Author: Staff Writer

Call for Inquiry into Illicit Tobacco Market

Photo: Tobacco Reporter archive
British American Tobacco has called for an inquiry into South Africa’s tobacco market following a new report showing surging sales of illicit cigarettes.
The number of shops selling illegal cigarettes in the Eastern Cape has more than doubled in the four months since the last time results were released, according to a recent Ipsos report. In KwaZulu-Natal, the rate has shot up by one-third. Two out of three shops in the hotspot provinces of Free State, Gauteng and Western Cape sell illegal cigarettes, and illegal cigarettes are on sale in nearly half (41 percent) of all shops nationwide.
Five times as many outlets on petrol forecourts now sell illegal cigarettes since the last time results were released, according to BAT. Illegal cigarettes are being sold for as little as ZAR6 ($0.42) per pack, a fraction of the Minimum Collectible Tax (MCT) rate of ZAR21.60 per pack of 20.
“This research is damning proof that authorities have failed to bring South Africa’s colossal criminal market in cigarettes under control,” said BATSA General Manager Johnny Moloto in a statement. “Tax-evading manufacturers who exploited last year’s lockdown ban are now running rampant and costing South Africans huge sums of money at a time when every cent is a lifesaver. It is nothing short of a national emergency that demands a full-scale inquiry into the whole industry.”
According to BAT, brands owned or licensed by members of the Fair-Trade Independent Tobacco Association feature prominently on the black market. The FITA in the past has rejected suggestions that its members are involved in the illicit trade.
The latest Ipsos fieldwork was carried out from June 15–22, 2021, and follows similar studies in March and February of this year.
Moloto urged the government to introduce of a minimum retail sales price of ZAR28 for a pack of 20, ratify the World Health Organization’s illicit trade protocol and introduce a track-and-trace system, among other measures to fight the illegal cigarette trade.
July 7, 2021
Former Juul Executive Joins Poda Lifestyle

Photo: Poda Lifestyle and Wellness
Former head of corporate affairs for Juul Labs Nicholas Kadysh has joined Poda Lifestyle and Wellness as a member of the global advisory board.
With over a decade of experience as a public affairs and regulatory expert, Kadysh has led government relations and regulatory departments for a number of large corporations, including acting as head of corporate affairs for Juul Labs, as government affairs and public policy leader for General Electric Canada and as director of public affairs for Red Bull Canada. Kadysh is currently the founder and CEO of PharmAla Biotech.
Prior to his work in the corporate sector, Kadysh gained a deep understanding of government as a campaign and legislative staff member in multiple levels of government, most recently directing the outreach department of the Office of the Leader of the Opposition at Queen’s Park in Toronto. He has also worked at the Canadian Parliament as a policy advisor.
Kadysh is trilingual (English, French and Russian) and is a graduate of Queen’s University. He is active in nonprofit and community initiatives in Toronto, including fundraising for Toronto East General Hospital and as a member of the board for Yonge-Dundas Square.
“I believe that Poda is well poised to gain significant market share in the rapidly growing heat-not-burn market,” said Kadysh in a statement. “With my vast experience in public affairs and as a regulatory expert, I look forward to helping guide Poda as they continue their global expansion. Entering highly regulated markets requires careful planning and skillful execution, and there are many potential pitfalls to be avoided.”
“Having worked closely with Nick at Juul Labs Canada, I can personally attest to the skill and expertise that Nick brings to the table,” said Michael Nederhoff, previous president of Juul Labs Canada, who joined Poda’s global advisory board in early July. “Nick has a wealth of regulatory experience across various categories and in multiple countries, which will be invaluable as we scale the business.”
July 7, 2021
Smoking Plunged During Lockdown

