Author: Marissa Dean

  • FDA Sends More Warning Letters

    FDA Sends More Warning Letters

    Image: theerakit

    On Sept. 14, 2023, the U.S. Food and Drug Administration issued warning letters to 15 online retailers and three manufacturers and/or distributors for selling or distributing unauthorized e-cigarette products. Additionally, in one case, the retailer illegally sold a product to an underage purchaser. The warning letters cite a range of popular and youth-appealing e-cigarette products, including disposable products, marketed under the brand names Elf Bar, EB Design, Lava, Cali, Bang and Kangertech. 

    According to the FDA, the youth-appealing e-cigarette products of focus were identified through rapid surveillance and a data-driven approach to investigations. Retail sales data, emerging internal data from surveys of youth, as well as other data sources helped the agency to identify the rising popularity of these youth-appealing products, which were subsequently prioritized for investigation across the supply chain, from manufacturers to distributors to retailers.

    “Given the rapidly evolving nature of the e-cigarette landscape, it’s essential that we have nimble surveillance tools that can best keep pace to protect public health,” said Brian King, director of the FDA’s Center for Tobacco Products. “They’re a critical component of our comprehensive surveillance toolbox, so that we can proactively identify and swiftly stave off emerging threats, particularly those affecting our nation’s youth.”

  • EU Urged to Embrace THR

    EU Urged to Embrace THR

    Photo: Teo

    Ahead of this year’s EU State of the Union address on Sept. 13 in Strasbourg, France, the World Vapers’ Alliance (WVA) urged President Ursula von der Leyen to tackle the devastating impact of smoking-related diseases in the European Union. The association proposes the EU Commission’s president embrace a coherent EU-wide harm reduction strategy that includes evidence-based approaches to vaping and nicotine pouches, which have been shown to significantly reduce harm compared to smoking.

    “We implore Ursula von der Leyen to finally address the far-reaching impacts of smoking,” said WVA Director Michael Landl in a statement. “Smoking is a public health problem requiring immediate attention, causing more than 700,000 deaths in the EU annually. Evidence is clear that alternative nicotine products, such as vaping and nicotine pouches, can be a game changer in the battle against smoking. The time for brave leadership is now.”

    According to the World Vapers’ Alliance, Sweden has become a bright example that a coherent harm reduction strategy is the key to successfully addressing smoking-related illnesses. Not only is Sweden the first country in the world to reach the smoke-free goal (17 years ahead of the EU targets), but it keeps its commitment to favor harm reduction. Last week, the Swedish government announced its plan to reduce the tax on snus, a smokeless tobacco product similar to modern nicotine pouches, by 20 percent while increasing the tax on cigarettes and smoking tobacco by 9 percent.

    Vaping is still a recommended means of quitting for smokers in France, the United Kingdom, Canada and New Zealand, according to the WVA. This April, the U.K. government launched a “Swap-to-Stop” program aimed to incentivize smokers to quit by exchanging their cigarettes for free vape devices. Following Sweden’s recent move to reduce the tax rate on snus based on a risk-based regulatory approach and the U.K.’s full endorsement of vaping as a tool for smoking cessation, the WVA calls on the European Union to follow their lead in adopting a coherent harm reduction strategy.

    “In Sweden and the U.K., we’ve seen the incredible impact that a harm reduction approach can have on reducing smoking rates and improving public health. These countries lead by example, using a balanced risk-based strategy that includes vaping and nicotine pouches as safer alternatives to smoking. It’s time for the European Union to follow their lead. President von der Leyen has an unparalleled opportunity to set a new course for the EU in her State of the Union speech—one that embraces innovative, evidence-based solutions to tackle the smoking crisis,” added Landl.

  • Morachnick to Lead Charlotte’s Web

    Morachnick to Lead Charlotte’s Web

    Image: Tobacco Reporter archive

    Charlotte’s Web Holdings appointed William (Bill) Morachnick as CEO. Morachnick has also been appointed to the company’s board of directors as a nonindependent director. He replaces CEO Jacques Tortoroli, who has elected to resign from his roles at Charlotte’s Web.

    Morachnick has a record of building premium, differentiated products and brands across multiple channels throughout the world and across a broad range of product categories.

    Prior to joining Charlotte’s Web, Morachnick was president at Santa Fe Reynolds Tobacco International Zurich (SFRTI) from 2006 to 2016. He took SFRTI from a startup to a highly profitable organization, managing several hundred employees and a network of importers/distributors operating in Europe, Asia and the Middle East. SFRTI was acquired by Japan Tobacco Group in 2016 for $5 billion. Morachnick led the subsequent integration of the combined companies as CEO and chairman based in Tokyo, Japan, for two years before returning to the U.S. in 2018.

