Category: Also in TR

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  • Filling the Gaps

    Filling the Gaps

    Image: boldg

    As it seeks to reduce its reliance on tobacco, Zimbabwe is investing in cannabis research.

    By Daisy Jeremani

    In a bid to bridge the knowledge gap in Zimbabwe’s burgeoning cannabis industry, the Zimbabwe Industrial Hemp Trust (ZIHT) has identified 63 medical doctors for training to equip them with skills to conduct medical and clinical research on cannabis.

    They are in a flexible 12-month online program that was designed in Australia by the International College of Cannabinoid Medicine. Students can study at their own pace but are expected to finish the course within 12 months.

    Nesisa Ncube, a junior resident medical officer at Mpilo Central Hospital in Bulawayo, Zimbabwe’s second biggest city, views her selection to participate in the course as an honor and an opportunity to learn more about the new medicinal cannabis sector.

    She hailed the training as “insightful” as it delves, among other modules, into pharmacokinetics of medicinal cannabis and also what to consider when planning to prescribe medicinal cannabis to a patient.

    “It has been interesting to learn how some conditions which don’t have clear and effective treatments are now being treated with medicinal cannabis, and there have been some good outcomes,” she said in an interview with Tobacco Reporter.

    The southern African nation, which is also the continent’s biggest tobacco producer, has been working to diversify that sector amid the intensifying campaign against the golden leaf over environmental and health concerns. Zimbabwe identified cannabis production as among the possible pathways to diversification.

    In April 2018, it became Africa’s second country (after Lesotho) to issue licenses for production of cannabis for medicinal and scientific use. Thereafter, the government created a licensing and enforcement desk to administer the relevant statutory instrument on behalf of the health ministry. The desk’s mandate covers applications for licenses of sites, applications for renewal, variation or amendment of licenses for sites or persons, the production, handling, import and exportation of controlled substances and all compliance issues relating to controlled substances.

    Locally produced cannabis is largely for export purposes only, with domestic use restricted to research and development purposes.

    In its 2022 annual report, The Medicines Control Authority of Zimbabwe (MCAZ) says that it has issued 59 licenses for production of cannabis for medicinal and scientific use. Fifty-eight licenses were active with 56 of them being for cultivation and production and two for cultivation and research.

    Last year,, the MCAZ received two applications for production of hemp-based cannabidiol products as complementary medicines. It issued one of the applicants with a pharmaceutical manufacturer’s license restricted to complementary medicines manufacture.

    Among the major licensees is Swiss Bioceuticals, which launched a $27 million medicinal cannabis farm just outside Harare in May 2022.

    ZIHT CEO Zorodzai Maroveke said most of the ZIHT’s activities are to fill gaps and needs in the hemp industry, and one of the gaps it has identified is the lack of knowledge among local medical health professionals. It is against this background that the ZIHT has facilitated the year-long training program.

    “It is the study of a very huge biological system called the endocannabinoid system,” she said.

    The local medicinal cannabis industry has not developed as fast as expected since the first license was issued five years ago due to what Maroveke describes as tight compliance requirements by the regulator and failure to comply by most players. The enormity of resources required for entry is the biggest hurdle, she observed.

    ZIHT is worried over these challenges, which are frustrating more effective participation into this specialized area by local investors.

    “The industry remains capital-intensive, the market dynamics present a market access challenge, [and] lack of localized expertise have all affected the participation of local investors,” said Maroveke.

    Although ZIHT’s primary area of interest is industrial hemp, she said, their support for medicinal cannabis is because there was no active representation of the sector by its major stakeholders.

    Ncube is optimistic that the training she is undergoing will advance her career as it covers an area that is not yet part of the curriculum at local medical schools. The increase in the number of health professionals who are conversant with this novel treatment system, she observed, will add diversity to the medical fraternity.

    “The training will help advance my career by educating me on the mechanisms of action and prescribing considerations for medicinal cannabis, which is not really a subject that was covered in med school, and this will benefit the medicinal cannabis sector because this increases the number of health professionals who have knowledge on the subject, which enables expansion of the sector into other countries like mine,” Ncube said.

    “I see expansion of the industry with distribution centers all over the world with safe prescription and monitoring of patients by properly trained health care professionals on the subject.”

    Zimbabwe is battling an increase in psychiatric cases due to abuse of various illicit substances, cannabis included. Up to 80 percent of all admissions to Ingutsheni Psychiatric Hospital in Bulawayo are due to drug and substance abuse, including marijuana, officials say.

    Percy Mukwacha, who is also training in psychiatry at the University of Zimbabwe and is also undergoing training under the ZIHT scheme, said he was mostly impressed by the potential of cannabinoid not only to treat a number of illnesses but to also ease the burden on local healthcare.

    “In mental health, we get a lot of morbidity from cannabis use. That’s what interested me to join this training where cannabis can have positive effects on the society,” he told Tobacco Reporter.

    “I guess an understanding of this ubiquitous substance with problematic consequences has to be helpful in my career.”

    Treatments derived from cannabis, said Admire Machongwe, a medical doctor in private practice in Harare, have potential to revolutionize patient care in the country.

    “We were notified of the scholarship but were already intrigued by the way cannabinoid medicines were being used to treat chronic pain and other ailments,” he said.

    “It [training] will be quite beneficial,” he added. “We expect cannabinoid medicines to be licensed in Zimbabwe in the near future. Treatment of otherwise difficult-to-treat conditions like chronic pain and depression might be achievable.”

  • A Shot in the Arm

    A Shot in the Arm

    CME explores opportunities in packaging solutions for midsize and small tobacco companies and in areas like format changes, spare parts and mechanical and electrical upgrades with larger tobacco players. | Photo: CME Automation Systems

    Boosted by a significant private equity investment, CME Automation Systems is strengthening its offerings to the tobacco industry and other sectors.

    By George Gay

    Paul Knight

    In October, Tobacco Reporter had the opportunity of speaking with Paul Knight, the CEO of CME Automation Systems, which, two months earlier, following the receipt of what it described as “significant backing from private equity,” had announced in a press note that it would be looking to invest in strengthening its offering to its international customers in the pharmaceuticals, cannabis, tobacco and other fast-moving consumer goods (FMCG) sectors. Following are excerpts from our conversation.

    Tobacco Reporter: Is there overlap as far as you are concerned in the concepts underlying the technologies and performances of the machines used by the pharmaceuticals, cannabis, tobacco and other FMCG sectors, if not in the machines themselves?

    Paul Knight: The overlap is in some of the underpinning technology, not in the specific machine platforms. Some of the technology overlap is in our concepts for product handling, filling and packing. Our passion is for helping drive industries forward by improving production optimization.

    Will the investments specifically in tobacco machinery technologies form a significant part of the overall investment?

    We will definitely be expanding our offerings to the tobacco sector as part of our investment program, much of which will be around life extension and aftermarket support products.

    Does this mean that you have confidence in the longevity of the tobacco industry? Or do you think that with the right developments CME can increase its share of a decreasing market for tobacco packaging equipment?

    Yes, we do have confidence in the longevity of the tobacco industry, and we have confidence in our ability to increase our share of the marketplace with our new investments in mind.

    When you talk of the FMCG sector, do you include vaping products, or do they comprise a sector that you do not serve or intend to serve?

    Yes, we do work in both vaping and heat-not-burn sectors and anticipate strong growth as consumers move in bigger numbers toward these products from combustibles.

    Where will the overall investment be targeted mainly—at taking on more engineers, perhaps, obtaining new design tools, or investing in artificial intelligence (AI)?

    The investment is being targeted in several areas, particularly marketing, sales channels, new product development and existing product enhancement.

    In what areas, if any, does AI play a part in your overall operations or will play a part in the future?

    AI is starting to make an impact in the administrative areas of our business, and over the next several years, we will see it start to make its way onto machine platforms for predictive maintenance and self-diagnosis.

    Will you be investing in new facilities, perhaps outside the U.K., given the challenges thrown up by Brexit?

    Yes, we will be looking to move elsewhere within the U.K. over the next one [year] to two years. But in all honesty, Brexit has not been an issue for CME outside of customs-related administrative changes.

    Is this a brave time for an international player to be looking to expand, what with the various challenges facing manufacturing, including raw materials supply chain difficulties, inflation and rumblings about the demise of globalization?

    Yes, it is; there are many risks in the macroeconomic and global political environment, but we believe counter cyclic investment is a good play for CME at our current stage of development.

    In the August press note, CME said the new investor had identified “the potential to build on CME’s expertise and reputation for innovation, especially given the company’s recent success in developing new solutions for growth markets such as cannabis and clinical trials.” Could you describe briefly what form these successes took?

    For clinical trials, we have developed a system called PACE, which is designed to automate clinical trial provisioning for multinational pharma companies. Our first customer is a consortium including Astra Zeneca and GSK. This is a huge opportunity for CME’s future. In the cannabis market, we now have our widest product portfolio and plans to put a footprint in North America.

    Would you describe CME as a medium-sized player in the tobacco packaging field?

    Yes.

    How else would you describe CME?

    CME is a business that is passionate about innovation, solving problems for our customers and markets, adding value to their businesses and ensuring their future success. 

    The press note mentions bespoke machinery. Do you regard this as one of your main strengths in the tobacco packaging field?

    Bespoke machinery design and build is a strength of CME’s, but we do relatively little of this in the tobacco packaging sector.

    What are your other strengths in this field?

    A broad range of high-quality standard and flexible machinery products that cover the range of needs from small independent producers to multinationals up to 400 packs per minute.

