Author: Taco Tuinstra

Taat to Develop HNB Product with Shunho

Photo: Taat Global Alternatives
Taat Global Alternatives has signed a letter of intent with a U.S. subsidiary of Shanghai Shunho New Materials Technology Co. to undertake development work for a white-labelled heat-not-burn device as well as heatable sticks containing Taat’s proprietary tobacco-free and nicotine-free Beyond Tobacco material in all three flavors (original, smooth, and menthol).
As heat-not-burn has proven to retain users exceptionally well compared to other tobacco cigarette alternatives, Taat has identified the opportunity to build upon its existing international market share in the tobacco industry by planning an expansion into the heat-not-burn category with a tobacco-free and nicotine-free offering that would be among the first of its kind in the United States.
In addition to procuring heatable Taat sticks made using the company’s Beyond Tobacco material, Shunho’s U.S. subsidiary is to supply a proprietary heat-not-burn device on a “white-label” basis, which is to be commercialized in the United States under the Taat brand name. Uniquely, this device will offer reverse compatibility with heated tobacco sticks offered by the company’s competitors, as well as the Taat original, smooth, and menthol heatable sticks.
Headquartered in Shanghai, Shunho is a renowned tobacco ancillary service company that has worked closely with international tobacco companies. Under Shunho, there is a portfolio of firms that are currently developing next-generation electronic cigarette and vaporizing products. Taat will be the first foreign third-party with whom a Shunho subsidiary has partnered for white-label production of heat-not-burn products. Additionally, distribution services will be provided for the Taat heat-not-burn offerings through various in-house and third-party e-commerce channels in the United States.
“The reason we chose to pursue the heat-not-burn segment is because it is the most ‘sticky’ option out of all commercially available alternatives to cigarettes,” said Taat CEO Setti Coscarella in a statement. “The tobacco industry has invested heavily in cultivating a user base for heat-not-burn to the point that it may even replace major brands of tobacco cigarettes altogether in certain markets.
“We are excited to be leveraging innovative technologies to create a unique nicotine-free and tobacco-free experience using heat-not-burn for consumers who currently use and prefer this method. Because the Taat heat-not-burn device will work with Taat sticks as well as certain competitors’ heatable tobacco sticks, we believe this strategy authentically embodies our values as a company by providing consumers the choice and flexibility they deserve to have.”
February 21, 2022
EU Parliament Endorses Harm Reduction

Photo: VanderWolf Images
The EU Parliament has adopted, by a margin of 652 votes to 15, a report on Cancer prevention and Treatment that recognizes the potential contribution of vapor products to smoking cessation. The report notes that “electronic cigarettes could allow some smokers to progressively quit smoking.”
In adopting the report, the EU Parliament has become the world’s first elected chamber to endorse tobacco harm reduction, according to the Independent European Vape Association (IEVA).
“This is a landmark declaration by the European Parliament, which should go a long way to reassuring smokers of the health benefits that a switch to vaping can bring,” said IEVA President Dustin Dahlmann in a statement. “We now encourage the other EU institutions—and in particular, the European Commission—to take this on board and ensure that policy follows science, not the other way around.”
In addition to measures to reduce cancer incidence, the committee’s report places a special focus on the serious health effects of smoking.
The report also stresses the need for further research on vaping to be viewed in relative terms, given that tobacco smoking kills and vaping does not.
The final text of the report also includes a mention of further assessment of flavors “particularly attractive to minors and non-smokers” and a possible ban on them in the context of the review of the Tobacco Products Directive.
The IEVA says its crucial to avoid a flavor ban because the variety of flavors is one of the top reasons for adult smokers to switch to e-cigarettes and for vapers not to return to smoking.
“Research into the impact of flavor bans shows that many vapers return to smoking as a result [of a ban],” said Dahlmann. “This must be prevented. We agree that steps must be taken to curtail inappropriate marketing, while recognizing the crucial role flavors play in helping smokers quit.”

February 18, 2022
USTC Plans Bankruptcy Exit

Photo: USTC
U.S. Tobacco Cooperative (USTC) has begun planning an exit from Chapter 11 bankruptcy later this summer. The cooperative originally filed for protection in July 2021 to meet contractual obligations to its member growers while the company faced uncertainty presented by an ongoing class-action lawsuit.
Oscar House
“On February 2, after 17 years of litigation, we were able to reach economic terms of a settlement with the Lewis Class,” said USTC CEO Oscar J. House. “As we await final approval from the court this summer, we are beginning to prepare our exit from bankruptcy and continue providing the exceptional service and quality products our organization is known for across the globe.”
USTC originally filed for protection in federal bankruptcy court to satisfy obligations to its 550-plus member-growers, 200-plus employees, suppliers and customers. The settlement and plan of reorganization will allow the cooperative to honor its commitments worldwide and emerge from bankruptcy well positioned to serve its member-growers. Details of the agreement will be provided in the ordinary course of obtaining formal court approval of the settlement and USTC’s plan of reorganization.
“USTC is healthy and set for a sustainable, successful future,” continued House. “Throughout the bankruptcy process we have fulfilled all obligations to all stakeholders: our customers, grower-members, vendors and employees. Going forward we will continue to do so, stronger than ever.”
February 17, 2022
Voedsel To Set Up Leaf-Processing Plant

