Author: Staff Writer

New Taipei Prepares To Ban Underage Vaping

Photo: BUSARA
Starting in August, people under the age of 18 will be banned from buying or smoking electronic cigarettes in New Taipei, reports Focus Taiwan, citing local government sources.
Passed by the New Taipei City Council on April 29, the new ordinance is expected to take effect Aug. 6.
After that date, people under the age of 18 caught vaping or carrying e-cigarettes will be required to enroll in a program to help them quit, the city’s health department said in a statement.
Violators who skip the programs without a valid reason will be fined between TWD$2,000 ($71) and TWD$10,000, the department warned.
Individuals or businesses caught selling vapor devices to people under the age of 18 will risk a maximum fine of TWD$100,000.
Taiwan’s current law defines minors as people under 20, but an amendment that was passed last December will lower the age to 18 with effect from 2023.
Meanwhile, the New Taipei health department said city regulations prohibit the manufacture, importation, sale, display and advertisement of e-cigarette products without the relevant permits.
The maximum fine for violation of that regulation is TWD$100,000 and the businesses involved may be closed or suspended, the department said.
July 22, 2021
22nd Century Secures Manufacturing Deals

Photo: Mongkolchon
22nd Century Group has secured a substantial new agreement with a prominent tobacco industry partner that specializes in exporting cigarettes to countries outside the United States. As a result, the company will make investments to optimize margins and improve efficiencies by hiring additional staff at its tobacco manufacturing facility in North Carolina and by installing new equipment at the site to increase efficiencies. 22nd Century says it will also leverage this new relationship and others through its contract manufacturing operations to establish additional distribution channels in preparation for the launch of its VLN reduced-nicotine content (RNC) cigarettes.
“Last year, we were successful in optimizing our contract manufacturing operations. Our net sales and gross profit margin increased year-over-year, and we demonstrated to the industry that we are well positioned as a tobacco manufacturer,” said James A. Mish, CEO of 22nd Century Group, in a statement. “We continue to invest in efforts to prepare for the FDA’s [U.S. Food and Drug Administration] authorization of our modified-risk tobacco product (MRTP) application for our VLN reduced-nicotine content cigarette. With these new agreements and our expanding investments, we are opportunistically using this time to ramp up our operations ahead of authorization as we prepare to make VLN available globally.”
Earlier this year, 22nd Century signed on a new cigar contract manufacturing customer, and it is currently in advanced negotiations with two other significant tobacco industry partners that could further expand 22nd Century’s sales domestically and internationally. 22nd Century will leverage these newly established trade relationships to expand distribution of VLN after the cigarettes are introduced.
In addition to the planned installation of new equipment to reduce waste at its manufacturing facility, the company recently completed an expansion of testing capabilities at the site, which will allow for rapid, in-house analysis of its tobacco. This will improve the production cost per VLN sample by more than 90 percent while significantly reducing the lead time to uncover key data, according to the company. Internal testing of the VLN leaf is scheduled to begin at the facility in August using the newly installed testing equipment.
The company is confident that it is in the final stages of the FDA’s application process to obtain MRTP designation for its VLN cigarettes. The FDA has already authorized 22nd Century’s RNC tobacco technology under the premarket tobacco product application (PMTA) pathway, saying that it is “appropriate for the protection of public health” and concluding that it offers “among several key considerations, the potential to reduce nicotine dependence in addicted adult smokers, who may also benefit from decreasing nicotine exposure and cigarette consumption.”
MRTP designation will allow 22nd Century to communicate and market the key features of its RNC cigarettes, including the headline claim of 95 percent less nicotine. Although VLN contains just 0.5 mg of nicotine per gram of tobacco, the cigarettes taste, smell and smoke like traditional cigarettes, according to 22nd Century. The company says it is prepared to launch its VLN cigarettes within 90 days of receiving authorization.
The FDA has proposed a plan to require all cigarettes sold in the U.S. to be made minimally and nonaddictive. 22nd Century says it is prepared to license its patented RNC tobacco technology to every cigarette manufacturer in the industry to enable compliance with the FDA’s plan.
July 22, 2021
Push to Exempt Soldiers from ‘Tobacco-21’

Photo: Getmilitaryphotos
Members of the U.S. military under 21 years old would again be allowed to buy and use tobacco products on military bases under a proposal being pushed by Senator Tom Cotton, reports The Military Times.
In late 2019, Congress passed legislation raising the federal minimum age to purchase tobacco from 18 to 21. Last summer, military commissaries ended all sales of tobacco products to individuals under 21, although military officials at the time acknowledged they would not strictly police use of the products among underage troops.
Cotton’s proposal would reverse those changes just for members of the military. Any store on Defense Department property that sells tobacco products would be allowed to sell to individuals as young as 18 years old, and “any such member may consume such products on the installation.”
“Tobacco doesn’t impair one’s judgment, so if young troops want a smoke or a dip on an overnight shift or off-duty hours, why should politicians or nanny-state bureaucrats tell them no?” Cotton told Military Times.
Military officials have strongly discouraged use of tobacco products in recent years, spending billions on smoking cessation campaigns. A 2015 federal study found the Defense Department spends more than $1.6 billion per year on tobacco-related medical care, hospitalization and lost workdays.
Among troops, vaping is now more popular than smoking.
July 22, 2021
U.S. Cigarette Prices Reach Record Highs