    Do you see change coming in the environment in which tobacco packaging machinery companies compete?

    Change in our sector is already well underway! I think in terms of new packaging machinery, demand is moving toward higher speed equipment, particularly in the multinationals. We are not in the high-speed segment, so this leaves us to explore lower speed packaging in mid-size and small tobacco companies globally and in areas like format changes, spare parts and mechanical and electrical upgrades with larger tobacco players. There is also clearly a geographical demand shift away from developed economies to developing economies for combustible tobacco products and a shift toward vape/HEBB-style products in developed economies.

    The press note does not mention who is providing the investment funding. Is there a reason for this?

    The funder wishes to remain anonymous.

    The press note does not mention the level of the funding either. Are you able to provide a rough figure?

    It is a seven-figure number.

    Is there anything else you would like to say about the new investment funding and how it will affect CME’s future?

    The investment represents a new dawn for CME and our ability to focus significant investment capital on our target markets via new product development and product enhancement. We could not be more excited to have a committed investor that believes in our ability to grow into the future.

    George Gay is Tobacco Reporter’s European editor, but his territory spans the globe. Based in London, George has covered the tobacco industry since 1982, initially for a U.K.-based publication and since 2004 for Tobacco Reporter. George’s understanding of industry issues, combined with his keen sense of observation and dry wit, have earned him a loyal following among Tobacco Reporter’s readers.
  • Shifting Sands

    Shifting Sands

    Image: Givaga

    Under pressure from the IMF, Egypt’s government reduces its share in Eastern Co.

    By Stefanie Rossel

    On Oct. 29, 2023, Egypt’s House of Representatives approved a long-expected tax hike on tobacco products. The amendment to the 2016 VAT law will expand the price ranges of taxed cigarettes by raising the minimum and maximum limits of each segment by 12 percent annually for five years. In addition, the draft law will increase the fixed tax by EGP0.50 ($0.02) on the three segments of cigarette prices, resulting in EGP4.5 for cigarettes retailing at less than EGP31, EGP7 for the mid-price cigarette range (those costing between GDP31 and GBP45) and EGP7.5 for cigarettes priced above EGP45.

    The bill also increases the tax on tobacco products by 75 percent, raising the minimum from the present EGP30 to EGP60 per kilogram. Imported and local molasses products will see a 25 percent tax hike whereas the tax on heated-tobacco products will rise from EGP1,400 per kilogram to EGP1,800 per kilogram. Under the new law, e-liquids will be taxed at EGP4 per milliliter instead of the current EGP2 per milliliter.

    The amendment will allow cigarette manufacturers, who have been facing increasing production costs and a plummeting Egyptian pound, to adjust prices without moving into higher tax brackets. The tax hike is expected to generate up to EGP8 billion annually in additional revenues for the state budget.

    According to the head of the House’s Planning and Budget Committee, the move is also designed to encourage tobacco companies to increase production in a way that will stem the rise in cigarette prices, thus putting an end to the country’s cigarette crisis. Since May, the Egyptian cigarette market has been in turmoil. According to observers, the problem emerged after the minister of finance called for an amendment to the 2023–2024 budget to increase its tax revenue from EGP81 billion to EGP87 billion. The government, however, was slow to implement the tax hike. What followed was a shortage of tobacco products, particularly cigarettes, and the rise of an informal, parallel market in which a pack of the country’s most popular brand, Cleopatra, sold at EGP50 instead of EGP24.

    As soon as they got wind of the tax increase, tobacco traders seized the opportunity to make additional profits by hoarding cigarettes. The artificial scarcity caused cigarette prices to soar, forcing smokers to buy unknown, adulterated or smuggled cigarettes, which in turn reduced tax revenues. After Egypt’s tobacco monopoly, Eastern Company, increased production by 40 percent and stepped up vigilance against illicit sales, cigarette prices decreased to EGP40 in September.

    In the short term, [the deal] is clearly positive,” says Vorster, “but the potential for more adverse excise and regulatory regimes could detract from that significantly.” 

    Pieter Vorster, managing director, Idwala Research

    Foreign Currency Crisis

    “Other than for the traders exploiting the situation, it is clearly an unfavorable environment, albeit one caused by tax increases telegraphed well ahead of their implementation, exacerbated by weak enforcement and currency shortages,” says Pieter Vorster, managing director of Idwala Research. “The tax hike helps to reduce margins in the parallel market, but stockpiling will likely continue if potential disruptions to production owing to currency shortages are viewed as possible.”

    Egypt was hit hard by Russia’s invasion of Ukraine in February 2022, which caused many foreign investors to abandon emerging markets. Consequently, the country has been struggling with rising global wheat and energy prices. According to a report by the U.S. Department of State, Egypt’s external debt reached $164.7 billion in June 2023.

    In December 2022, the International Monetary Fund (IMF) approved a 46-month $3 billion loan for Egypt to overcome its economic crisis under the condition that the government undertake several structural reforms. It insisted that Egypt adopt a flexible exchange rate, lift of import restrictions and privatize state-owned companies.

    Despite the government’s efforts to create a more favorable business environment, foreign investors continue to face challenges such as bureaucracy, lack of transparency, uneven enforcement, corruption, intellectual property issues and a shortage of skilled labor.

    Egypt’s sale of a major stake of Eastern Co. on Sept. 3, 2023, was part of its commitment to sell shares in 35 state-owned firms. Global Investment Holding (GIH) of the United Arab Emirates paid EGP19.3 billion for a 30 percent stake of the 50.9 percent stake that the state-owned firm Chemical Industries Holding Co. had previously held—a price that Vorster deems steep. “It seems a high multiple for a noncontrolling stake without the synergies that a tobacco company might have been able to extract,” he says. According to Daily News Egypt, both Japan Tobacco International and United Tobacco Co., in which Philip Morris International controls most shares, also submitted offers for a stake in Eastern Co.

    Following the deal, 20.9 percent of Eastern Co. remains with Chemical Industries Holding Co., 35 percent is freely traded on the Egyptian Stock Exchange, and the remaining 15 percent is owned by various private stakeholders. GIH announced that it would invest $150 million to rejuvenate Eastern Co.’s raw material supplies. Whether it will be allowed to use its funds to import tobacco, however, remains unclear. Egypt prohibits tobacco cultivation and taxes leaf imports at 75 percent. According to Mada, an Egyptian media organization, the Emirati firm will work with banks to facilitate Eastern Co.’s access to foreign currency for imports. “In the short term, [the deal] is clearly positive,” says Vorster, “but the potential for more adverse excise and regulatory regimes could detract from that significantly.” 

    A Growing Market

    The deal might still prove to be a win-win for both parties. Egypt is in dire need of U.S. dollars to pay for imports. Eastern Co. accounts for 70 percent of tobacco sales in Egypt, which is one of the world’s few remaining growth markets for cigarettes. Statista anticipates the market to generate $6.3 billion in 2023 and projects it to enjoy an annual growth rate of 9.65 percent by 2028. According to Alternative Policy Solutions, a public policy research project at the American University in Cairo, around 18 million Egyptians over the age of 15 are smokers. Overall cigarette consumption increased 7 percent in 2022. Smoking is a male habit: The World Health Organization projects that by 2025, 63 percent of the country’s male population will be smokers, up from presently 41.8 percent. Only 0.3 percent of women currently smoke.

    According to Forbes Middle East, Eastern Co. is worth $1.2 billion. The company reported a net profit of EGP5.29 billion in the first nine months of fiscal year 2022–2023– 24 percent higher than in the comparable prior-year period. Its revenues rose to EGP14.6 billion from July 2022 to March 2023 compared to EGP12.78 billion in the comparative period of the previous fiscal year. The company supplied 88 billion cigarettes to the Egyptian market in 2022–2023.

    With the acquisition of its stake in Eastern Co., GIH will have effectively established control over 40 percent of the Egyptian tobacco market as the investment firm’s founders also hold shares in UTC, according to Mada. How their acquisition will impact on the overall market remains to be seen. Citing Turkiye as an example, Vorster points out that there are several examples where the excise tax and regulatory environments became significantly less favorable when the state exited former monopolies. “It also seems plausible that the market could become significantly more competitive with PMI now manufacturing themselves, and others potentially following in future,” he says.

    PMI Starts Local Production

    In its domestic market, Eastern Co. is rivaled by only JTI and UTC. BAT exited the Egyptian market last year, claiming a lack of economic viability. Its withdrawal came shortly after PMI in April 2022 had reached a licensing agreement with Eastern Co. to manufacture cigarettes in Egypt. More than a year earlier, Egypt’s Industrial Development Authority had invited companies to bid to become the country’s second tobacco company. However, the agency was forced to relaunch the tender after bidders complained that its conditions gave unjust advantages to Eastern Co. In the renewed tender, UTC was the only company to bid. Under the agreement, Eastern Co. acquired a 24 percent stake in UTC.

    Although meant as a first step toward privatization of the tobacco monopoly, the agreement stipulates that UTC manufactures only products owned by PMI, thus protecting Eastern Co.’s market share by preventing the newcomer from producing cigarettes in the same price category as Eastern Co.’s bestseller, Cleopatra.

    In September 2022, UTC started producing cigarettes at the manufacturing site of its predecessor Philip Morris Misr, the licensee for PMI products in Egypt established in 2013. PMI’s flagship brand Marlboro has been manufactured by Eastern Co. since 1985. Following the agreement, PMI products in Egypt are marketed under the label “Made by UTC.”

