Category: Also in TR

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  • Navigating the Regulatory Wave

    Navigating the Regulatory Wave

    Photo: Avail

    Retailers must focus on Online Rules

    By Nicholas A. Ramos, Agustin E. Rodriguez and Bryan M. Haynes

    Online businesses selling electronic nicotine delivery systems (ENDS) to consumers must contend with a “patchwork quilt” of state laws. This patchwork of laws creates significant regulatory uncertainty and risk for businesses selling online in this space. There are many legal issues facing online retailers, like bans or restrictions on “flavored” tobacco products, minimum age and age-verification requirements, and state and local licensing and tax requirements. This article discusses some of the key legal issues associated with selling ENDS to consumers online and highlights proposed state legislation that may impose more requirements on the industry.

    State licensing

    Online retailers looking to comply with the myriad of state laws should first look at the states in which consumers purchase their products and, for each state, identify potentially applicable licensing laws. States may require licensing or registration under tax laws, health and welfare laws, and/or general business laws before online retailers may sell to consumers in their states. Idaho, for example, requires licenses from its Department of Health and Welfare to prevent youth access to tobacco products and electronic smoking devices. Washington, D.C., however, requires a basic business license from its Department of Consumer and Regulatory Affairs.

    In addition, online retailers of ENDS should determine whether state licensing law definitions actually cover their products. While states have required licenses for the sale of tobacco products for years, they have only recently added definitions of ENDS to their licensing statutes. ENDS may be covered under licensing laws either because the category is explicitly defined, or the definition of tobacco products is broad enough to cover ENDS products.

    Online retailers should also determine whether state licensing laws actually cover remote sales. Some states only require licenses for retailers that have a “place of business” or “business location” in their states. Hawaii, for example, is unique in that it requires ENDS retailers to obtain a registration from the Hawaii Attorney General. At this time, however, the Attorney General only requires retailers to register if they are located in the State, which excludes out-of-state online retailers.

    It is also important to keep in mind that most state laws regulating ENDS were only passed within the last 3-5 years. Many of those new laws simply amended existing tobacco product laws, and legislatures may not have carefully incorporated those changes in all of the critical statutory sections. Consequently, there are often situations in which the legal requirements are not clear. In those cases, it may be prudent to reach out to regulators to better understand how they interpret their statutes.

    State taxes

    When online retailers face ambiguous licensing laws, it may be helpful to look to the purpose of those laws. For example, if licenses are required by a tax department, the online retailer should look at the tax statute to determine who and what is subject to taxes. Many states require licenses to facilitate payment of sales or excise taxes.

    Almost all states impose sales and use taxes on remote sales of products. For out-of-state online retailers, most states follow the analysis outlined in South Dakota v. Wayfair, Inc., 138 S. Ct. 2080 (2018), which generally permits a state to impose sales tax on an out-of-state seller where the seller has a “substantial nexus with the taxing State.” Some states require a business or tax registration to file returns and pay sales taxes.

    Missouri, for example, does not tax or regulate ENDS as tobacco products, but it requires online retailers to obtain a retail sales tax license for sales tax purposes. Furthermore, states typically only require sales taxes from remote sellers when a certain sales volume or revenue threshold has been met. Virginia, for example, requires a remote seller to register for the collection of sales and use tax if it received more than $100,000 in gross revenue from sales in Virginia or engaged in 200 or more separate retail sales transactions during the previous or current calendar year.

    In addition, like state licensing laws, the applicability of excise taxes to ENDS products sold online can depend on the specific product definitions in the relevant statutes. Some states’ excise tax statutes explicitly define and include ENDS products, while others attempt to fit those definitions into terms like “tobacco products” or “other tobacco products.” Utah, for example, explicitly taxes “electronic cigarette substances,” “prefilled electronic cigarettes,” “alternative nicotine products,” “nontherapeutic nicotine device substances,” and “prefilled nontherapeutic nicotine devices” in its Electronic Cigarette and Nicotine Product Licensing and Taxation Act.

    Some states explicitly exclude ENDS from definitions that would subject them to excise taxes. Texas, for example, provides defines taxable “tobacco products” to exclude e-cigarettes, or any other device that simulates smoking using a mechanical heating element, battery, or electronic circuit to deliver nicotine or other substances through inhalation.

    It is also important to keep in mind that states tax various parts of ENDS products in different ways. Virginia, for example, imposes an excise tax on liquid nicotine products at the rate of $0.066 per milliliter of liquid nicotine, but the State does not impose taxes on other components of ENDS. Washington, D.C., on the other hand, taxes vapor products by making the tax rate equal to the cigarette tax, expressed as a percentage of the average wholesale price of a pack of 20 cigarettes.

    Finally, if online retailers determine state excise tax laws apply to their ENDS products, they must still determine who is required to pay those taxes and when they are due. For example, some states, like Kentucky, require that excise taxes be paid by the licensed distributor that first possesses the ENDS products for sale to a retailer or unlicensed person in the State.

    Potential penalties & enforcement climates

    Online retailers facing ambiguous licensing statutes should consider two major factors in their risk analysis—statutory penalty provisions and enforcement climate.