    Since returning to the U.S., he has served as an executive advisor or board member for several companies seeking to launch and/or expand their businesses in the U.S. and overseas markets.

    “Bill has an accomplished career building businesses in multiple categories,” said John Held, chairman of Charlotte’s Web. “With his proven operational expertise, Bill is well suited to take the reins to lead the Charlotte’s Web team through the next phase of the company’s growth opportunities.”

    The company expressed its gratitude to Tortoroli for his contributions. ‎“Jacques served on the company’s board since November of 2019 and as CEO since late 2021 in a difficult environment devoid of regulatory oversight and clarity,” said Held. “Under his leadership as CEO, Jacques streamlined the organization, reduced the cash burn and recapitalized the company through a strategic $57 million investment from BAT via a convertible loan.”

    In November 2022, BAT announced a £48.2 million ($57.4 million) investment in Charlotte’s Web.

  • BAT Sells Russian Business

    BAT Sells Russian Business

    Image: Tobacco Reporter archive

    BAT has formally entered into an agreement to sell its Russian and Belarusian businesses.

    The buyer is a consortium led by members of BAT Russia’s management team, which, upon completion, will wholly own both businesses. Post completion, these businesses will be known as the ITMS Group.

    “Throughout the transfer process, one of BAT’s key priorities has been the interests of its colleagues in Russia and Belarus,” BAT wrote in a statement. “As part of the agreement, their employment terms will remain comparable to their existing BAT terms for at least two years post-completion.”

    BAT anticipates that the transaction will complete within the next month once certain conditions have been satisfied. Upon completion, BAT will no longer have a presence in Russia or Belarus and will receive no financial gain from ongoing sales in these markets.

    BAT remains confident of delivering its full-year guidance as set out at its half-year results on July 26, 2023.

    BAT’s operations in Russia include a head office in Moscow, 75 regional offices and a manufacturing facility in St. Petersburg. BAT also has an office in Belarus.

    On June 30, 2023, on a constant currency basis, Russia and Belarus accounted for approximately 2.7 percent of group revenue and approximately 2.5 percent of group adjusted profit from operations.

    BAT’s decision to sell its Russian business is a response to Moscow’s military invasion of Ukraine.

  • Korea: Vape Firms Evading Taxes

    Korea: Vape Firms Evading Taxes

    Image: Andrii Yalanskyi

    E-cigarette companies have been evading taxes by declaring false nicotine content when importing liquid nicotine base into South Korea, according to one of the country’s lawmakers, reports The Pulse.

    The accumulated tax evasion is estimated at several trillion won.

    Between January 2020 and July 2023, 20,197 kg of liquid nicotine base was imported, according to documents from the Korea Electronic Liquid Association obtained by Lim Lee-ja of the ruling People Power Party. Approximately 3,300 bottles of e-liquid can be produced with 1 kg of liquid nicotine. Each bottle is levied at KRW53,970 ($40.60).

    Many e-cigarette companies have been mis-declaring tobacco leaf nicotine as tobacco stem and root nicotine to evade taxes since 2016, according to the association. Under Korea’s tobacco laws, nicotine extracted from tobacco stems and roots is not classified as tobacco.

    Data shows that e-cigarette companies changed their declarations from tobacco leaf nicotine to synthetic nicotine when Korea’s Individual Consumption Tax Act was amended in 2021 to impose taxes on all tobacco-derived nicotine. Synthetic nicotine is classified as a simple commodity and not subject to taxes.

    The association stated that annual distribution volume of Korean e-cigarette liquid is 30 million 30 mL bottles, with an estimated annual tax evasion of KRW1.6 trillion.

    In 2019, the Board of Audit and Inspection audited the Korea Customs Service, the Ministry of Environment and the Ministry of Health and Welfare, showing that all the inspected imported nicotine was tobacco leaf nicotine. Falsified declarations have continued since then, according to the association.

    Lim has called on the government to crack down on companies falsely declaring their products.

    Liquid nicotine base is considered a hazardous substance under the Chemical Substance Control Act, regulated by the Ministry of Environment. Imports must be reported to the minister of environment, and companies must obtain an import declaration certificate for hazardous substances.

    Those caught failing to report or falsely reporting the import of hazardous substances are subject to up to one year of imprisonment and up to KRW30 million in fines. None of the companies shown to have falsely declared nicotine products in past audits have been punished to date.

  • Miami Cigar Joins Cigar Association of America

    Miami Cigar Joins Cigar Association of America

    Cigar Association of America logo
    Photo courtesy of the CAA

    Miami Cigar and Co. has joined the Cigar Association of America (CAA), making it the third new member in the past six months.