    UTC also has permission to manufacture e-cigarettes. In April 2022, Egypt legalized the import and commercialization of vape products. Statista estimates that the revenue generated in the country’s e-cigarette market will reach $400 million in 2023.

    The recent sale of the stake in Eastern Co. could also pave the way for more ambitious tobacco harm reduction in Egypt. To date, Eastern Co.’s portfolio has offered only high-risk products, such as cigarettes, shisha and cigars. Vorster is less optimistic. “In theory, it is slightly positive, but with cigarette prices below $2 per pack, it is hard to see reduced-risk products gaining significant traction,” he says.  

    Stefanie Rossel is Tobacco Reporter’s editorial contributor. An experienced trade journalist, she combines sharp reporting skills with in-depth knowledge of the tobacco and vapor industries. Prior to joining Tobacco Reporter, Stefanie was editor-in-chief at Tobacco Journal International, where she worked for a decade. Fluent in English, German and French, Stefanie covers tobacco news around the world. She is based in Germany.
  • Taming the Cowboys

    Taming the Cowboys

    Image: JEANNE

    Altria has declared war on the illicit disposable devices that are impacting its bottom line.

    By Timothy S. Donahue

    The illicit e-cigarette market is soaring. Illicit products are estimated to account for more than 60 percent of the $8.3 billion U.S. vaping industry. Statista expects the U.S. electronic nicotine-delivery system (ENDS) market to grow at a compound annual growth rate of 3.93 percent from 2023 to 2028. If the illicit market continues to go unchecked, however, companies that market legal vaping products fear many consumers will simply switch back to combustible products.

    “It is very much worth noting that this rapid apparent substitution is happening in an environment where half the vapor market is illicit; the FDA [U.S Food and Drug Administration] has hugely hampered vaping products making it onto the legal market, and consumers are hugely misled on relative risks,” said David Sweanor, an adjunct law professor at the University of Ottawa and a longtime tobacco harm reduction advocate. “As with other markets seeing similarly historic drops in cigarette use as alternative sales soar, it raises the question of just how rapidly cigarette sales could fall if policies were aimed at facilitating that rather than doing things to stymie it.”

    Altria, parent to Njoy, a leading brand of legal vaping products in the U.S., according to Nielsen, told investors during a recent conference call that the current state of the market is “intolerable” for both legitimate manufacturers and consumers. Altria CEO Billy Gifford said the regulated market is being overrun by illegal flavored disposable products manufactured and distributed by companies violating the rules and guidance laid out by the FDA. He said that regulation not enforced is indistinguishable from no regulation at all.

    “Illegal e-vapor products circumvent the actions of regulators, responsible manufacturers and retailers by evading scientific review, quality manufacturing controls, marketing oversight and legal aids or purchase restrictions. Despite recent actions by the FDA, enforcement has been inadequate and ineffective,” explained Gifford. “We believe the FDA has good tools necessary to bring order to the market. For our part, we are actively engaged with regulators, state and federal lawmakers, and trade partners and other stakeholders to build awareness of these serious issues and drive marketplace enforcement.”

    According to Gifford, the lack of enforcement has forced Altria to take a “targeted but necessary action.” The company filed a lawsuit in the District Court for the Central District of California against 34 organizations. Njoy alleges that the defendants are manufacturing, marketing, distributing, selling and/or marketing their flavored disposable ENDS unlawfully for three primary reasons:

    • They are not authorized pursuant to FDA marketing granted orders as part of the premarket tobacco product application process.
    • California bans the retail sale of flavored ENDS.
    • The defendants do not comply with the Prevent All Cigarette Trafficking Act’s delivery sale age verification, registration and filing, record keeping, tax payment and labeling requirements.

    Altria is asking for the court to provide appropriate restitution for harm suffered by Njoy due to the defendants’ unfair competition.

    “We want to protect harm reduction and the opportunity for the 30 million smokers in the U.S.,” said Gifford. “We really need to have enforcement where the smokers can make informed choices as they are moving across categories. I think that there’s an underlying positive is that we see adult smokers moving over, so they’re ready to have potentially reduced harm products. We just need them to be regulated and based on science to be in the marketplace.”

    Sal Mancuso, Altria’s chief financial officer, said that traditional cigarette volumes continued to decline in the third quarter of 2023. He said that the decline is impacted by the number of illegal products on the market; however, because illicit products are largely distributed through nontraditional untracked channels, the company has had to refine its ability to estimate the illicit product impacts on the legal vaping industry.

    “With the information we have today, we believe that there is more cross-category movement than previously assumed. And we now estimate that growth of illegal flavor[ed] disposable e-vapor products contributed to industry, cigarette industry declines in the range of 1.5 percent to 2.5 percent and over the last 12 months,” said Mancuso. “We will continue to monitor this dynamic trend and are actively pursuing better data sources to enhance our estimates in this space.”

    “We believe the FDA has good tools necessary to bring order to the market.”

    Billy Gifford, CEO, Altria Group

    Amplifying Actions

    Altria Group completed its acquisition of Njoy Holdings in May. In 2022, Njoy Holdings received marketing orders for its Njoy Ace device along with several tobacco-flavored pods. At the time of writing, Njoy Holdings had received six of the 23 marketing orders granted by the FDA for the entire vaping product category, including pods, disposables and open systems. The regulatory agency is still reviewing Njoy’s premarket tobacco product applications for several Njoy menthol-flavored e-vapor products.

    Gifford said that the company executed Njoy’s business plans with “speed and focus,” adding that the goal is to grow the Njoy brand responsibly and sustainably. To set the foundation for success, Altria first strengthened Njoy’s supply chain. He said the company successfully solidified the entire Njoy supply chain from sourcing direct materials through the shipment to retail.

    “As a result, we do not anticipate capacity constraints as we execute our initial expansion plan. Next, during the third quarter, our teams prioritized closing inventory gaps at retail and expanding distribution of ACE,” said Gifford. “Prior to the acquisition, Njoy had a small-scale sales force, which resulted in inventory volatility and significant distribution gaps at retail …. Upon completion of the Njoy transaction, we immediately unleashed our sales force to focus on closing the inventory gaps in stores that already had distribution. We improved inventory conditions in stores and are actively working to close remaining gaps at retail.”

    Pamala Kaufman, a financial analyst with Morgan Stanley, asked Gifford if he believed Njoy could be successful and grow in a marketplace dominated by illegal products. Gifford said that the FDA still needs to get through its authorization process, and the agency’s actions will translate to the marketplace.

    Since its acquisition by Altria, distribution grew to approximately 42,000 stores during the third quarter of 2023 for the Njoy Ace, the company’s flagship device. The product is now distributed in all the top 25 U.S. convenience store chains by vaping product volume, according to Gifford. The company has also started to amplify visibility with new point-of-sale and fixture signage at retail.

    “During the fourth quarter, we continue to expect ACE expansion to reach a total of 70,000 stores by year end, representing approximately 70 percent of e-vapor volume and 55 percent of cigarette volume sold in the U.S. multi-outlet and convenience scanner,” said Gifford. “As we continue to expand distribution and close inventory gaps, we expect to further enhance visibility and product fixture space at retail.”

    Last month, Njoy unveiled its first retail trade program. The program allows retail partners to sign up for the program at various levels with merchandising options designed to position Njoy “strategically and responsibly” to current combustible tobacco consumers while boosting the awareness of the Njoy brand. Gifford said the company is beginning to test various promotional plans and anticipates more disruptive execution at retail in the fourth quarter. Moving into 2024.

    “We will continue to refine our promotional plans, implement Njoy’s retail trade program, further expand distribution and evolve our consumer engagement strategy. Our strategies will focus on informing adult vapors and smokers of the attributes of ACE, such as battery capacity and pod size, relative to other leading brands, generating trial and growing brand loyalty,” said Gifford. “In addition, plans for a new brand equity campaign are well underway. We expect the equity campaign to further amplify the brand’s presence at retail and drive consumer engagement.”

    Jacob de Klerk, an analyst for Redburn Atlantic, asked Gifford what the impact would be on Njoy’s projected market growth if the FDA doesn’t approve any flavors other than tobacco. Would only allowing tobacco flavors create enough demand for Njoy to remain profitable? Gifford said he believes there is room, and he wouldn’t rule out the potential for an authorized menthol product.

    “I wouldn’t rule out menthol. We feel good about the application—the current application in front of the FDA from a menthol standpoint. I think if you look at some of the recent marketing denial orders, it was related to ‘new following,’” he replied. “When we made the Njoy transaction, there was virtually no new following. As far as additional flavors are concerned, we’re excited and currently looking forward to being able to file [marketing applications] in the near future. We believe that [flavor] allows for adult consumers to have it as an offramp but not an on-ramp for underage users. So, we still see the potential for flavors.”

    Timothy Donahue is the assistant editor of Tobacco Reporter. Since joining our team in January 2013, he has become not only an expert on the traditional tobacco business but also a well-respected voice in the rapidly developing vapor industry. Tim spends much of his time on the road, attending conferences and interviewing industry representatives. His networking skills, work ethic and quick mind are valuable assets to our diverse audience.
  • The Potential of Pot

    The Potential of Pot

    Photo: Konrad

    Despite regional setbacks, global cannabis sales are still getting higher.

    By Stefanie Rossel

    Global cannabis sales continue to grow, albeit at a slightly slower pace than before, facing headwinds in comparatively mature markets, such as Colorado or California. Euromonitor International expects the value of the global legal cannabis market to grow from $41 billion in 2022 to $98 billion by 2027. Despite increasing access and acceptance, the stigma around cannabis remains and regulatory uncertainty prevails.