Photo: sezerozger
South Africa’s 2020 Covid-19 lockdown and temporary tobacco sales ban resulted in the fastest fall in smoking prevalence in the country’s history, according to a new study published in Tobacco Control.
Four unpublished surveys estimate that between 16 percent to 49 percent of smokers quit during the five-month ban on tobacco sales. The threefold variance in outcomes is likely due to the characteristics of the respondents studied.
South Africa prohibited tobacco sales from March to August 2020 to help prevent the spread of the coronavirus. The aim was to decrease both disease severity among infected smokers and the demands on the health system.
The 2020 lockdown provided a unique opportunity to study smokers’ responses to the market disruption created by a sudden prohibition on cigarette sales. The ban was unexpected—creating challenges and opportunities for smokers and vapers. Smokers could maintain or change consumption levels—buying cigarettes illegally, if necessary—or stop smoking.
Public perceptions of the ban and the behavior of smokers were monitored by several surveys, but these produced inconsistent data. Despite this, the findings of some surveys were prominently reported in the media, and some also featured in litigation between the tobacco industry and the government.
In December, the country’s High Court ruled that the measure was unconstitutional.
Data showed that the prevalence of cigarette smoking declined during the lockdown and there was evidence that this was the fastest fall in smoking prevalence in the country’s history. The extent of the fall in smoking is uncertain because of methodological limitations, according to the authors, who suggest that better communications from government on the rationale for a ban on sales and a clamp down on illicit sales may have increased compliance.
Prevalence studies post-lockdown, using probability sampling, may show more accurately how many quit, how many relapsed and the size of the illicit market.
July 7, 2021
Denmark Adopts Plain Packaging

An example of plain packaging from Australia, which pioneered the concept.
(Photo: Taco Tuinstra)
In December 2020, the Danish Parliament adopted an amendment to the Tobacco Act establishing a requirement to ensure that “each unit pack and any outer packaging [of tobacco products] has a standardized design,” according to the Framework Convention for Tobacco Control. This requirement does not apply to cigars and pipe tobacco.
Subsequently, the minister of health issued Executive Order 572 of March 2021 detailing the standardized design and packaging requirements applicable to individual packets, outer and inner packaging and packaging material of tobacco products and herbal smoking products. These include standardized design requirements regarding surfaces, text, wrapping material and markings. Executive Order 699 of April 2021 further extends the applicability of plain packaging provisions to electronic cigarettes and refill containers with and without nicotine.
The measures for tobacco and herbal smoking products went into force on July 1, 2021, and come into full force on April 1, 2022.
The measures for electronic cigarettes and refill containers will come into force on Oct. 1, 2021, and come into full force on Oct. 1, 2022.
July 6, 2021
Sales Resume Historical Drop as U.S. Reopens

Photo: Africa Studio
U.S. demand for combustible cigarettes declined 11.3 percent year over year, resuming their historical rate of decline following a temporary increase during 2020, reports The Winston-Salem Journal, citing the most recent Nielsen survey of convenience stores. The report lists total nicotine volumes down 9.4 percent for the same period.
In the early months of the Covid-19 pandemic, U.S. smokers increased their cigarette purchases in response to stay-at-home orders. This year has seen a return to more typical shopping conditions.
Philip Morris USA traditional cigarette volumes fell 9.5 percent year over year while Reynolds had an overall 9.2 percent decrease and ITG Brands was down 6.3 percent.
Tobacco manufacturers have been able to offset much of the recent volume declines through a series of per-pack list price increases in recent months.
For example, R.J. Reynolds Tobacco Co. will increase the list price of certain brands by $0.14 per pack on July 5, according to a report by Goldman Sachs analyst Bonnie Herzog.
Meanwhile, sales of electronic cigarettes were down 4.9 percent.
Sales overall have slumped since February 2020 when the Food and Drug Administration implemented its latest round of heightened regulations on the products.
Those restrictions required manufacturers of cartridge-based e-cigarettes to stop making, distributing and selling “unauthorized flavorings” by Feb. 6 or risk enforcement actions.
With a share of 49.5 percent, Juul remains market leader, followed by Vuse (33.5 percent), NJoy (4.5 percent) and Blu eCigs (3.1 percent), according to Nielsen.
July 4, 2021
PMI and TissUse to Conduct Joint Research