    “Miami Cigar and Company is an exceptional family-owned, mid-sized cigar company, and we are proud to represent them and its portfolio of fine brands,” said David Ozgo, CAA president. “We certainly look forward to working with them to advance public policy issues affecting cigars.”

    Miami Cigar and Co. was founded in 1989 and now distributes brands such as Tatiana, Nestor Miranda and Don Lino.

    “Miami Cigar and Company is thrilled to join the CAA,” said Jason Wood, vice president of sales and marketing for Miami Cigar and Company. “The association provides a valuable service to the cigar industry with its unparalleled network of state and federal government relations experts. The CAA does exceptional work in protecting the rights of cigar enthusiasts nationwide and all segments of the cigar industry, and we want to be part of that.”

    The CAA is a national trade association representing manufacturers, distributors, importers, suppliers and all channels of retailers in the cigar industry.

  • Scotland Targets Disposable Vapes

    Scotland Targets Disposable Vapes

    Image: Tobacco Reporter archive

    The first minister of Scotland has announced a consultation on a government plan to curb the sale of single-use vapes, reports the BBC.

    “In the next year, we will take action to reduce vaping—particularly among children,” said Humza Yousaf, adding that one of the options under consideration was a complete ban on disposable e-cigarettes.

    A recent Scottish government report found that 22 percent of all under-18s—around 78,000 people—are believed to have used a vape last year, with more young people using them than smoking cigarettes.

    It found that most e-cigarette users under 18 prefer single-use vapes.

    The review by Zero Waste Scotland estimated that up to 2.7 million single-use vapes were littered in Scotland last year. The study estimated that there were 543,000 users of e-cigarettes in Scotland and predicted that without intervention, that will rise to 900,000 by 2027.

    Scotland joins several countries such as France that are considering a ban on disposables.

  • FCTC 2030 Countries Meet in Montenegro

    FCTC 2030 Countries Meet in Montenegro

    Image: Tarik GOK

    FCTC 2030 project countries are meeting this week (Sept. 4–6, 2023) in Montenegro to share experiences and challenges and to plan future action on tobacco control.

    “We are proud that Montenegro, as the host of this year’s meeting of the FCTC 2030 project, is at the center of global tobacco control this week,” said Montenegro’s health minister, Dragoslav Scekic, at the meeting. “I believe that we will also use this meeting to establish the best practices in this area, all with the aim of protecting the health of the population.”

    The FCTC 2030 project is the convention Secretariat’s development assistance initiative that helps to strengthen tobacco control in eligible parties through promoting and supporting governments to accelerate the implementation of the Framework Convention on Tobacco Control (FCTC).

    The project is run by the World Health Organization FCTC Secretariat in partnership with the WHO and the United Nations Development Program.

    One of its core elements is the provision of direct support to selected parties that have demonstrated considerable motivation to advance tobacco control as guided by the Global Strategy to Accelerate Tobacco Control: Advancing sustainable development through the implementation of the WHO FCTC 2019–2025.

    The FCTC 2030 is funded by the United Kingdom, Norway and Australia.

  • Esco Bar Challenges FDA Rejection

    Esco Bar Challenges FDA Rejection

    Credit: Waldemarus

    Pastel Cartel, manufacturer for Esco Bar, has filed a federal lawsuit challenging the U.S. Food and Drug Administration’s refuse-to-accept (RTA) decision for over 100 products included in multiple premarket tobacco product applications (PMTAs) filed by the company, according to Vaping360.

    The lawsuit was filed in the U.S. District Court for the Western District of Texas. It alleges that the FDA acted arbitrarily and capriciously when it issued an RTA for the PMTAs.

    Esco Bar is seeking: a preliminary injunction staying the RTA orders until the case is decided; a judgment finding that the RTAs violate the Administrative Procedure Act and the U.S. Constitution (due process and the Fifth Amendment); and a final judgment setting aside the RTA orders and remanding the company’s PMTAs back to the FDA for further review.

  • Indonesia Legalizes E-Cigarettes

    Indonesia Legalizes E-Cigarettes

    Image: Reezky

    The Indonesian Parliament recently passed Health Law No. 17 of 2023, which categorizes e-cigarettes as addictive substances, according to 2Firsts.

    Teguh Basuki A Wibowo, chairman of the Indonesian Electronic Nicotine Industry Alliance, stated that including e-cigarettes in the legal framework for solid and liquid tobacco products legalizes industry participants and allows smokers to find alternative products.

    The law puts Indonesia on equal footing with countries like the Philippines and the U.K., which have similar legislative frameworks for e-cigarettes, he said.