    The main growth drivers are innovation, investments from tobacco companies and consumer perception. Cannabis caters to the needs of consumers unnerved by economic, environmental and political uncertainties along with the spread of armed conflicts. Indeed, data from Israel’s ministry of health shows a spike in demand for a medical marijuana program one month into the war with Hamas. Meanwhile, the government of Ukraine—another country at war—is preparing to legalize medical cannabis.

    Euromonitor expects noncombustible cannabis products to gain share as consumers become more concerned about their health. Further legislation of adult-use cannabis would have significant implications for other fast-moving consumer goods, according to the market intelligence providers, with innovations in cannabis involving topicals, beverages or edibles.

    Alert to opportunity, the major tobacco players have already ventured into the sector. Philip Morris International has invested in Vectura Fertin Pharma, a contract development and manufacturing organization specializing in gums, pouches, tablets and other solid oral systems for the delivery of active ingredients. According to news reports dated July 2023, PMI is also planning to take over Syqe Medical, an Israeli company, which manufactures a metered-dose inhaler for pain reduction using medical marijuana.

    BAT, for its part, has stakes in 13 cannabis startups. In April, the company entered a joint venture with Charlotte’s Web Holdings, a cannabidiol (CBD) producer based in Denver, Colorado, USA. Since 2021, it also holds a minority stake in Organigram, Canada’s second-largest licensed cannabis producer. In early November 2023, BAT boosted its interest in the company through a cad124.6 million ($90.15 million) investment. Last year, it invested $37.6 million in a leading German cannabis company called Sanity Group.

    Imperial Brands acquired a stake in Auxly in 2019, while Altria is represented in the cannabis market through Cronos of Canada.

    Despite the growth of the market, Canadian companies are struggling to profit from legal cannabis.
    (Image: JHVEPhoto)

    Successful Experiment

    Presently, two markets are of particular interest for investors in the cannabis space: Canada, which in October celebrated the fifth anniversary of legal recreational cannabis; and Germany, which was supposed to legalize cannabis in November.

    Canada’s government had committed itself to reviewing its Cannabis Act after three years, but the Covid-19 pandemic delayed that exercise. In October, the government published a summary of feedback provided by industry, healthcare and community groups. Its conclusions were sobering. Despite the growth of the market, companies across the supply chain are struggling to profit from legal cannabis. Legal producers are burdened by significant regulatory fees, distributor markups and taxes in a hyper-competitive market. The illicit market, meanwhile, still represents 40 percent of the business.

    In their rush to compete with illegal products, sellers of legal cannabis have dropped their prices dramatically, selling products for as low as cad3 per gram instead of the cad10 per gram originally envisaged by the government. Due to advertising and packaging restrictions, communication with consumers, even to inform them about different varieties of cannabis and their effects, is nearly impossible. As a result of such challenges, several first players have exited the market or reduced manpower.

    Legalization has also impacted public health: The Canadian Institute for Public Health noted that cannabis-related emergency department visits and hospitalizations increased 14 percent between 2019 and 2021. Despite its shortcomings, Deepak Anand, principal of Vancouver-based ASDA Consultancy Services, deems legalization a success. “Legalization has resulted in about a 50 percent reduction in illicit market sales,” he says, quoting a recent survey in which 48 percent of cannabis-using respondents stated that they purchased all their products at a licensed retailer.

    “Retailer availability and proximity is an important metric in increasing overall market penetration and facilitating access,” says Anand. “No one expected the illicit market to disappear on day one or year five of legalization. The fact that we are at almost 50 percent reduction says a lot about the progress made.”

    Altogether, 64 percent of Canadians supported legalization, according to the probe. The survey also showed that people aged 45 and older increased their cannabis intake the most of all age groups following legalization, whereas those under 17 reduced their consumption.

    Legalization has resulted in about a 50 percent reduction in illicit market sales.

    Deepak Anand, principal, ASDA Consultancy Services

    Lessons to be Learned

    Anand emphasizes that legalization is a process rather than an event and that the experiences of Canada show other countries what works and what doesn’t. Lessons, he says, include the importance of avoiding over-taxation and overregulation of a nascent industry, particularly when one of the goals of legalization is to transition consumption from illicit to licit channels.

    What’s more, tax earnings derived from legalization must not be used solely to fill government coffers. “Revenues must be reinvested by providing the industry with data, research and tools to support the nascent industry and transition supply from criminal and illicit channels.”

    Governments must also guard against setting the age of access too high or the THC limits too low, according to Anand. Furthermore, they should make sure that social justice reform is baked into any legalization programs.

    Anand expects the final report on Canada’s Cannabis Act, which will be tabled before Parliament in March 2024, to take into account industry suggestions on taxation and THC levels, concerns from academics about the lack of research and a call for an overhaul of the medical system.

    The Canadian cannabis market, he predicts, will see only the fittest companies surviving. “Strong business fundamentals and financial discipline will be rewarded,” says Anand. ”Companies and teams that focus on the plant and the consumer will thrive as we are seeing in the market currently. Cannabis isn’t going anywhere; it is an industry that is here and will not only stay but also thrive in the future.”

    Disappointing Move

    Meanwhile in Germany, legalization appears to have lost some of its momentum. Hopes were high when, in 2021, a new coalition government announced it would permit licensed shops to sell recreational cannabis to adults, i.e., those from the age of 18. The move would have made Germany the biggest EU cannabis market by far. With the legalization, the government aimed to starve the illegal market, decriminalize occasional users, lower criminal justice expenditures and protect public health. The expected cannabis tax, experts predicted, could contribute up to €1.8 billion ($1.92 billion) annually to the state treasury.

    Two years on, all that remains of the lofty plans is a watered-down version. After realizing that full legalization of recreational cannabis would interfere with the U.N. Single Convention on Narcotic Drugs (1961) and EU legislation, the cabinet on Aug. 16, 2023, approved a bill that would allow adults to possess up to 25 grams of the drug, grow a maximum of three plants and acquire weed as members of nonprofit cannabis clubs. The government said it would also launch a pilot project to test the effects of a commercial supply chain for recreational cannabis over five years—a proposal for which it will need to present separate legislation.

    The legislation was scheduled to pass Parliament on Nov. 16, 2023, making cannabis legal from Jan. 1, 2024. However, after meeting fierce opposition from numerous parties, among them conservative policymakers who warned that legalization would encourage cannabis use and create more work for authorities, industry associations and consumer advocacy groups, the final reading was delayed to mid-December.

    In a Nov. 6 parliamentary hearing, the German Cannabis Association (DHV) pointed out that the possession cap of 25 grams per year made home cultivation impossible, as it referred to fresh flowers, which tend to lose weight after drying. “Under these conditions, no one will take the trouble to cultivate cannabis,” says DHV Managing Director Georg Wurth. “The limit would be a promotion scheme for the black market.”

    DHV also advocates to allow private growers to cultivate more than three plants and criticizes the distance rule, which stipulates that consumption will neither be allowed in cannabis clubs nor within a 200-meter distance of schools, kindergartens, playgrounds or cannabis clubs. “Such a distance—or any obligatory distance—would mean that in populated areas there would be no space left for legal consumption,” he says. “The idea to completely prohibit consumption on the premises of clubs whose only aim is to cultivate cannabis is unrealistic and makes no sense. The envisaged distance rule for cannabis clubs is similarly absurd, as it does nothing for youth prevention.”

    Furthermore, the punishments for violations described in the proposed legislation are too harsh, according to Wurth. The bill stipulates imprisonment of up to three years for the possession of 26 grams of cannabis or the cultivation of four plants. Consumption-related offences involve high fines. Smoking pot in a 190-meter radius from a school, for example, could cost the user up to €100,000. The DHV also calls for a legal opportunity to consume self-cultivated cannabis with friends. “After all, the goal is to deprive the black market of as much consumed cannabis as possible,” Wurth says. The association also calls for equal treatment of cannabis and alcohol in road traffic and an alignment of sanctions.

    At press time, an amended version of the bill that takes into account stakeholders’ input had not been released. The first part of the planned cannabis reform in Germany is now expected to become effective on April 1, 2024, at the earliest.

    Stefanie Rossel is Tobacco Reporter’s editorial contributor. An experienced trade journalist, she combines sharp reporting skills with in-depth knowledge of the tobacco and vapor industries. Prior to joining Tobacco Reporter, Stefanie was editor-in-chief at Tobacco Journal International, where she worked for a decade. Fluent in English, German and French, Stefanie covers tobacco news around the world. She is based in Germany.
  • A Widening Gap

    A Widening Gap

    Image: WindyNight

    Tobacco harm reduction for people with mental health needs

    By Cheryl K. Olson

    “I firmly believe a lot of us, people like me, are self-medicating, pure and simple,” says Skip Murray. A Minnesota-based tobacco harm reduction specialist, Murray began smoking at age 10. She was diagnosed initially with autism and attention deficit/hyperactivity disorder (ADHD) and later with depression, anxiety and post-traumatic stress disorder (PTSD) as well. She vapes to manage her symptoms.

    Brian King, director of the U.S. Food and Drug Administration’s Center for Tobacco Products, has called for greater focus on health equity. One group he cited as disproportionately affected by smoking is people living with mental health conditions. If you’re among this crowd, you are more likely to smoke (and smoke heavily) and less likely to quit compared to the general population.

    Plenty of research details this serious disparity. Among U.S. adults scored as having serious psychological distress (SPD) in the National Health Interview Survey, nearly 40 percent smoked. That’s compared to 13 percent of people without SPD. Of all cigarettes consumed by U.S. adults, nearly one-third are smoked by someone with a mental illness.

