Author: Taco Tuinstra

  • GVB Opens Distribution Facility in Netherlands

    GVB Opens Distribution Facility in Netherlands

    Photo: vchalup

    GVB Biopharma has opened a distribution facility in the Netherlands to support its growing business in Europe, the Middle East and Africa. The new facility will increase customer access to GVB’s hemp/cannabis products, speed up transaction flow and optimize cross-border tax and customs treatment, according to GVB parent company 22nd Century Group.

    Recent increases in GVB’s U.S. manufacturing capacity are complementary to the advent of the company’s Netherlands distribution facility, the company noted. Additional capacity is in part earmarked to satisfy increasing demand in European markets where margins are higher than in the U.S.

    “We are excited to expand our business operations in Europe, allowing our customers and partners to access quality products in a more efficient manner,” said 22nd Century Group CEO James A. Mish in a statement.

    “With our new Netherlands distribution facility, we can now deliver product to our partners in half the time and better serve our growing customer base with quality distillate and isolates. In Europe, the hemp/cannabis industry is expanding rapidly and is expected to reach €3.2 billion [$3.33 billion] by 2025. Our new facility will allow us to capture more of that market share, scale our operations and expand our customer base in this region.”

  • ‘Implementation of Tobacco Act Flawed’

    ‘Implementation of Tobacco Act Flawed’

    Azim Chowdhury

    The U.S. Food and Drug Administration’s implementation of the 2009 Tobacco Control Act, which gave the agency authority to regulate tobacco products, has been fundamentally flawed from the beginning, according to Azim Chowdhury, a partner in the Keller and Heckman law firm.

    Writing in Filter, Chowdhury explains that the premarket authorization requirements for “new” products subjects potentially reduced-harm products to nearly insurmountable hurdles while allowing preexisting products, including combustible cigarettes, to mostly escape FDA scrutiny.

    In his article, Chowdhury suggests several ways in which the FDA can more effectively implement the Tobacco Control Act.

    For example, rather than conducting reviews in silo, the FDA should consider the totality of evidence in a premarket tobacco product application, according to Chowdhury.    

    “It is also critical that the FDA hamper the spread of counterfeit products, which may be riskier for consumers and are drowning out the small businesses and vape shops that continue to bear the brunt of FDA enforcement,” he writes.

    “Finally, the FDA should shift more resources to developing reasonable safety, quality and marketing product standards.”

  • Bomhard: Imperial Gaining Traction

    Bomhard: Imperial Gaining Traction

    Imperial Brands reported net revenue of £32.55 billion ($38.93 billion) for its fiscal year 2022, which ended Sept. 30. The figure was down 0.7 percent from 2021. Operating profit declined 14.7 percent to £2.68 billion. On an adjusted basis, net revenue was up 2.7 percent to £7.79 billion while operating profit increased 3.5 percent to £3.69 billion.

    Imperial Brands insisted its five-year strategy is on track and delivering improved operational performance. The company’s aggregate market share in its top-five combustible markets was up 35 base points, reflecting Imperial’s first annual share gain in more than five years. Net revenue from next-generation products was up 11 percent driven by market launches in all categories. The company also reported increased shareholder returns with 1.5 percent growth in dividend enhanced by an ongoing £1 billion share buyback.

    “In line with our five-year strategy, increased investment and a more consumer-centric approach have improved delivery in both our priority combustible markets and our next-generation product operations,” said Imperial Brands CEO Stefan Bomhard in a statement. “At the same time, disciplined capital allocation has strengthened our balance sheet to reach our target leverage. This has enabled us to enhance shareholder returns through an ongoing share buyback program alongside a progressive dividend.

    “In tobacco, a sharper focus on brand building and sales execution has supported aggregate market share gains in our top five priority markets. Price mix improved in the second half, helping to offset the anticipated acceleration in volume declines, which occurred as borders reopened, prompting a return to pre-Covid buying patterns.

    “In NGP, successful consumer trials have validated our approach, and we are now stepping up investment in new product and market launches across all three product categories. Our heated-tobacco proposition, Pulze and iD, continued to perform well in our pilot markets of Czech Republic and Greece, and we have recently launched in Portugal, Hungary and Italy, the largest European market for this category. Following the successful French trial of our new vapor device, Blu 2.0, we have now launched in the U.K. In modern oral, we expanded our range of flavors for Zone X in key markets and successfully introduced the Zone X format into Norway.

    “Looking ahead, we are well positioned to deliver against the next phase of our five-year strategy. The additional investment and the actions we have taken during the initial two-year strengthening phase have built stronger foundations as we face into a more challenging macroeconomic environment. We are well placed to build on our track record of delivery over the next three years, improving returns and creating sustainable growth in shareholder value.”

  • Smoking and Vaping Banned at World Cup

    Smoking and Vaping Banned at World Cup

    Photo: GIROMIN Studio

    In line with the FIFA Event Policy for Tobacco and the World Health Organization’s recommendations for mega-sporting events, Qatar has banned smoking and vaping in stadiums during the FIFA football World Cup scheduled for Nov. 30–Dec. 18.