Photo: Taco Tuinstra
Voedsel Tobacco International will set up a $6 million leaf-processing plant in Rusape, Zimbabwe, this year, reports Bulls n Bears.
“We have purchased the material to set up a tobacco-processing plant for the value addition of tobacco,” said Voedsel’s commercial director, Tennyson Hwandi.
“This process involves beneficiating the tobacco from its state into a semi-finished product. It also means that there is going to be more earnings for the farmers as we grow the value chain. As an indigenous company, we are proud to have achieved this as this creates new jobs.”
Hwandi said the plant is expected to start operations this year.
Voedsel’s investment is in line with the government’s Tobacco Transformation Plan, which aims to grow the Zimbabwean tobacco industry to $5 billion by 2023 by increasing the level of value-added tobacco to 30 percent from the current 2 percent.
February 17, 2022
Trade Group: Flavor Ban Study is Misleading

Photo: kurgu128
The conclusion from a recent study that flavor ban-induced sales declines also reduce youth vaping is unwarranted, according to the Canadian Vaping Association (CVA).
A recent CDC Foundation analysis examining the change in vape product sales in Massachusetts, New York, Rhode Island and Washington after flavor bans found that statewide restrictions on nontobacco-flavored sales were associated with reductions of 25.01 percent to 31.26 percent in total unit sales compared with total sales in states without restrictions.
However, the “hasty” conclusion that the reduction in total sales has also reduced youth vaping prevalence does not hold up, according to the CVA, because the authors were unable to assess the age of purchasers.
Darryl Tempest
According to the CVA, the most common way for youth to access vaping products is through social sourcing. “Even if the age of the purchasers could be verified, a reduction in youth vaping could only be determined through additional studies,” the CVA wrote in press note.
“The problem with taking a micro view to regulation and forming policy based on individual studies is [that] the bigger picture is neglected,” said Darryl Tempest, government relations council to the CVA Board. “If we take this study at face value and assume the conclusion is accurate and less youth are vaping, on the surface it seems like this type of regulation is logical. Yet, we know from reviewing the full scope of evidence that flavor restrictions result in smoking-related illness and death.”
February 17, 2022
‘Dalligate’ Aide Dies

Photo: Bits and Splits
Silvio Zammit, a key figure in the “Dalligate” snus bribery scandal, died at age 57, reports Malta Independent.
A Maltese businessman and political canvasser for former EU Health Commissioner John Dalli, Zammit allegedly tried to solicit a €60 million ($68.20 million) bribe from Swedish Match in exchange for using his influence to lift the EU ban on selling snus.
Swedish Match rejected the offer as improper and reported it to the European Commission.
The European Commission forced Dalli to quit in 2012 after the EU’s anti-fraud office uncovered the bribery attempt. Zammit was charged in December 2012 for trading influence and complicity in the request.
The case against Dalli continues. On Feb. 9, 2022, he appeared in a Maltese court charged with bribery and trading influence, according to Euractiv.
Dalli has repeatedly said that he was framed, set up by the tobacco lobby to delay his draft anti-smoking legislation.
A Maltese investigative journalist, Daphne Caruana, who made various allegations against Dalli in her blog “Running Commentary,” was murdered in October 2017.
February 17, 2022
Zimbabwe Licenses Buyers for 2022 Season