    A new analysis of Population Assessment of Tobacco and Health survey data found that among adults ever diagnosed with psychosis, 41 percent had used any kind of tobacco in the past month, and 31 percent had smoked. Having multiple mental health conditions is linked to higher smoking rates.

    The disparity is growing. U.S. national surveys find that smoking rates for those with mental health diagnoses are either stagnant or are declining more slowly compared to the general population. In particular, smoking rates for black and Hispanic adults experiencing serious psychological distress have not budged in years.

    What stands in the way? How can we better support tobacco harm reduction for people with mental health needs and persuade mental health professionals to take smoking seriously?

    A Culture of Smoking

    Historically, mental health care systems tolerated or even encouraged a smoking culture. Smoking breaks helped build relationships between patients and providers. Cigarettes were used as rewards for “good” behavior or for complying with treatment.  

    Studies find that mental health professionals frequently believe that their patients who smoke aren’t interested in quitting. Or that giving up cigarettes is too much to take on when also dealing with mental illness. Many therapists view smoking as not part of their turf but belonging to the physical health side of things.

    Amid the stresses and crises of mental health practice, granting lower priority to smoking cessation may seem practical. But ignoring cigarettes costs their patients years, even decades, of life. A recent editorial in the British Journal of General Practice called smoking the single biggest contributor to the seven-year to 25-year reduced life expectancy for people with mental health conditions.

    “To ignore their smoking, and only focus on their mental health, in the long run harms their overall health,” says Murray. “Why aren’t we looking at why they smoke? Do they not have healthcare, a home, enough food?”

    “I’m more than my mental illness,” she continues. “We need to treat the whole person.”

    Another barrier to encouraging smoking cessation has been lack of research on, and provider knowledge about, effective interventions. People with schizophrenia are at highest risk for earlier death, and their rates of smoking are especially high. Randomized trials suggest that smoking cessation medications are not risky for them to use. The issue is not safety but effectiveness.

    For example, a large Canadian community-based smoking cessation study found that many people with schizophrenia who smoke want to stop. They were as able as others to reduce their smoking but much less successful at quitting altogether.

    For people living with mental health conditions, as with the general population of people who smoke, there is an urgent need for more effective cessation approaches. A 2002 commentary titled “Smokers with Schizophrenia Will Benefit From More Flexible Treatment Approaches” put it this way: “New and creative NRTs [nicotine-replacement therapies] and pharmacological and psychosocial interventions are needed to compete with the high reinforcement value of smoking.”

    Today, we have nicotine alternatives undreamed of in 2002, including e-cigarettes.

    A Role for Vaping?

    In a 2017 review on Smoking, Mental Illness and Public Health, Stanford researchers wrote that “Additional data are needed to more fully understand the long-term potential of [e-cigarettes] for harm/harm reduction, particularly in vulnerable groups of smokers, including those with mental illness.”

    Six years later, many in public health are unfortunately still on the fence about whether vaping causes or reduces harm. We now have high-certainty evidence from a respected Cochrane review of research that vaping works better than NRT to help people quit smoking.

    But what evidence do we have for persons with mental illness in particular? The studies summarized in the Cochrane review either didn’t mention mental health or specifically excluded people with conditions such as depression, anxiety and psychosis from participating.

    More often than not, even the newest studies on helping people with mental illness quit smoking ignore the existence of vaping and other non-NRT nicotine options. However, evidence from recent population surveys that give results for people with mental health conditions suggests that vaping merits a closer look.

    A 2023 report analyzed data on people reporting depression and anxiety from the 2018 and 2020 Four Country Smoking and Vaping Surveys. The authors state, “It appears that smokers with depression are motivated to quit smoking but were less likely to manage to stay quit and more likely to be vaping if successfully quit.”

    A 2020 English population survey report by Brose and colleagues found that smokers with mental health problems were just as likely as others to successfully quit smoking if they tried. People who had ever had a mental health diagnosis were nearly four times more likely to choose vaping over nonprescription NRT (37 percent versus 9.8 percent) when making quit attempts—more than the sample overall. The authors suggest that “e-cigarettes used in quit attempts currently are more likely to positively affect inequalities than other smoking cessation interventions,” especially if their reach among people with mental health problems can be increased.

    Wanted: Better Studies

    Caponnetto and Polosa have summarized the results of some small but promising studies, involving first-generation or second-generation e-cigarettes, to help people with schizophrenia spectrum disorders stop smoking. Vaping showed potential as an acceptable substitute even among people with severe mental illness who don’t intend to quit smoking. Are larger studies in the research pipeline?

    A 2021 research letter in JAMA Psychiatry describes registered clinical trials looking at e-cigarettes to reduce or stop smoking. Just eight of the 66 ongoing or completed trials recruited individuals who smoke who have a psychiatric condition. The authors note that very few studies (and no completed ones) tested “newer e-cigarette devices that are designed to deliver nicotine more similarly to cigarettes.” They call for more, higher quality studies. We’ll keep an eye out.

    Ways to encourage harm reduction after inpatient mental health treatment also need more study. A 2023 U.K. study by Shoesmith and colleagues in Nicotine & Tobacco Research describes the development of a complex behavior change intervention to follow discharge from a smoke-free mental health stay. You have to dig into the supplemental material to find that mental healthcare worker training in use of e-cigarettes is part of the recommended intervention.

    We need more research to better understand what may block or encourage people with mental health conditions from trying and switching to vaping. A 2017 study analyzed discussions on Reddit by people with mental illness about motivations and limitations associated with vaping. Self-medication was a common theme.

    One person who reported PTSD and anxiety wrote, “For me, vaping is pretty much the same as smoking, in terms of how it helps me calm down and handle stress.”

    Many wrote on Reddit about the importance of education about and support for vaping from friends, family and online communities. Informed mental health professionals could likely play a critical role in saving lives. A U.K. study found that among people who have used tobacco, those with serious mental distress are more likely to have inaccurate harm perceptions of nicotine and nicotine products, including vaping.

    “A Clear and Definite Message”

    A U.K. government-funded community interest company, the National Centre for Smoking Cessation and Training, just released a much-needed guide to vaping for health and social care professionals. The guide states that “some people from disadvantaged groups may vape for temporary abstinence (e.g., at work or while in a mental health inpatient setting) before deciding to switch completely.” Also, “it is important that people from disadvantaged groups receive a clear and definite message that vaping is much less harmful than smoking.”

    Some mental health professional associations have endorsed vaping, however grudgingly or conditionally. For example, the Royal Australian and New Zealand College of Psychiatrists issued a sensible e-cigarette position statement in 2018 (due for updating soon). Acknowledging the high smoking prevalence and low quit rates among people who live with mental illness, they say that “e-cigarettes and vaping devices may provide a less harmful way to deliver nicotine to those who are unable or unwilling to stop smoking tobacco.”

    The college would like more data on vaping’s long-term health effects and on switching success. However, “This does not justify withholding what is, on the current evidence, a lower-risk product from existing smokers while such data is collected.”

    The position of the U.K. Royal College of Psychiatrists is similarly pragmatic. Vaping devices, they note, have become the most popular real-world quit-smoking aid. Although using neither is preferable, “using an EC [electronic cigarette] is always better than smoking a cigarette.”

    By contrast, a 2022 position statement on vaping products from the American Psychiatric Association does not mention harm reduction. They focus only on potential risks to youth.

    Knowledge can flow the other way, from patient to mental health professional. Murray received counseling for a year from a therapist who was initially highly skeptical of vaping. “She was one of those who believed that nicotine causes cancer and depression,” Murray recalls.

    After seeing the difference in Murray’s focus when she had forgotten her vape at work and gone without nicotine for hours, the therapist became curious. “That’s when we figured out that nicotine helps my ADHD,” Murray says. Upon request, she shared published studies on nicotine and mental health with her therapist.

    Adds Murray, “It was cool to meet somebody who was willing to look at information and think about if what they believed was actually true.”

    Cheryl K. Olson is a California-based public health researcher who specializes in behavioral health issues and consults on tobacco product behaviors via McKinney Regulatory Science Advisors. She spent 15 years on the faculty of Harvard Medical School.
  • Serving the Spice Islands

    Serving the Spice Islands

    Photos: Hertz Flavors

    Hertz Flavors celebrates its first year of operating in Indonesia.

    By Taco Tuinstra

    Visiting Indonesia is a multisensory experience. Breathtaking landscapes, bustling traffic and a spicy cuisine will keep the traveler’s eyes, ears and taste buds working overtime. And for the nose, there is the sweet scent of clove tobacco. Kretek cigarettes are almost as synonymous with Indonesia as the country’s ancient temples and majestic volcanoes.

    Contrary to the situation in many other countries, tobacco remains unabatedly popular throughout the archipelago, with a substantial share of the adult population lighting up frequently. Indonesia is also a leading producer of leaf tobacco and cigarettes. In 2022, the country’s tobacco growers harvested 225.58 million kg of leaf, and its cigarette companies purchased excise stamps for more than 330 billion sticks, according to the Ministry of Agriculture and the association of white cigarette producers in Indonesia, Gaprindo, respectively (the country also struggles with a sizable illicit market). Vapor and tobacco-heating products have been making steady inroads too lately, especially in urban areas.

    Against such a backdrop, it is hardly surprising that industry suppliers have been lining up to set up shop in the country, either to be in closer proximity to domestic manufacturers or to supply international customers—or both. The leading tobacco equipment manufacturers and leaf merchants have been present for some time, and others continue joining their ranks. In June 2022, for example, Smoore Technology, a prominent atomization company serving the global vape market, inaugurated a factory in Malang to supplement its manufacturing base in China (see “Peace of Mind,” Tobacco Reporter, June 2022).