Photo: Wirestock
The average price of a pack of cigarettes in the United States is now $7.22—up from $4.03 in 2008, reports the U.S. Sun, citing data from the Campaign for Tobacco-Free Kids.
To reduce smoking, 48 states and the District of Columbia have passed 148 cigarette tax increases since 2002.
As a result, the average state cigarette tax has quadrupled from $0.43 to $1.91 per 20-pack today. In Colorado, the tax increased from $1.10 to $1.94 per pack in January this year.
The state taxes come on top of a federal tax of $1.01, which applies to all packs regardless of where smokers live or the brand they buy.
In Colorado, the new state tax generated more than $34 million in its first five months, according to a recent data analysis by The Colorado Sun.
According to the Campaign for Tobacco-Free Kids, tax increases are one of the most effective ways to reduce smoking and other tobacco use.
Every 10 percent increase in cigarette prices reportedly reduces youth smoking by 7 percent and total consumption of cigarettes by around 4 percent.
However, some health advocates believe there are more efficient ways to cut consumption. Tobacco control activist Stanton A. Glantz, for example, has previously claimed that better results can be achieved by smoke-free workplaces, strong graphic warning labels and media campaigns.
July 22, 2021
Brookline Bans Sales to Those Born After 2000

Photo: Ryan
The town of Brookline, Massachusetts, will prohibit the sale of all tobacco-related products to anybody born after Jan. 1, 2000, reports Filter. The restriction, the first of its kind in the United States, is designed to prevent future generations from using not only tobacco but also nicotine.
The law also prohibits individuals and companies from selling vapor products to anyone in that age category.
In November 2020, Brookline officials voted overwhelmingly for the “first-in-the-nation tobacco-free generation,” paving the way for the current ban. On July 19, Massachusetts Attorney General Maura Healey confirmed that the measure did not interfere with any state laws or the constitution of the Commonwealth of Massachusetts, ensuring its legality.
Public health groups lauded Brookline’s decision, which they view as a potential model for others to follow.
“In addition to preventing a new generation from being addicted to nicotine—and facing the long-term health issues that come with it—Brookline citizens who smoke will be further motivated to quit as smoking becomes rarer around them,” said Lauren Huber, the executive director of Action on Smoking and Health (ASH), in a statement.
Harm reduction proponents, by contrast, lambasted the idea. “Not only will enforcement of this become a nightmare, but it continues to push prohibitionist policies that inevitably send people to underground, unregulated markets,” said Matt Sutton, the director of media relations for the Drug Policy Alliance.
“The whole measure is ridiculous, especially if you imagine how it will function in 2030 or 2040,” echoed Clive Bates, a tobacco control expert and former director of ASH (U.K.). “It infantilizes adults, sets up illegal trade between older and younger age groups, and ultimately aims at creeping prohibition, with all the crime and abuse that will bring.”
Brookline has a history of aggressive tobacco control. The suburb was an early adopter of indoor smoking bans, raised the legal age to purchase tobacco to 21 in 2014 and capped the number of tobacco licenses for retailers in the market. In the spring of 2019, Brookline banned the sale of flavored tobacco and vaping products, including menthol. Six months later, Massachusetts passed the same kind of flavor ban statewide.
July 22, 2021
Patent for ‘Bulb’ Technology Cartridge

Photo: phive2015
Healthier Choices Management Corp. (HCMC) has received a patent for its “bulb” technology vaping cartridge, which avoids a potentially toxic reaction between e-liquid, cannabis or CBD oils and the heated metal components of the cartridge.
“The issuance of this patent is significant in our attempts to make vaping safer,” said Jeff Holman, CEO of HCMC, in a statement. “Studies have shown that liquids and oils can act as solvents when they sit in direct contact with a metal coil, thereby leeching out heavy metals, which can then be ingested during the vaping process. This breakthrough technology has the potential to completely eliminate this problem.”
Holman compared the technology to a light bulb. “A light bulb has a metal filament inside, but you can only touch the outer glass, which gets hot from the heat of the filament,” he said. “Similarly, the metal coil being encased in a quartz ‘bulb’ prevents the liquid or oil from coming in direct contact with or ‘touching’ the metal coil. The metal coil heats the quartz, the substance is in contact with the heated quartz, and the vapor is produced without the substance ever touching the metal coil directly.”
July 22, 2021
PMI Reports Higher Quarterly Revenues

