Author: Staff Writer

TPB Increases Stake in ReCreation Marketing

Photo: Negro Elkha
Turning Point Brands has increased its equity stake in ReCreation Marketing, a Canadian distribution company, from 50 percent to 65 percent.
ReCreation Marketing is a specialty marketing and distribution firm focused on building brands in the Canadian smoking accessories, vaping and alternative products categories. As part of this transaction, ReCreation will transition its company name to Turning Point Brands Canada Corp. over the next 90 days.
ReCreation has significantly expanded the reach of Zig-Zag papers, which now has presence in 75 percent of the volume-weighted distribution within the private dispensary channel. As a result of the ReCreation partnership, TPB expects to continue to expand its presence in Canada, creating an avenue for its broader portfolio of products to enter the Canadian market.
“Increasing our stake in ReCreation Marketing was a logical move as Turning Point Brands continues to invest in the cannabis and tobacco-related sectors,” said Larry Wexler, CEO of Turning Point Brands, in a statement.
“Our partners at ReCreation Marketing are significantly expanding the distribution of our brands while also gaining market share in Canada, most notably capitalizing on Zig-Zag’s strong market position in the country. The increased stake and renaming into Turning Point Brands Canada signify the commitment to our strategy in Canada. We look forward to continuing to work closely with this accomplished team to strengthen our prominence in the market.”
“Turning Point Brands’ robust portfolio of leading brands, coupled with ReCreation Marketing’s proven ability to support distribution in traditional and alternative channels, is a natural expansion of our work together,” said Chris Riddoch, president of ReCreation Marketing. “This transaction will provide both companies the opportunity to penetrate the market and to increase our visibility and accessibility to Canadian retailers and consumers alike.”
August 11, 2021
FDA Refuses to File JD Nova PMTAs

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The U.S. Food and Drug Administration has issued a “refuse to file” (RTF) letter to JD Nova Group. The letter notifies the company that the premarket tobacco product applications (PMTAs) it submitted for approximately 4.5 million of its products do not meet the filing requirements for a new tobacco product seeking a marketing order.
As a result of this RTF action, JD Nova Group must remove approximately 4.5 million products from the market or risk enforcement action by the FDA. The company may resubmit a complete application for these products at any time. However, the products may not be marketed unless they receive a marketing granted order.
The FDA’s action affects a significant share of PMTAs under review. The agency has received applications for more than 6.5 million products from over 500 companies.
According to the FDA, JD Nova was issued the RTF letter because the company’s applications for these products lacked an adequate environmental assessment. Under the FDA’s regulations implementing the National Environmental Policy Act, an environmental assessment must be prepared for each proposed authorization.
This RTF does not apply to all product applications submitted by JD Nova. The remaining product applications the company submitted by the Sept. 9, 2020, deadline are still moving through the review process, according to the FDA.
The list of affected products is available here.
August 10, 2021
U.K. Retailers “Missed” in Menthol Buyback

Photo: Miriam Doerr | Dreamstime.com
U.K. retailers say tobacco companies have “missed” significant volumes of now-illicit menthol cigarettes during the initial returns phase following the country’s ban on such cigarettes.
The U.K. prohibited sales of menthol cigarettes on May 20, 2020. Prior to the ban, tobacco companies pledged to take back and credit retailers for any noncompliant stock remaining once the legislation came into force.
However, six retailers across England told Better Retailing that they still have menthol brands from Philip Morris Limited (PML) and British American Tobacco U.K., with some holding stock with a combined value worth several hundreds of pounds.
BAT U.K. said it carried out a significant menthol pack return exercise from September to December 2020. “Despite our best efforts, some of our retail partners appear to have been missed in this initial returns phase; we are sorry for any inconvenience caused,” a BAT spokesperson said, adding that a second returns phase would be introduced at the end of this year.
PML said it introduced a nationwide “buy-back” scheme from May to July 2020, which covered all plain packaging products with duty paid.
August 10, 2021
Poda Commences Clinical Trials