    The prevalence of kretek cigarettes, with their complex blends, makes Indonesia an attractive destination, especially for flavor houses. Kretek cigarettes typically contain casings and top flavors with elements such as fruitiness, sweetness, sourness and spiciness. The products on the market are characterized by highly characterizing flavors and strong pack and stick smells along with sophisticated smoke streams. The virtually unlimited combinations of flavors on the market, in combination with Indonesian smokers’ receptiveness to new experiences, makes Indonesia a flavorist’s paradise.

    Alert to opportunity, Hertz Flavors of Germany last year inaugurated a $5 million state-of-the-art factory in Mojokerto, East Java, located at only 40 km, or one hour’s drive, from the port of Surabaya and in close proximity to the majority of cigarette manufacturers in Indonesia.

    According to Ferdinand Baturusa, president director of Hertz Flavors Makmur Indonesia, the decision to build a local facility was a no-brainer. “The popularity of kretek, both domestically and internationally, has made Indonesia the second biggest market for tobacco flavors in the world—clearly a location we want to be present in,” he says.

    With an annual production capacity of 1 million kg, depending on product mix and complexity, the Indonesian plant has significantly boosted Hertz Flavors’ global footprint. The company also manufactures flavors in Hamburg and operates a sales and innovation center in Dubai under the name Flavoriq, which focuses on the vaping market. In addition, it maintains a significant international presence through agents and partnerships.

    Hertz Flavors is catering to Indonesian smokers’ discerning palettes. Locally popular flavors include apple, grapes and mango, along with cigarettes that taste like traditional Indonesian sweets, such as ludou and taro.

    Baturusa says the Surabaya plant underscores Hertz Flavors’ dedication to upholding top-notch standards in its operations. The facility has been certified ISO 9001 and HACCP in recognition of its systematic approach to quality management and the safety of its products, respectively. ”This accomplishment sets us up to enter the marketplace and provide the best products and services to our Indonesian customers,” says Baturusa.

    Aside from following best industry practices, Hertz Flavors adheres to strict internal quality and compliance standards. “We use our knowledge from almost 70 years of our experience to develop products according to international regulations and with a focus on performance and risk reduction,” says Baturusa, adding that Hertz Flavors will also accommodate individual customers’ preferences.

    Constructing a factory in a new country 11,000 km away from its home base naturally presented a considerable challenge for a medium-sized firm like Hertz Flavors, but with the help of its skilled and knowledgeable local team, the company successfully navigated the obstacles. Local authorities, too, accommodated the project. Baturusa says he is encouraged by Indonesia’s commitment to reforming the investment climate to make it a safe and attractive destination for businesses looking to set up shop in the country.

    In addition to strengthening Hertz Flavors’ global capacity, the investment has boosted the local economy. The Indonesian plant currently has a workforce of more than 30 people with a variety of geographic and educational backgrounds. According to Baturusa, Indonesia’s young and capable workforce, combined with the country’s improving global profile, represents considerable competitive strengths internationally. “As [a] German-speaking Indonesian with a university degree from Berlin, I personally think that this German-Indonesian culture fusion is a great mix,” he says.

    The skills and diversity of its Indonesian team will serve Hertz Flavors well as it caters to Indonesian smokers’ discerning palettes. According to Baturusa, current local tobacco trends include fruity and minty flavors (delivered with or without capsules) along with apple, grapes and mango. Tea-flavored products, too, have a wide following in Indonesia as do cigarettes that taste like traditional local sweets, such as ludou and taro (sweet potato).

    In cooperation with its vape specialists at Flavoriq, Hertz Flavors is also developing innovative flavors for Indonesia’s vape segment, which has grown considerably in recent years. “Together, we also create customized flavors for this unique market and exclusive solutions for our local customers,” says Baturusa. “Depending on demand, our Indonesian factory manufactures these products also locally.”

    Buoyed by the success of its first year in Indonesia, Hertz Flavors is keen to keep growing. For the time being, it intends to focus on domestic sales. “Our main priority is currently the Indonesian market,” says Baturusa. “Indonesia is one of the largest and most vital and innovative tobacco markets worldwide, and we strive to fulfill the necessities and desires of Indonesian customers and cigarette producers. Our commitment is to produce excellent flavors for tobacco and adjacent products and items that comply with the Indonesian market’s exceptional tastes and requirements, resulting in our expanding achievements in this important market.”

    The greatest challenge, according to Baturusa, will be to maintain and improve product quality while ensuring a supply of high-quality raw materials. “Maintaining consumer trust and meeting industry standards depends heavily on product quality,” he says. “In addition, managing raw material resources for tobacco and flavoring ingredients is a significant challenge. In particular, raw material availability and pricing are critical. Manufacturers must uphold stringent quality controls throughout their supply chains while devising innovative solutions to overcome these hurdles.”

    Dedication will be the key. Continued success, says Baturusa, will require leading innovation, staying ahead of trends and attracting the best people. It also involves looking beyond immediate corporate considerations, as Hertz is adamant that its growth will not come at the expense of the environment. “We feel responsible for the sparing use of resources on our planet and for preserving an intact environment—for present and future generations,” says Baturusa. “Our company takes a long-term view in all its activities to ensure the sustainability of our business. We believe in long-lasting partnerships, superior quality and first-class customer service.”

    Taco Tuinstra is Tobacco Reporter’s editorial director.Based in Raleigh, North Carolina, USA, he coordinates the work of staff writers and contributors.On his watch, Tobacco Reporter has won several awards for editorial excellence.Since joining the magazine in 1997, Taco has visited more than 75 countries to meet industry representatives in their markets and to report tobacco news firsthand.
  • Bubbles of Bliss

    Bubbles of Bliss

    Splash’s objective was to develop a smoke-free and vape-free product that would integrate enjoyment and ritual.

    A German startup deploys foam to deliver nicotine.

    By Stefanie Rossel

    Klaus Hagen

    Until recently, users of noncombusted products had two ways of consuming nicotine: through an aerosol generated by e-cigarettes or heated-tobacco products (HTPs) or through direct absorption by the mucous membrane of the mouth, as is the case when using modern oral nicotine products. The Splash platform works with an entirely different medium: foam. According to its eponymous manufacturer, a startup company based in northern Germany, Splash is the fastest delivery system on the market, delivering the desired nicotine “hit” within seconds.

    The stimulants carrier is not an aerosol but a glycerin-free fine foam, similar to the froth on a cappuccino, which is consumed through a mouthpiece. The Splash device comprises a bottle filled with nicotine-containing liquid. A separate department at the top of the unit holds a mix of natural ingredients, including phospholipids and a vegetable emulsifier, that turn the liquid into a stable foam when released.

    “We wanted the particles to stay in the mouth longer than aerosols and be absorbed sublingually,” explains Klaus Hagen, chairman of Splash. “Foam moves slowly and remains in the mouth long enough for ingredients to be absorbed quickly. This way, it takes only a few seconds until the active ingredient arrives in the brain. In addition, the foam allows the aromas to spread in the mouth and create an intense taste experience.”

    To manage the air pressure within the bottle, the device is equipped with coated pills and a filter. “With Splash, we have found a way to substantially shortcut the road that stimulants usually have to take through the body via the stomach and the bloodstream,” says Hagen.

    Smoke-Free and Vape-Free

    Splash is a hybrid: a modern oral nicotine product in the form of a handheld device that mimics the hand-to-mouth motion associated with smoking or vaping.

    Hagen, who boasts a long career in the tobacco industry, most recently as head of next-generation products at a leading multinational, founded Splash in 2021. Development of the Splash platform, however, started as early as 2019. Hagen had just successfully exited his first startup, which had developed a battery-powered shisha.

    “A few weeks after the sale of our company, my team and I were contemplating what to do next,” says Hagen. “We knew that whatever we would develop now would only become relevant to consumers, the industry and regulators in three [years] to four years. When we started with Splash, vaping was already very popular, and it was all about generating big clouds of steam. Oral nicotine products at that time were either tiny niche or locally limited, such as snus in Sweden. The same was true for batteries and their potential hazard for the environment. Nevertheless—or because of that—we decided to create a natural alternative to aerosols and batteries.”

    The objective was to develop a smoke-free and vape-free product that would integrate enjoyment and ritual. “We aimed to be way ahead of a consumer trend we were anticipating,” says Hagen. “At that time, it was a mere gut decision, but it has turned out to be the right one.”

    The idea of using foam was inspired by the detergent capsules used in dishwashers. “We were immediately aware of the enormous potential ‘effervescent tablets’ would have as an energy source for use in inhalers,” says Hagen. “So we decided to develop a method to turn a liquid into a solid foam.”

    Facilitating Switching

    The result is a hybrid—a modern oral nicotine product in the form of a handheld device that mimics the hand-to-mouth motion associated with cigarettes, HTPs or vapes. Hagen calls it a vape 2.0 or “no heat, no burn.” The product can be offered with various nicotine strengths. Once activated, the device generates 25 puffs to 30 puffs.

    The company tested user acceptance at different points in the development process. “In the U.K., we had the product tested by many consumers in London, Birmingham and Manchester this May,” says Hagen. “They all immediately understood what Splash was about, which is on the one hand to maintain an essential ritual known from smoking or vaping and on the other hand to be discreet—i.e., not to emit smoke or vapor. We live in a fast-paced time where social acceptance of smoke[-generating] and vapor-generating products is getting ever more limited. Besides, for smokers or users of HTPs or vape products, the switch to a nicotine pouch is too big a step—they need certain key elements, including habits and satisfaction.”