Photo: vegefox.com
Philip Morris International and TissUse have signed a collaboration agreement to utilize PMI’s InHALES technology in combination with TissUse’s proprietary multi-organ-chip (MOC) platform to enable inhalation exposure of functional human tissues in homeostasis at minute scale in vitro.
The two partners will develop an integrated human aerosol test platform that emulates the entire human respiratory tract in terms of dimension and architecture. PMI has established a platform, InHALES, that matches the architecture and characteristics of the human respiratory tract.
TissUse has established the widely used Humimic MOC platform, which enables functional human tissue response in vitro. A “plug-and-play” interface between the two technologies will allow physiologically relevant exposure to complex aerosols in the background of an in vivo-like organization and breathing performance of the human lungs.
The novel integrated Humimic–InHALES test platform will allow acute and subchronic tests on lung models in combination with miniaturized human liver equivalents, enabling assessment of local effects on the biological barrier of lung epithelia, penetration of substances into blood circulation and eventual systemic effects.
According to PMI, Humimic–InHALES will provide a highly predictive model for assessing respiratory toxicity and systemic human effects of inhaled aerosols and their constituents, such as environmental toxins, smoke particles, airborne pathogens and inhalable medications.
“The agreement meets PMI’s ambitions to extend its competence in aerosol applications to the development of new methods for exploratory research and translational sciences, which will not only help advance the research and development of PMI products but also broadly support biomedical research beyond PMI’s core business,” said Julia Hoeng, global head of discovery at PMI, in a statement.
“This agreement synergizes the complementary ideas, know-how and experience of both companies. We are very much looking forward to enhancing TissUse’s highly innovative product and assay portfolio through this collaboration,” said Reyk Horland, CEO of TissUse.
July 4, 2021
Tobacco Earnings Reach Half Billion

Photo: Taco Tuinstra
Zimbabwe has earned $500 million from tobacco sales since the start of the 2021 selling season, reports The Manica Post.
Statistics released by the Tobacco Industry and Marketing Board (TIMB) indicate that the highest price offered for tobacco grown under contract this season is $6.70 per kg, up from $4 last year.
According to estimates, at least 200 million kg of tobacco will be sold this season compared to 180 million kg, valued at $452 million, which were sold last year.
Crop hectarage went up by 6.84 percent from 117,000 hectares during the 2019–2020 season to 125,000 hectares of crop this year.
At day 60, at least 190 million kg valued at $500 million had been sold at an average price of $2.75, up from $2.44 last year.
About 151 million kg, valued at $360 million, were sold during the same period last year.
The TIMB has set the minimum support package that every contractor should provide to a farmer at $1,000 per hectare for smallholder farmers and $4,000 per hectare for commercial farmers.
July 4, 2021
FDA Urged to Extend Enforcement Deadline

Photo: Oleksandr Moroz
A coalition of 23 organizations has asked the U.S. Food and Drug Administration to follow the recommendations of the Small Business Administration (SBA). Earlier this year, the SBA urged the FDA to allow nicotine products to remain on the market for another year after the current Sept. 9, 2021, deadline while their premarket reviews are in progress.
Due to the large volume of PMTAs submitted—the FDA says it received more than 6 million applications—the FDA will unlikely be able to process all submissions before manufacturers are required to pull their products off the market, according to the SBA.
In a letter to the FDA prepared by the Americans for Tax Reform (ATR), the 23 organizations say that the FDA’s promise to exercise discretion in its enforcement provides insufficient certainty for businesses who have complied with all relevant regulations and have not received authorization due to processing delays by the FDA.
If an extension is not granted, the letter cautions, there could be devastating consequences for businesses, particularly small businesses. Furthermore, any potential reduction in the supply of safe alternatives to tobacco could have a negative impact on public health across the United States and lead to an increase in tobacco-related mortality, according to the authors.
The letter also argues that “millions of consumers who depend on ENDS products for their health and thousands of businesses who depend on these products for their livelihood are threatened by this needless bureaucratic uncertainty.” The only way to avert such an adverse outcome for businesses and consumers is for the FDA to obtain a court order allowing it to extend the existing moratorium on enforcement by another year, according to the letter writers.
“The vaping industry, unlike many others, was created by small businesses, and these same small businesses continue to drive innovation in the market,” the coalition letter states. “Without these entrepreneurs, the vape industry will be consolidated into a few large corporations, causing prices to rise and consumer choice to decrease.”
July 4, 2021
22nd Century Reworks Panacea Investment