Photo: Poda Lifestyle and Wellness
Poda Lifestyle and Wellness has started setting up the first clinical trials for its smoking cessation products.
“I have already initiated the process of setting up the first clinical trials related to the efficacy of Poda’s products as smoking cessation tools,” said Poda Chief Medical Officer Jagdeep Gupta, who joined the company in July, in a statement. “I am currently in the process of setting up a pilot study, which will give us a solid platform for developing strong and effective clinical trials.
“These clinical trials will be designed to result in the publication of level 1 evidence in respected medical journals globally if the data provides evidence. The pilot studies will also be designed to establish a scientific basis for the efficacy of Poda’s products as smoking cessation tools and additionally may provide Poda with access to research grants and other funds that can be used for additional studies, clinical trials and validation research.”
The company has also entered into an agreement with Command Marketing predominantly to develop Poda’s e-commerce platform and brand identity. As part of this branding campaign, Command Marketing will also provide investor relations services.
August 10, 2021
Study: Graphic Health Warnings May Work

Image: Tobacco Reporter archive
Graphic health warnings on cigarette packs do indeed scare smokers, but they should be combined with other anti-smoking measures, reports HealthDay, citing new research published by Jama Network Open.
For the study, David Strong, professor in the School of Public Health and Human Longevity Science at the University of California, San Diego, assessed how 357 smokers in San Diego responded to graphic warning labels used on cigarettes sold in Australia.
Participants in the study received one of three types of cigarette packs: a pack with a graphic warning label; a blank pack; or a standard commercially available U.S. pack.
Those who received cigarettes in the standard pack or a blank pack had no change in their positive views of cigarettes, but there was a decline among those who received a pack with a graphic warning label, the investigators found.
Health concerns increased in all three groups, likely because they were forced to think about the health consequences of smoking more often, the study authors noted.
“While these labels make smokers more likely to think about quitting, it did not make them more likely to make a serious quit attempt nor was it sufficient to help them quit their nicotine addiction,” said study senior author Karen Messer.
“Thus, graphic warning labels are an integral component of tobacco control strategies, but they are only one tool for governments to reduce the societal costs from the death and disease caused by tobacco smoking,” Messer said in a university news release.
According to Strong, graphic warning labels are used in more than 120 countries to counter marketing that promotes cigarette smoking. U.S. lawmakers approved graphic health warnings in 2009, but implementation has been stalled until legal challenges to the law by the tobacco industry are resolved.
August 10, 2021
PMI to Buy Respiratory Drug Developer OtiTopic

Photo: ASDF
Philip Morris International announced the acquisition of OtiTopic, a U.S. respiratory drug development company with a late-stage inhalable acetylsalicylic acid (ASA) treatment for acute myocardial infarction.
“The acquisition of OtiTopic is an exciting step in PMI’s ‘Beyond Nicotine’ ambitions,” said Jacek Olczak, CEO of PMI, in a statement. “We have world-class expertise in the research, development and commercialization of aerosolization and inhalable devices to help speed the delivery of this exciting product to market.”
This acquisition is part of PMI’s plan to leverage its expertise, scientific know-how and capabilities in inhalation to grow a pipeline of inhaled therapeutics and respiratory drug delivery beyond nicotine products. Following the completion of clinical trials and pending approvals by the U.S. Food and Drug Administration, PMI can leverage its expertise and the capabilities of other companies in the “Beyond Nicotine” portfolio to bring Asprihale to market.
Asprihale is a patented, dry powder inhalation of ASA delivered through a unique self-administered aerosol—it is expected to move from clinical trials to filing with the FDA for approval in 2022. Early clinical trials have shown that the product system catalyzed peak plasma concentration and the desired pharmacodynamic effect, i.e., inhibition of platelet aggregation in two minutes compared with 20 minutes for coated chewable aspirin, according to PMI. This speed is unprecedented and has significant potential implications for improving the survival of patients at risk of heart attacks.

