tomorrow’ by reducing the health impact of our business.”

July 3, 2023

ITGA Calls Attention to Growers’ Viability

During a recent tour of Africa’s leading tobacco growing country’s José Javier Aranda, the president of the International Tobacco Growers Association (ITGA), stressed the importance of sustainability and grower viability.

“Sustainability starts by securing viability to growers; without it, the very pillar of the sector is at risk,” he said.

A fifth-generation tobacco grower in Salta, Argentina, Aranda shared examples to improve social and environmental conditions in tobacco growing that had been successfully implemented in his home country. He cited the contributions of Argentina’s Special Tobacco Fund, which has allowed local growers to remain viable and reinvest in social, economic and environmental initiatives.

As part of his tour, Aranda attended TAMA Farmers’ Trust annual general meeting in Lilongwe, Malawi, which was opened by Malawi’s minister of agriculture, Dalitso Kawale. During the gathering, Aranda stressed the need for governments and grower bodies to work against the demonization of the sector.

Another key point of discussion was the conference of the parties to the World Health Organization’s Framework Convention on Tobacco Control, which will take place in Panama in November (COP10). The ITGA has been campaigning to counter the claims raised by WHO about tobacco farming and about the economic viability of alternatives crops.

“WHO FCTC operates against its own rules of procedure and under Article 5.3 is deliberately excluding the tobacco farmers’ voice and other tobacco sector key players from the discussion,” said Aranda. “This is the main reason why Article 17 (economically viable alternatives to tobacco growing) has not seen any evolution.

“Article 17 has not provided any results in the search of viable alternative crops in the great majority of tobacco growing countries. Growers are already planting complementary crops whenever the conditions are provided. We urge the WHO FCTC to apply a pragmatic approach towards this issue. ITGA and its member associations are ready to cooperate.”

In Harare, Zimbabwe, the ITGA attended the Zimbabwe Tobacco Association’s annual general meeting and conducted its 2023 Africa regional meeting, officially opened by Minister of Agriculture Anxious J. Masuka. Representatives of four leading tobacco-growing countries attended these meetings: Malawi, Tanzania, Zambia and Zimbabwe, while the public session was joined by key partners and stakeholders in the sector.

During the ITGA Africa regional meeting closed session, growers’ representatives presented reports highlighting the key dynamics in their respective markets. Tobacco growers in Malawi have strengthened their efforts in producing a compliant crop, for example, while in Zimbabwe, the current sustainability focus is on curing fuels, agricultural labor practices and traceability.

Earlier in June, ITGA CEO Mercedes Vázquez participated in several events in Tanzania, hosted by Tobacco Cooperative Joint Enterprise. Among other parties, she met Tanzania’s minister of agriculture, Hussein M. Bashe and the Tanzania Tobacco Board.

July 3, 2023

Year: 2023