Photo: Mitch
22nd Century Group has signed a definitive agreement to restructure its strategic investment in Panacea Life Sciences in line with the ongoing development of 22nd Century’s strategic partnership network.
Under terms of the agreement, 22nd Century’s existing $7 million note in Panacea will be exchanged for ownership of Needle Rock Farms, located in a Colorado hemp/cannabis growing location and valued at $2.2 million. The company will also receive a new $4.3 million note and $500,000 in Panacea equity. The new note is backed by a mortgage on the Panacea Life Sciences operations building located in Golden, Colorado, appraised at $10.7 million. Panacea will retain certain farm assets under its own nameplate of PANA Organic Botanicals at Needle Rock.
Also under the agreement, $7 million in Panacea Life Sciences Series B Preferred Stock held by 22nd Century will be converted into 91 million shares of Exactus as part of a business combination transaction via share exchange with Panacea under which Panacea will become publicly traded. The transaction is expected to be immediately accretive to 22nd Century.
“This exchange is an exciting leap forward for 22nd Century as we advance our upstream value chain strategy to bring highly disruptive hemp and cannabis plant lines to market. It is also highly attractive to 22nd Century on a financial basis, creating immediate value, asset-backed future value and potential future liquidity from an existing investment,” said James A. Mish, CEO of 22nd Century Group, in a statement.
“Needle Rock Farms is a world-class farming operation in a prime growing location where we already have plants in the ground toward our goal of revenue recognition from our cannabis franchise in the second half of 2021. We will also retain access to Panacea’s extraction, purification and testing equipment located in Golden, Colorado, for the benefit of our customers.”
“Rapidly growing demand means that mass cultivation is quickly becoming the critical challenge in the cannabis industry. Most existing plant lines do not exhibit the stable genetics, predictable yield or specific composition of cannabinoids required to fully unlock the value of the cannabis industry,” said Mish. “22nd Century can provide the stable, predictable plant solutions required to achieve true commercial scale and do so in as little as two years versus 7 to 10 years through traditional processes.”
July 2, 2021
Nederhoff joins Poda Lifestyle and Wellness

Photo: Poda Lifestyle and Wellness
Former Juul Canada President Michael Nederhoff has joined Poda Lifestyle and Wellness as a member of the global advisory board and consultant to Poda’s management team and the company’s board. As part of the consulting agreement, Nederhoff will be assisting Poda with its global expansion.
At Juul, Nederhoff was instrumental in dealing with commercial and regulatory aspects of the e-cigarette market. In addition, Nederhoff was previously responsible for launching Red Bull and CytoSport into Canada, and he is currently the CEO of Shelter.
“Poda’s revolutionary heat-not-burn product is exactly what I was looking to get behind to support a smoke-free future,” said Nederhoff in a statement. “There are more than 1.3 billion smokers in the world, and reduced-risk smoking products are essential to the longevity of this large population. I look forward to using my extensive experience in launching major CPG products to assist Poda as they roll out their global strategy.”
“Bringing Mr. Nederhoff onto the Poda team marks the addition of yet another seasoned industry-specific executive to our global advisory board, and we now have a well-rounded slate of proven leaders,” said Poda CEO Ryan Selby.

Bringing Mr. Nederhoff onto the Poda team marks the addition of yet another seasoned industry-specific executive to our global advisory board, and we now have a well-rounded slate of proven leaders.
Ryan Selby, CEO, Poda Lifestyle and Wellness
“Mr. Daniel Chen brings phenomenal experience and expertise in the global manufacturing and distribution realm and has worked with some of the biggest tobacco companies globally, including Japan Tobacco International, Imperial, British American Tobacco, Godfrey Philips India, Philip Morris International and China National Tobacco.
“Jon Ruiz spent over 15 years as a top-level executive at Philip Morris International—one of the largest tobacco companies in the world and the current leader in the global heat-not-burn market with their IQOS product.
“Mr. Michael Nederhoff is an expert in the fast-moving consumer goods market and was the Canadian president of the most successful e-cigarette company in the world (Juul). These individuals have joined the Poda team because they believe in the massive potential for Poda to capture substantial market share in the rapidly growing global heat-not-burn market. We already have an incredible product in Poda and our Beyond Burn Poda Pods, and now we are continuing to build an incredible team of proven professionals to support our global expansion goals. This is another major step toward our goal of becoming a major player in the global heat-not-burn market” stated Selby.
Pursuant to the consulting agreement, Poda has granted 485,000 restricted share units to Nederhoff at a price of $1.39.
July 2, 2021