With its acquisition of OtiTopic, PMI looks forward to completing the planned Asprihale registration program and bringing this important treatment to market to address a significant unmet medical need in a clinical condition where every second counts.
Jorge Insuasty, chief life sciences officer, PMI
OtiTopic will complete its assessment program and filing with the FDA using the FDA’s 505 (b)(2) pathway, a pathway designed for drugs already available on the market but requesting approval either for a new indication, dosage form or regimen, strength, combination with other products, or other unique traits. This pathway will allow PMI to build on existing data available for ASA reference products and focus on delivering the evidence that the inhalable form, Asprihale, outperforms the current standard of care—oral delivery—of ASA.
“In the United States alone, someone has a heart attack every 40 seconds. With its inhalable version of acetylsalicylic acid, OtiTopic has developed an asset that promises to have a much faster onset of effect compared to oral ASA,” said Jorge Insuasty, chief life sciences officer for PMI. “With its acquisition of OtiTopic, PMI looks forward to completing the planned Asprihale registration program and bringing this important treatment to market to address a significant unmet medical need in a clinical condition where every second counts.”
“This transaction aligns well with OtiTopic’s goals of unlocking what we believe to be a significant opportunity in inhaled therapeutics science,” said Kambiz Yadidi, CEO of OtiTopic. “We are entering this transaction to accelerate Asprihale’s FDA filing with the goal of delivering innovative therapies for people with intermediate to high risk for myocardial infarction.”
OtiTopic was founded in 2012 as an innovative pharmaceutical startup company and holds several key patents, differentiated intellectual property, and has confirmed a 505(b)2 pathway through constructive interactions with the FDA.
The acquisition follows other nontobacco acquisitions by PMI. Earlier, the company purchased British drug maker Vectura and Fertin Pharma, a manufacturer of nicotine chewing gum.
August 9, 2021
Philip Morris Raises Vectura Bid

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Philip Morris International has raised its bid to buy Vectura to more than £1 billion ($1.4 billion) reports the BBC.
PMI increased its offer to £1.65 per share after U.S. private equity firm Carlyle offered £958 million Friday.
Vectura previously stated that it was backing Carlyle’s offer and withdrawing its recommendation for PMI’s earlier bid. Vectura argued it could be better positioned under Carlyle’s ownership due to “reported uncertainties relating to the impact on Vectura’s wider stakeholders arising as a result of the possibility of the company being owned by PMI.”
“The PMI increased offer values the entire issued and to be issued ordinary share capital of Vectura at approximately £1.02 billion,” PMI said in a statement. “PMI intends to operate Vectura as an autonomous business unit that will form the backbone of its inhaled therapeutics business.”
PMI’s bid unleashed a storm of criticism from public health advocates who dislike the idea of a tobacco company investing in the lung health business.
In July, U.K. Business Minister Kwasi Kwarteng asked officials to monitor PMI’s proposed takeover of drugmaker Vectura Group.
August 9, 2021
U.K. Mulls Higher Tobacco Buying Age

Photo: Raxxillion
Individuals under the age of 21 may be banned from buying cigarettes and flavored vapor products as part of a plan to curb smoking in the U.K., reports the Daily Mail.
Health Secretary Sajid Javid is reportedly considering the change to help reach the government’s goal of becoming smoke-free by 2030.
“Smoking cuts lives short and costs the NHS billions—we will publish a plan later this year to set out how we will help the country become smoke-free by 2030,” said a Department of Health spokesperson.
Further advertising bans are also reportedly being considered. E-cigarettes are already banned from promotion on TV, radio, online and in print.
Raising the purchase age would be “very, very welcome news,” according to Mary Foy, chair of the Westminster All-Party Parliamentary Group on Smoking. “We know that generally adults don’t take up smoking. It’s children and young people who start and unfortunately get hooked, often for life. Studies show most adults regret ever starting in the first place.”