    The ban on vaping appears redundant as Qatar already bans the import, sale and purchase of e-cigarettes. Violators risk fines of up to QAR10,000 ($2,747) or up to three months in prison.

    Qatar plans to deploy 80 tobacco inspectors to support FIFA volunteers and security staff in enforcing the restrictions.

    The country will be assigning a team of 80 tobacco inspectors to support security staff in enforcing the smoking restrictions during the World Cup.

    “Qatar has been a frontrunner in tobacco control in the region,” said Kholoud Ateeq K M Al-Motawaa, head of noncommunicable disease for Qatar’s Ministry of Public Health, in a statement. “For the FIFA World Cup, tobacco control measures have been developed for inside and outside stadiums, especially in public places, while tobacco-free environments in fan zones will be rigorously enforced where supporters without tickets can watch games on large screens surrounded by smoke-free air.”

    In an overview of World Cup restrictions prepared for American soccer fans, smokeless tobacco manufacturer Nicokick noted that, unlike e-cigarettes, nicotine pouches are legal in Qatar.

  • Kaival Brands Inks Marketing Deal

    Kaival Brands Inks Marketing Deal

    Photo: Yingyaipumi

    Kaival Brands Innovations Group, the U.S. distributor of Bidi Vapor products, has reached a three-year extension agreement with QuikfillRx, the third-party vendor responsible for executing Kaival Brands’ marketing and sales strategies.

    As part of the deal, QuikfillRx will be rebranded as Kaival Marketing Services (KMS) to more properly reflect the commitment of KMS to the success of Kaival Brands.

    On Aug. 23, 2022, the 11th Circuit Court of Appeals overruled the Food and Drug Administration’s marketing denial order related to Bidi Vapor’s Bidi Stick electronic nicotine-delivery system. That decision has allowed Bidi Vapor to continue to market, through Kaival Brands, all flavor varieties of the Bidi Stick in the United States.

    The three-year extension with KMS was executed in preparation to support the anticipated improved sales volumes arising from this decision and the increase of Bidi Stick sales and marketing activities. In addition to monthly cash payments, which will be lower than during the initial term of the agreement, and a one-time upfront vested common stock option award, KMS will be eligible to receive performance-based common stock option awards from Kaival Brands that can vest annually based on total net revenues and profit margins achieved by Kaival Brands from KMS’ efforts over the term of the agreement, with a maximum vesting to occur upon achievement of $180 million in total net revenues reported within the three-year term.

    “KMS has been an integral part of the Kaival story since our inception. Their industry knowledge and expertise, experience working with our team and unmatched around-the-clock service is best in class.”

    Eric Mosser, president and chief operating officer, Kaival Brands

    “KMS has been an integral part of the Kaival story since our inception,” said Kaival Brands President and Chief Operating Officer Eric Mosser in a statement. “Their industry knowledge and expertise, experience working with our team and unmatched around-the-clock service is best in class. As part of ongoing corporate efforts in anticipation of increasing sales activity following Bidi Vapor’s merits case win, it became clear that reaffirming our relationship with KMS was an important step to manage growth.”

    “We are happy to continue our service with Kaival Brands and its commitment to responsible marketing,” said KMS President Russell Quick. “Our combined efforts at preventing underage use of vaping devices and focus on the needs of legal-age smokers looking for an alternative to combustible cigarettes stands as a model for the industry.”

  • Howard to Lead Swisher’s External Affairs/Compliance

    Howard to Lead Swisher’s External Affairs/Compliance

    Photo: Swisher

    Swisher has promoted Chris Howard to executive vice president of external affairs and new product compliance. Howard succeeds Joe Augustus, who recently announced his retirement after more than 33 years with the company.

    Howard previously held the role of senior vice president of general counsel and chief compliance officer at E-Alternative Solutions (EAS), a Swisher company. Over the past six years, he has played a leading role in advancing several EAS and Swisher initiatives and regulatory compliance programs, including for Leap and Rogue tobacco products as well as novel CBD products.

    In his new role on the executive leadership team, Howard will accelerate Swisher’s external affairs strategic objectives and mold a new section providing regulatory approval and compliance support for new product development. 

    “Through his ongoing efforts advocating Swisher and industry interests and advancing major initiatives, Chris has been a key leader and strategist for our company in his six years with us,” said Neil Kiely, president of Swisher.

    “Chris’ deep experience and unique skillset make him the perfect candidate to help us navigate the evolving regulatory environment in our industry—we look forward to the impact he will deliver.”

    Howard has a long history in external and regulatory affairs, having previously served as general counsel for Fontem Ventures, associate general counsel for Lorillard Tobacco Company and several in-house counsel positions with Syngenta.

  • U.S. Health Warnings Date Pushed Back Again

    U.S. Health Warnings Date Pushed Back Again

    Image: FDA

    A U.S. court has postponed the effective date of the Food and Drug Administration’s graphic cigarette health warning regulation from Oct. 6, 2023, to Nov. 6, 2023, reports Convenience Store News. The ruling represents at least the 10th judge-ordered delay.