    In researching the market, the company paid particular attention to two aspects: How do consumers experience the absorption of active ingredients, and how do they like foam as an administration tool? “We were surprised how well both were received,” says Hagen. “Consumers described the uptake of active ingredients as ‘very fast and effective.’ The foam, albeit a novelty, was experienced as extremely pleasant. We had numerous conversations with smokers who confirmed that nicotine absorption through Splash is not only exceptionally fast but also lasts for a long time so that the total consumption of nicotine—spread across a day—is lower than with the usual nicotine-containing products.”

    Splash is not only fast, but it also lasts a long time so that the total consumption of nicotine is lower.

    Klaus Hagen, chairman, Splash

    Low Risk Profile

    Splash’s comparatively low risk profile should help the product gain acceptance in a heavily regulated industry. The foaming agents contain emulsifiers that have been approved for use in the food industry. As a modern oral product, the device is not subject to the EU Tobacco Products Directive (TPD) yet; for the time being, member states can decide for themselves whether to permit the product category. Hagen is confident that the TPD will embrace new products such as Splash in the future.

    Being made of nicotine, the liquid in Splash does not contain harmful substances common in tobacco, such as nitrosamines. The product is also free from heavy metals. Since Splash works without heating or pyrolysis, it doesn’t create any byproducts, such as formaldehydes. What’s more, the absence of a battery means there is no risk of fire or malfunction. Other risks, such as leakage or accidental swallowing of the whole product, are ruled out as well, according to Hagen.

    In addition to equipping its device with a child-safety lock, Splash adheres to strict voluntary standards to prevent youth appeal. “Of course we stick to the legal caps for nicotine, but we also refrain from using sugar-loade[d] flavors or giving our flavors fancy names that are targeting children or youths,” says Hagen. “We don’t do lifestyle marketing, and we focus on age verification for online trade and retail.”

    Splash is a disposable product, planned to retail at $2 per unit and appealing to a mass market with its simplicity of use. However, sustainability has played an important part in its development. “We were motivated to make things better than existing products,” says Hagen. “In contrast to vape products, Splash contains no electronic components. Almost all its parts are made of recyclable plastic, hence the product can be returned into the recycling loop. With this, we are anticipating what is already imminent in some regions: the legally enacted ban of batteries in disposable products.”

    Platform with Potential

    The company believes its platform has potential beyond nicotine delivery. “Splash could be used for the administration of substances that provide users with new energy or a feeling of well-being and deceleration,” Hagen says. “It is also apt for administration of medicines. Our technology has a big advantage for beverage and pharma: the speed of absorption. While it takes about 10 [minutes] to 20 minutes for an energy drink or a painkiller to release its effect, Splash will take only a few seconds. We have already carried out respective tests in our labs, and there’s interest from the industries. Here, our technology could be licensed.”

    The company, which comprises a network of 14 people spread across several cities and continents, aims to become an expert in the administration of substances rather than an expert in the distribution of nicotine products, according to Hagen. For the time being, though, Splash is focusing on nicotine, which currently engages the majority of its staff. A second division, however, is working on other mood enhancers.

    The Splash device is developed in Germany and manufactured in China. For regulatory reasons and to distinguish it from use in other industries, the company in November rebranded the nicotine part of its platform under the name Voam.

    The company started to commercialize its patented technology as a nicotine product in the late summer of 2023, testing the product in several stores in close contact with consumers to be able to potentially make last adjustments. “We intend to keep this panel that exceeds traditional market research to test innovations, such as new flavors, in the future,” says Hagen.

    According to him, the industry has already shown significant interest in the product. The company has been in talks with representatives of the traditional tobacco business as well as the nicotine industries and leading distributors in several countries. “We are already negotiating the first larger volumes,” says Hagen. “In the selection of potential partners, it is especially important to us that the player shares our mission: to enable a smoke[-free] and vapor-free world with our product without forgoing enjoyment and rituals.”

    Stefanie Rossel is Tobacco Reporter’s editorial contributor. An experienced trade journalist, she combines sharp reporting skills with in-depth knowledge of the tobacco and vapor industries. Prior to joining Tobacco Reporter, Stefanie was editor-in-chief at Tobacco Journal International, where she worked for a decade. Fluent in English, German and French, Stefanie covers tobacco news around the world. She is based in Germany.
  • Unpacking the Pouch

    Unpacking the Pouch

    Photo courtesy of Broughton

    How we can better understand the toxicological risk of nicotine in modern oral and other nicotine products

    By Libby Clarke

    Nicotine may be acutely toxic via all routes of exposure if the dose is high enough, but determining the true extent of its toxicity is challenging because of the variation in data. In 2014, Bernd Mayer highlighted the discrepancy between the generally accepted lethal dose of nicotine and documented cases of nicotine intoxication. Examining these accidental oral ingestion case studies gives us another data point for consideration when determining nicotine toxicity.

    In this article, Libby Clarke, managing consultant for toxicology at contract research organization (CRO) and scientific consultancy Broughton, explains how manufacturers can understand the true impact of oral pouches and other nicotine-based products.

    The U.S. Centers for Disease Control and Prevention and the National Institute for Occupational Safety and Health, along with other sources, report an estimated lethal dose of around 60 mg when nicotine is ingested orally. While broadly accepted by the Food and Drug Administration and other regulatory bodies, this value is derived from a series of self-experiments conducted by two individuals in the 19th century, where non-fatal adverse effects were reported.

    Mayer estimated that a dose of 60 mg of nicotine would give rise to a plasma concentration of approximately 0.18 mg per liter based on 20 percent oral bioavailability and assuming linear kinetics. Cases of fatal nicotine intoxication cited by Mayer suggest a much higher lethal nicotine blood concentration of approximately 2 mg per liter, corresponding to 4 mg per liter in plasma. Many existing case studies include data on accidental ingestion in children and infants, where the lethal dose is likely lower, as with nicotine naive adults.

    There is a significant disparity in the levels of nicotine that individuals can tolerate and a broad range in the upper level of nicotine that nonsmokers can consume without experiencing adverse effects. Research indicates that tolerance increases with repeated use of nicotine products, but the speed at which tolerance grows depends on the frequency of nicotine use, the amount absorbed systemically and individual genetics.

    Research Challenges

    Understanding nicotine toxicity is essential for determining the likelihood of adverse effects associated with certain products and concentrations, but research is limited. It is unethical to test nicotine toxicity in nonsmokers, and light or nondaily nicotine users are likely to have a lower tolerance, putting them at a higher risk of experiencing adverse effects such as dizziness, nausea and vomiting. On the other hand, established smokers have upregulated receptors in the brain, meaning many more nicotine receptors are available to bind nicotine than in nonsmokers. Therefore, the higher levels of nicotine that produce adverse reactions in nonsmokers are often required to satisfy the cravings of regular smokers.

    The wide range in tolerance among adult nicotine users makes it challenging for manufacturers to define a threshold for nicotine toxicity in their products. Meanwhile, attempting to extrapolate findings from children to adults is not recommended due to differences in metabolic capacity, which increases as people grow. There is also a vast difference in metabolic efficiency, even among adults, which limits extrapolation.

    Understanding the Effects of Nicotine

    One option is for manufacturers to review case studies, conduct postmarket surveillance (PMS) on the incidence of reported adverse effects and use surveys to understand consumer use and the subjective effectiveness of nicotine delivery. For example, Massen et al. (2020) evaluated case studies reporting the clinical symptoms and outcomes associated with accidental or intentional ingestion of nicotine-containing e-liquids, which are limited to 20 mg per milliliter in the EU. Gerdinique C. Maessen et al. reported that the highest nicotine plasma concentration in the surviving group was 0.8 mg per liter. In comparison, the lowest plasma concentration in the patients who did not survive was 1.6 mg per liter.

    Another approach is working with a CRO that can conduct dissolution, aerosol characterization for inhaled products and pharmacokinetic studies to inform on the nicotine levels being delivered to users. CROs can also conduct behavioral studies under controlled conditions to understand the use patterns for certain products and what products and strengths are used across population samples.

    When developing oral pouches, manufacturers must adhere to the regulatory guidelines that are starting to be brought in by some markets. The rate at which nicotine transfers from the pouch across the buccal membrane is one of the main factors associated with users experiencing adverse effects, so manufacturers should consider a range of nicotine strengths. Dissolution studies and clinical studies may provide useful data to inform nicotine exposure from pouches, and case studies and PMS may also provide valuable insights. Working with a CRO that can conduct such studies is an effective way of understanding a product’s safety profile and form part of a manufacturer’s product stewardship and duty of care responsibilities.

    Libby Clarke is managing consultant for toxicology at Broughton, a global scientific consultancy-based CRO across industries in pharmaceuticals, next-generation nicotine-delivery products and cannabinoids.
  • The Core of the Confusion

    The Core of the Confusion

    Photo: Westock

    The likely origins of the prevailing misperceptions about nicotine—and how that impacts tobacco harm reduction

    By Sudhanshu Patwardhan

    A widely prevalent misperception prevailing in society is that nicotine in tobacco products causes cancer. This myth and its widespread acceptance even among healthcare practitioners worldwide was recently highlighted by a survey among 15,000 doctors from 11 countries. Nicotine misperception may be the key reason preventing the world from becoming free from risky forms of smoked and smokeless tobacco products. The origins of this misperception may have something to do with south Asia and the nasty oral tobacco products sold there.