If you can have sex at 16, join the army and drive a car at 17, you should be allowed to buy tobacco at 18.
Simon Clark, director, Forest
Simon Clark, director of smokers’ group Forest, rejected the idea of raising the tobacco purchase age. “If you can have sex at 16, join the army and drive a car at 17, you should be allowed to buy tobacco at 18,” he said. “In the eyes of the law, you are an adult at 18. Treating young adults like children insults their intelligence. You certainly don’t have to be 21 to know that smoking is potentially harmful. It’s drummed into every child from an early age.”
“Outlawing the sale of tobacco to anyone under 21 won’t stop young people smoking,” he said. “It will simply drive tobacco underground, bypassing legitimate retailers and enriching criminals who won’t stop to ask for proof of age. Far from protecting younger consumers, it will expose many more to illicit and counterfeit tobacco, origin unknown. For some, it may even make smoking cool again.”
August 9, 2021
Media Report Triggers Sell-off of Vapor Stocks

Photo: Cozyta
E-cigarette stocks fell on Aug. 5 after Chinese state media ran reports about the risks of vaping, reports Reuters.
Huabao International Holdings tumbled 8 percent in Hong Kong morning trade while China Boton Group Co. fell 4 percent. Market leader Relx Technology closed almost 5 percent lower in New York after the Xinhua news agency published a report saying that minors were gaining easy access to e-cigarettes.
Xinhua said its reporters made unannounced visits to e-cigarette shops in the northern cities of Tianjin and Shenyang and found that while all had signs stating sales to minors were prohibited, enforcement of the law varied in practice.
The sell-off demonstrated how investors remain on edge and on the hunt for clues about which companies might be vulnerable to state intervention after the property, education and technology sectors were hit by Beijing regulators in recent months with unprecedented sweeping rules.
Similar market sentiment took hold of liquor-related stocks after the Ministry of Science and Technology posted an article citing a study that linked alcohol consumption to cancer.
Investors in Chinese companies often scrutinize state media reports for hints about regulators’ thinking.
China is the world’s largest consumer of tobacco products, with more than 300 million smokers, according to the World Health Organization.
August 6, 2021
Evicted Landowners Seek Compensation

A resettled former commercial tobacco plantation, circa 2005 (Photo: Taco Tuinstra)
A group of Germans and Austrians whose farmlands in Zimbabwe were expropriated during the regime of former president Robert Mugabe has asked a U.S. federal court to confirm an International Center for Settlement of Investment Disputes (ICSID) award in their favor worth more than $260 million, reports Lexis Legal News.
In 2010, members of the von Pezold family commenced arbitration before the ICSID, alleging that the Republic of Zimbabwe breached the Germany-Zimbabwe and Switzerland-Zimbabwe bilateral investment treaties by expropriating their ownership rights, water rights and permits to use agricultural properties in Zimbabwe.
Dating back to the early 20th century when the nation was known as South Rhodesia, the von Pezolds’ ownership rights include an interest in Zimbabwe’s largest tobacco growing and curing operation.
In the mid-2000s, Zimbabwe compulsorily acquired mostly white-owned commercial farm properties with the stated aim of distributing them among landless Black peasants.
On July 28, 2015, the ICSID tribunal ordered Zimbabwe to return the properties and their water rights to the von Pezolds. Zimbabwe appealed but lost. On Nov. 21, 2018, an ICSID committee ordered Zimbabwe to bear in full the arbitration costs and compensate the von Pezolds for 50 percent of their attorney fees and expenses plus interest.
In their petition to the U.S. District Court for the District of Columbia, the von Pezolds state that under the awards with interest, as of July 16, 2021, Zimbabwe owes them $263,210,747.65, £10,137,881.88, ZAR745,498.49 and €1,163.13, with interest continuing to accrue.
Tobacco Reporter has extensively covered the aftermath of Zimbabwe’s controversial land reforms, most recently in June 2018.
August 6, 2021