Photo: PMI
Philip Morris International reported net revenues of $7.59 billion in the quarter that ended on June 30, 2021, up 14.2 percent from the net revenues reported in the comparable 2020 quarter. Adjusted net revenues were $7.84 billion compared with $6.65 billion in the 2020 second quarter. Second-quarter 2021 operating income stood at $3.13 billion versus $2.73 billion for the previous year’s second quarter. Adjusted quarterly operating income was $3.45 billion, up from $2.8 billion a year ago.
The company shipped 180.49 billion cigarettes and heated-tobacco units during the 2021 second quarter, 6.1 percent more than during the 2020 second quarter. Sales of heated-tobacco units increased 30.2 percent from the 2020 quarter to 24.36 billion units. Combustible cigarette sales increased by 3.2 percent to 156.14 billion sticks over the same period.
“We delivered strong financial performance in the quarter, with adjusted diluted EPS of $1.57 up by 17.8 percent on an organic basis,” said Jacek Olczak, CEO of PMI, in a statement.
“IQOS continued its impressive growth, surpassing an estimated 20 million total users by quarter-end and driving sequential quarterly heated-tobacco unit in-market sales volume growth of 8 percent. We expect this momentum to be bolstered by the launch of IQOS ILUMA starting next month in Japan.”
“We are increasing our full-year adjusted outlook, with organic net revenue growth of 6 percent to 7 percent and adjusted diluted EPS growth of 12 percent to 14 percent on the same basis, mainly reflecting improved total industry volume. This outlook further supports our recently announced three-year share repurchase program of up to $7 billion.”
“In addition, the proposed acquisitions of Fertin Pharma and Vectura Group will reinforce our long-term growth potential in the beyond nicotine space.”
PMI’s adjusted net revenues exclude the impact related to a Saudi Arabia customs assessments. In June 2021, the Customs Appeal Committee in Riyadh notified the company’s distributors in Saudi Arabia of its decisions to largely reject their challenges of Saudi Arabia Customs General Authority assessments.
Based on these decisions, PMI recorded a pre-tax charge of $246 million in the second quarter of 2021, resulting in a $0.14 per share adverse impact on the company’s reported diluted earnings per share. In accordance with U.S. generally accepted accounting principles, the charge was recorded as a reduction of net revenues on the consolidated statement of earnings.
July 21, 2021
Russia Bans Brazilian Leaf Over Pest Concerns

Photo: Tobacco Reporter archive
Russia has banned tobacco imports from Brazil and four other countries as of Monday, July 19, reports Datamar News, citing authorities’ concerns about infestation.
The announcement was made on July 15 by the Russian federal service for veterinary and phytosanitary surveillance, which cited concerns about the phytosanitary status of tobacco from various countries destined for the Russian Federation and the systematic violation of the phytosanitary requirements of the Eurasian Economic Union (EAEU).
To date this year, Russian inspectors have detected the Megaselia scalaris fly in 28 tobacco shipments, according to a statement published on the website of the Russian Trade Representative in Brazil. Megaselia scalaris is considered a quarantine pest throughout the EAEU.
Brazil’s Ministry of Agriculture said it had not been officially informed about the decision. According to data from the ministry, Brazil exported almost 20,000 tons of leaf tobacco and related products valued at $43.7 million to Russia in 2020.
The ban comes at a bad time for Brazil’s leaf merchants, many of whom are in the shipping stage of the tobacco season and have been forced to postpone shipments to a major market.
July 21, 2021
Sgambelluri Named EVP of Sales at ITG Brands

Photo: tadamichi
ITG Brands has appointed Shane Sgambelluri executive vice president of sales. Sgambelluri will report to Kim Reed, who previously held the top sales role before being named president and CEO on June 1. Sgambelluri has more than 23 years of leadership experience in the consumer packaged goods industry and most recently served as vice president of Kellogg Company’s U.S. grocery business.
At Kellogg, Sgambelluri was responsible for $2.5 billion in sales, representing over 25 percent of the company’s business. He oversaw Kellogg’s grocery portfolio serving national, regional and independent customers and led strategic joint business planning partnerships with major accounts that included Wal-Mart, 7-Eleven and Walgreens. Prior to his nearly two decades with Kellogg, Sgambelluri held positions at two national broker agencies, Crossmark and Advantage Sales & Marketing.
“Shane’s dedication to strong customer relationships and creative solutions to win in the marketplace will immensely benefit our sales operation while his experience managing large, diverse teams will be an asset to our dynamic sales force,” said Reed in a statement. “I am thrilled to welcome Shane to the ITG Brands team.”
July 21, 2021
Aspire Sets Terms for Public Offering

Photo: Aspire Global
Aspire Global, an e-cigarette and vaping brand, announced terms for its IPO on July 16.
The Shenzhen, China-based company plans to raise $120 million by offering 15 million shares at a price range of $7 to $9, according to Renaissance Capital. At the midpoint of the proposed range, Aspire Global would command a market value of $1.3 billion.
Aspire is a vertically integrated provider of e-cigarette vaporizing technology. Its tobacco vaping products are sold through a distribution network of more than 150 distributors in 30 countries. In December 2020, the company also commenced the marketing of cannabis vaping technology products in the U.S.
Aspire Global was founded in 2010 and booked $82 million in sales for the 12 months ended Dec. 31, 2020. It plans to list on the Nasdaq under the symbol ASPG. Tiger Brokers, EF Hutton, TF International and China Merchants Securities are the joint bookrunners on the deal.
Aspire Global would be the second Chinese vaping company to list on the New York Stock Exchange. Unlike RLX Technology, which is being sued for misleading investors about regulatory risks in China, Aspire sells most of its products outside the Chinese market.
July 21, 2021