Photo: Taco Tuinstra
Zimbabwe’s Tobacco Industry and Marketing Board (TIMB) has licensed 33 buyers and 31 contractors for the 2022 tobacco marketing season, reports The Herald.
TIMB statistics indicate that 122,769 growers have registered for the 2022 growing season compared with 145,625 last year.
According to Tobacco Association of Zimbabwe President George Seremwe, most farmers with an irrigated crop have finished reaping, and some have started grading their leaf.
“The dry land tobacco was planted a bit late, so most of the farmers are on their first reaping,” he added. “Most of the small-scale tobacco farmers grow dry land tobacco, which is still in the field.”
The Zimbabwe Tobacco Association expects good yield despite adverse weather during the growing season. “The crop has grown out well and clean in many areas and naturally in areas that received large amounts of rain,” said ZTA Chief Executive Rodney Ambrose.
Ambrose did, however, express concern over electricity supply. “Extensive load shedding coupled with faults has seen growers go days and weeks without power,” he said.
During the 2022 tobacco marketing season, growers will retain 75 percent of their earnings in hard currency, up from 60 percent last season.
February 17, 2022
BAT Appoints Chief Medical Officer
Senthil Vel
BAT has appointed Senthil Vel as its new chief medical officer.
Vel will play a central role in the research and development programs that support the company’s commitment to reducing the health impact of its business by offering consumers a range of alternative reduced risk tobacco and nicotine products.
Based at the BAT’s research & development hub in Southampton, Vel will be responsible for overall medical governance, ensuring robust medical processes and best practice are applied to all aspects of BAT’s work. He will help deliver robust evidence-generation programs designed to provide further scientific evidence that supports BAT’s new categories products.
“Sen is a highly experienced, much admired physician, with a proven track record of positively impacting national and global health policy, making him a natural addition to our leadership team,” said David O’Reilly, director, scientific research at BAT, in a statement.
Vel has more than two decades of international medical, pharmaceutical and device experience. Most recently, he served as chief medical officer of Bio Products Laboratory. He has led large medical teams across EMEA, APAC, and the US, working for large and mid-sized pharmaceutical and medical device companies, including Boston Scientific and Novo Nordisk, in clinical research, regulatory, safety, and medical affairs.
His experience includes designing non-clinical and clinical strategies to meet the regulatory requirements of the U.S. Food and Drug Administration, the European Medicines Agency, the U.K. Medical and Healthcare Products Regulatory Agency, and other major agencies worldwide. He has extensive experience in non-clinical and Phase I to Phase IV clinical studies including health outcomes programs for pharmaceuticals and devices. He is a Fellow of the Faculty of Pharmaceutical Physicians, the medical body for advancing the science and practice of pharmaceutical medicine for the benefit of the public.
Vel qualified in medicine and trained in surgery under the Royal College of Surgeons of England and holds specialist registration in pharmaceutical medicine. He holds an MBA from Cranfield School of Management.
February 17, 2022
Graphic Health Warnings Postponed Again

Image: FDA
The U.S. Food and Drug Administration has postponed the effective date of its “Required Warnings for Cigarette Packages and Advertisements” final rule to April 9, 2023, following a Feb. 10, 2022, ruling by the U.S. District Court for the Eastern District of Texas.
The move marks at least the fifth delay for graphic warning health warnings in the United States when counting previously set launch dates of June 18, 2021, Oct. 16, 2021, Jan. 14, 2022, April 14, 2022, and July 13, 2022.
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 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.
This is the FDA’s second attempt to enact graphic health warnings under the 2009 Family Smoking Prevention and Tobacco Control Act. The first rule was struck down by the federal court in the District of Columbia as a violation of the First Amendment.
Pursuant to the Feb. 10, 2022, court order, any obligation to comply with a deadline tied to the effective date is similarly postponed. The FDA encourages entities to submit cigarette plans as soon as possible, and in any event by June 10, 2022.
February 16, 2022
Kaival Brands Reports ‘Challenging’ Year
Niraj Patel (Photo: Kaival Brands
Kaival Brands reported revenues of approximately $58.8 million in the fiscal year that ended on Oct. 31, 2021. The company’s performance was worse than 2020, primarily due to the U.S. Food and Drug Administration’s marketing denial orders, which prevented Kaival Brands from marketing the nontobacco flavored Bidi Sticks in the United States toward the end of fiscal year 2021.
In addition, the company faced increased competition, which it attributes to the lack of enforcement by federal and state authorities against subpar and low-priced vaping products that continued to enter the market illegally without FDA authorization.
Net loss for fiscal year 2021 was approximately $9 million compared to net income of approximately $3.8 million for fiscal year 2020. The decrease in net income year-over-year was largely due to the decrease in revenues and the increase in operating expenses.
“Fiscal year 2021 was a very challenging year, especially because of FDA’s marketing denial order, or MDO, for Bidi Vapor’s nontobacco flavored Bidi Stick ENDS [electronic nicotine-delivery system], which caused irreparable harm to both Bidi Vapor and Kaival Brands,” said Kaival Brands’ CEO Niraj Patel in a statement.
“However, we were pleased that the court ultimately agreed to stay the MDO and that we were able to make key strategic decisions to stay in business and continue maturation of the company in 2021, including uplisting to Nasdaq and completing our first underwritten public offering.”

February 16, 2022