    The Basis of Tobacco Addiction

    To achieve a world free of risky tobacco product use, understanding nicotine’s role in tobacco addiction is crucial. Tobacco addiction—in lay terms, the harmful habit of consumers of risky forms of tobacco to continue consuming despite knowing the harms to themselves and society—is primarily driven by the psychoactive effects of nicotine. The hand-to-mouth action, the action of nicotine on brain receptors, the activation of reward pathways in the brain, the release of neurotransmitters during product use and their eventual depletion, the expectation of the kick of the drug on longer term use, the craving and withdrawal effects that are mitigated by further consumption (or dosing) of nicotine, the social and cultural cues—all these point to a complex interplay. Nicotine is central to this addiction. An addiction that kills over 8 million people worldwide every year, affecting millions more in bereaved friends and families, and sees another 1.3 billion people in the world struggling to quit.

    It Is the Smoke, Stupid … or Is It Just?

    Over nearly five decades of tobacco control, thought leaders in the West have been enamored by—and have generously quoted—Michael Russell’s statement, “People smoke for nicotine, but they die from the tar” (Russell, British Medical Journal, 1976). He was right in the context of smoked tobacco. Indeed, this insight underpinned the enlightening among some tobacco control researchers in the U.K. and across the Atlantic. That in turn manifested in ground-breaking publications, e.g., the 2001 National Academy of Sciences’ Clearing the Smoke report, the 2007 U.K. Royal College of Physicians’ report Harm Reduction in Nicotine Addiction: Helping People Who Can’t Quit and the 2014 U.K. Royal College of Physicians’ report Nicotine Without Smoke: Tobacco Harm Reduction.”

    Indeed, the U.K. medicines agency’s authorization of an additional harm reduction indication for nicotine-replacement therapy (NRT) products from 2010 onward established the world’s first class of licensed tobacco harm reduction products. This is often forgotten by tobacco harm reduction advocates as well as tobacco control enthusiasts around the world, with even lesser understanding of how and why the U.K. arrived at this fork on its journey in addressing tobacco-related harms (Patwardhan, Drug Testing and Analysis, 2022).

    Metaphorically separating nicotine from its toxic delivery system that burned tobacco allowed Russell and the subsequent generations of public health thought leaders to pave the way for nicotine in cleaner forms to be formulated in various delivery systems, starting with medically licensed nicotine gums, patches and lozenges and culminating in Hon Lik’s invention of the e-cigarette. Heated-tobacco products launched by large tobacco multinationals also entered the market, with companies keen to “unsmoke” the world and phase out combusted tobacco, just like electric batteries in place of combustion engines in automobiles. Or Coke Zero and Pepsi Max instead of Coke and Pepsi. Right? Wrong! This narrative ignores oral tobacco consumption by nearly 300 million tobacco users, living mostly in Asia and Africa, and the attending oral and pharyngeal cancer-related morbidity and mortality.

    Smokeless Tobacco’s Harms: A Collective Blind Spot

    One estimate suggests that nearly 10 percent of doctors in the U.K. are of Indian or Pakistani origin and a sizeable number from Africa and the rest of Asia as well. There is even a higher proportion of healthcare professionals from these continents in mental health settings. Training in south and southeast Asia or Africa inevitably exposes doctors to patients presenting with the harms of oral tobacco.

    Current medical curricula in these countries (or in fact anywhere else in the world) do not go into any level of detail when it comes to treating smoked or smokeless tobacco addiction. During medical education, it is quite common to simply identify the myriad diseases that tobacco is responsible for and to require trainee doctors to advise patients to quit. Which nicotine-replacement therapy to prescribe, why, how to provide behavioral counselling for tobacco de-addiction, the need for follow-up and relapse prevention, the impact of smoking on specific drugs’ metabolism and reduced efficacy are skills and knowledge that are not imparted at any stage of clinical training to doctors, dentists or nurses anywhere in the world.

    There are millions of healthcare professionals in Asia and Africa and hundreds of thousands of expatriate doctors and nurses from these continents in Europe, America and the Middle East who have seen oral cancer patients, most likely resulting from oral tobacco use. They have seen firsthand the harms from oral tobacco products.

    Unsurprisingly, telling them that tobacco harm reduction can be achieved by going smoke-free or by switching to “smokeless tobacco products” or giving “safer” nicotine alternatives will be perceived as fake news at best, disingenuous and dishonest at worst. Even licensed NRTs are not spared in this misperception, with many clinicians worried about nicotine causing cancer and NRT addiction with longer term use. This may result in inadequate NRT being prescribed for not long enough, thus making relapse more likely.

     

    The use and harm profile of south Asian and African smokeless tobacco products is often not mentioned when championing snus (and therefore smokeless tobacco) as harm reduction. This can only add to the distrust of the industry and tobacco harm reduction advocates by the public health community.

    Nicotine Misperception: The Likely Origin Story

    There is an unprocessed wrong belief that most health experts and lay people have come to harbor: tobacco = nicotine = cancer. Toxicants, including carcinogens, are delivered during consumption of most tobacco products: from the smoke due to combustion of tobacco in the case of cigarettes/cigars/cigarillos and bidis, or added/formed in the manufacturing and storage of Asian and African oral tobacco products, e.g., chemicals, slaked lime, areca nut-specific nitrosamines and tobacco-specific nitrosamines (TSNAs).

    The exception to these is Swedish-style pouched smokeless tobacco (snus). Through decades of evolving manufacturing standards and innovation, concentrations of carcinogens such as TSNAs and other toxicants in Swedish-style snus have been engineered to be minimal. The population level effects of the “Swedish experience” with snus in enabling a transition to a smokefree nation with the attending lowest male lung cancer rates in the EU, are the darling of tobacco harm reduction advocates. However, the use and harm profile of south Asian and African smokeless tobacco products is often not mentioned when championing snus (and therefore smokeless tobacco) as harm reduction. This can only add to the distrust of the industry and tobacco harm reduction advocates by the public health community.

    In the absence of a curriculum that does not specifically distinguish nicotine’s psychoactive properties and dependence-causing potential from the toxicants formed or present in smoked or most smokeless tobacco products, healthcare professionals may easily conflate the tobacco products’ harms with nicotine.

    Furthermore, their experience with patients from south Asia and Africa makes it logical for them to unconsciously do so. There are already lazy parallels with other widely prevalent addictions afflicting the world: e.g., alcohol. The nuance, however, is lost, that unlike nicotine, ethanol is the psychoactive component as well as the chemical that harms the liver and brain cells.

    Lay media add to the confusion. Globally, tobacco control slogans and campaigns have run for decades now, most often using simple one-liner messages against nicotine. There was no need or place for nuance for those wanting to rid the world of the indirect harms of nicotine. It could even be justifiable for some to do so to achieve their utopian prize of a tobacco-free society (not to be confused with a society free from the harms of tobacco, a worthy goal).

    The problem arises when nicotine, the very chemical that is vilified in the prevalent anti-tobacco narrative, when delivered in clean systems is recognized as a key solution for the 1.3 billion users of risky smoked and smokeless tobacco products. E.g., the World Health Organization has NRT on its model essential medicines list for treating tobacco dependence.

    Nicotine: An Orphan Drug

    Eighty percent of the world’s users of risky tobacco products, nearly 900 million people, live in low-income and middle-income countries (LMICs). Most of them do not have access to affordable and appealing safer forms of nicotine-replacement products, including NRT. A majority of healthcare professionals in those countries wrongly believe that nicotine in tobacco products causes cancer. In these countries, tobacco cessation treatments are either unavailable or delivered by healthcare professionals who are not trained in the art and science of nicotine replacement and behavioral interventions.

    For too long, pharma and tobacco companies have shied away from owning nicotine, with pharma perhaps worried about the optics of selling a psychoactive substance with such global harms, albeit due to the dirty delivery system it is currently sold in. Tobacco companies care about their own brand and product and may prioritize brand building over broader product-agnostic market conditioning about nicotine. The result is that a large swathe of countries that lack the sophistication or the academic rigor and experience of the U.K.’s tobacco control community or the U.S.’ Food and Drug Administration find themselves accepting hand-me-down anti-tobacco-harm-reduction rhetoric.

    Light at the End of the Tunnel?

    A rush to launch new nicotine products globally without adequate disentanglement between tobacco and nicotine education will only lead to more knee-jerk reactions and bans. That shall slow down any ambition to make the world smoke-free, or to be more precise, free from risky tobacco products. Achieving nicotine literacy through education and practice may be the much-needed game changer. In theory, most countries, including LMICs, have NRT on their national essential medicines list.

    That does not necessarily translate into actual availability and affordability for cessation. Anyone truly invested in tobacco harm reduction should recognize that much groundwork needs to be laid first to get the new generation of healthcare students and future practitioners to be nicotine confident—starting with NRT. Tobacco cessation, underpinned by tobacco harm reduction principles, should be taught, practiced and experienced in LMICs through well-regulated healthcare ventures and partnerships.

    Consumers, healthcare practitioners and governments first need to see the success with cessation using conventional NRTs but also recognize the need for a wider choice of safer nicotine alternatives to wean off the 1.3 billion current tobacco users. Only then will the conditions be ripe for companies to responsibly market their nicotine innovations to adult tobacco users in such markets.

    Sudhanshu Patwardhan is a medical doctor, nicotine expert and health tech entrepreneur from India, based in the U.K. He works on projects around the world to reduce harm from tobacco, especially among the most disadvantaged tobacco user populations.