    Issued on Nov. 7, the court order also pushes back the preferred filing deadline for manufacturers and retailers to submit cigarette health warning rotational plans to the FDA by 31 days, according to the National Association of Tobacco Outlets (NATO).

    Each manufacturer and retailer that creates its own cigarette advertisements is required to file a plan with the FDA that sets forth the schedule for rotating the eleven graphic cigarette health warnings on cigarette advertisements. The preferred filing deadline for cigarette health warning rotational plans should now be Jan. 6, 2023, NATO said.

    The FDA released its final rule requiring new graphic warnings for cigarettes in March 2020. The rule calls for labels that feature some of the lesser known health risks of smoking, such as diabetes. The graphic warnings must cover the top 50 percent of the front and rear panels of packages as well as at least 20 percent of the top of advertisements.

    In addition, the warnings must be randomly and equally displayed and distributed on cigarette packages and rotated quarterly in cigarette advertisements.

    In April and May 2020, cigarette manufacturers and retailers sued the FDA, arguing that the graphic warning requirements amount to governmental anti-smoking advocacy because the government has never forced makers of a legal product to use their own advertising to spread an emotionally charged message urging adults not to use their products.

    In a more recent challenge, tobacco companies argued that the deadline was too onerous due to the impact of the Covid-19 pandemic. They also pointed to the risk that they would lose their investments in new packaging if the graphic health warning requirement were to be thrown out in court.

    In March 2021, the Texas District Court granted a motion by the plaintiffs to postpone the effective date of the final rule to April 14, 2022. The move was followed by additional postponements.

     

  • BAT Invests in Charlotte’s Web

    BAT Invests in Charlotte’s Web

    Photo: bukhta79

    BAT is investing £48.2 million ($57.4 million) in Charlotte’s Web Holdings. Based in Colorado, USA, and listed on the Toronto Stock Exchange, Charlotte’s Web offers hemp extract wellness products. Its product formats include tinctures, capsules, chews and topicals.

    “The appeal of Charlotte’s Web is clear to us: a wide portfolio of high-quality products, strong brand equity, an extensive retail presence and robust B2C e-commerce platform serving a loyal U.S. consumer base and a track record of in-depth scientific research,” said BAT Chief Growth Officer Kingsley Wheaton in a statement.

    “Our investment in Charlotte’s Web represents another step for BAT in our exploration beyond tobacco and nicotine.”

    “This investment will provide Charlotte’s Web with funding that we anticipate will help unlock deeper and broader research and development that is key to our continued innovation, global footprint and the advancement of our intellectual property portfolio,” said Jacques Tortoroli, CEO of Charlotte’s Web.

  • Korea to Crack Down on E-liquid Tax Evaders

    Korea to Crack Down on E-liquid Tax Evaders

    Photo: makistock

    South Korea plans to crack down on traders who try to evade taxes on e-liquids by falsely claiming that their products contain synthetic nicotine rather than tobacco-derived nicotine, reports The Korea Bizwire.

    On Nov. 10, the Korea Customs Service announced it has developed a highly accurate method to identify whether the nicotine contained in e-liquid is extracted from tobacco leaves or created in a laboratory. 

    This method uses derivatization technology to increase the detection sensitivity by a factor of 30. 

    Classified as cigarettes under tax laws, e-liquids containing natural nicotine are subject to an inland duty of KRW1,799 ($1.32) per mL. 

    By contrast, e-cigarettes containing synthetic nicotine are classified as manufactured goods and are therefore exempt from cigarette consumption taxes. 

  • Iranian Tobacco Mulls Investment in Zimbabwe

    Iranian Tobacco Mulls Investment in Zimbabwe

    Photo: Taco Tuinstra

    The Iranian Tobacco Co. wants to invest in Zimbabwe to reduce the cost associated with buying tobacco through middlemen, reports The Sunday Mail. Among the areas the Iranians are targeting are irrigation, curing and mechanization. They also want to contract with farmers and set up factories in Zimbabwe. 

    The investments were discussed during a visit to Tehran by a delegation led by Zimbabwe First Lady Auxillia Mnangagwa.

    “We get our needs through agents, and prices go higher for us and also causing Zimbabwean farmers to have little profit,” said Iran’s vice president of commerce and economy, Hamid Gharesheikh, during the meeting.

    “We want to get companies to work with directly in Zimbabwe and do away with middlemen. We are under sanctions, and it’s difficult for us to import from other Western countries, but with Zimbabwe, we have a better understanding and for that, our cooperation will be helpful to both of us. We can also supply you with equipment such as tractors and implements for production. We can also supply dryers for curing and processing,” he said. 

    The proposed cooperation dovetails with Mnangagwa’s passion to economically empower Zimbabwe’s citizenry, especially women and youths, in the effort to attain upper middle-income status for the country by 2030. 

    During the meeting, Gharesheikh said Iran would prioritize women in its investments.