    Penalties for operating without a license can be steep. In Idaho, for example, it is a criminal offense to sell ENDS without a permit issued by the Department of Health and Welfare. In addition, a court may impose a fine of $1,000 per day beginning the day following the date of citation as long as the illegal ENDS sales continue.  In other states, however, penalties are relatively low. In Montana, for example, failure to obtain a vapor product license is punishable by a civil penalty of $100.

    Finally, online retailers should consider the enforcement climate surrounding regulation of ENDS products in certain states. For example, Attorneys General in various states have filed lawsuits against an ENDS manufacturers and online retailers. Although these cases do not directly implicate licensing or tax issues, enforcement actions by Attorneys General may suggest a more aggressive enforcement climate when it comes to licensing or tax violations.

    Proposed state legislation

    Online retailers should expect upcoming state legislative sessions to be fairly active with regard to regulation of ENDS products. In Colorado, for example, there is no current nicotine products or ENDS tax or licensing scheme. But Colorado HB20-1472 established a voter referendum on whether there should be a tax on “nicotine products,” which would include “products that contain nicotine and that are ingested into the body.”

    In Georgia, the legislature is considering a bill that will amend its tax and revenue laws “to provide for excise taxes to be levied on certain alternative nicotine products and vapor products” and to “require licensure of importers, manufacturers, distributors, and dealers of alternative nicotine products or vapor products.” HB 1229.

    South Carolina is also considering a bill (H.4714) that will “provide for the levying, assessment, collection, and payment of certain taxes on vapor products.”

    These are just a few examples of states that are considering ways to regulate and tax ENDS products. Therefore, it is important for online retailers to incorporate accurate state legislative tracking into their compliance strategies.

    Conclusion

    As with any other new technology, the law is often playing catch up with new business models and products, like the online sale of ENDS products. But given the issues discussed above, online retailers should prioritize compliance with varying state laws to reduce the risks of enforcement action.

    Nicholas A. Ramos is an associate with Troutman Pepper. His practical advice enables clients to navigate regulatory compliance and licensing issues, complex investigations, and high stakes enforcement actions that arise under state and federal law.
    Agustin E. Rodriguez serves as counsel for Troutman Pepper and has almost two decades of experience counseling tobacco companies in-house and in private practice on tobacco product regulation, taxation and multi-jurisdictional state and local enforcement issues.
    Bryan M. Haynes is a partner with Troutman Pepper who specializes in tobacco industry regulatory compliance and enforcement matters. He efficiently assists clients in complying with regulatory obligations and managing risk, consistent with clients’ business objectives.
  • Tyranny of the Majority

    Tyranny of the Majority

    Photo: Olha Brahina| Dreamstime.com

    The Covid-19 pandemic should not be used as an excuse to permanently restrict shisha lounges.

    By George Gay

    Since shortly after the start of this year, people around the world have been asked or required to change some of their habits to allow governments to implement strategies aimed at defeating Covid-19. Under these changes, people have been introducing certain hygiene regimes, staying at home except for essential outings, observing social distancing and wearing masks.

    There is, in my book, nothing controversial in this. Democracy involves an unwritten agreement, part of which has it that citizens can expect their governments to protect them as long as those citizens are willing to fall in line with the reasonable requirements of their governments.

    So far, so good. Of course, no system is perfect, and there are those who, brought up on a diet of neoliberal dog-eat-dog dogma, like to rail against any curtailments of their perceived rights while ignoring any social responsibilities they might have, even though, for many of them, the wearing of masks, for instance, would be aesthetically affirming. And there are those who, while believing that complying with such safety requirements is a good idea, believe it is a good idea only for others.

    Such attitudes are not helpful. Since it is known that the coronavirus that causes Covid-19 is transmissible in a number of ways, including through human-to-human contact, it is necessary, in order to defeat the pandemic, for as many people as possible to follow the rules set out by responsible governments. But such unity is undermined by people who believe they can be free agents while enjoying the advantages of a rules-based society. And it is undermined by governments when rules are not applied fairly, which usually means, in part, universally.

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    Touching lips

    According to a story in the Hindustan Times, on Aug. 3, India’s national government banned with immediate effect the use of hookahs in public places, purportedly as part of its strategy for defeating Covid-19. But I cannot help feeling there is more to this ban than its use in the fight against Covid-19.

    There has to be. The Hindustan Times reported that, in announcing the ban, the principal health secretary Vikram Dev Dutt had cited four reasons why the use of hookahs increased the transmission of Covid-19, but these reasons don’t stand up to scrutiny. The first reason was said to be that smokers were likely to touch their lips more often [presumably than were nonsmokers]. No evidence was given in the newspaper piece for this statement and, from my further reading, this seems to be an idea put forward in respect of cigarette smokers, which would at least align with common sense, given the way that a lot of cigarette smokers hold their cigarettes. On the other hand, my observations of hookah smokers tell me that they tend not to touch their mouths with their fingers when they place a hookah mouthpiece between their lips. Indeed, an Internet picture I saw of four Palestinian men enjoying shisha in a lounge showed the shisha-pipe mouthpieces being held with hands at least 25 cm from their faces and passing through face masks, which would have made it impossible for the smokers to touch their lips. I would suggest that any division between people who touch their lips with their fingers a lot and those who don’t has to do with factors other than hookah smoking or not.

    The second reason given was that smokers were likely already to have lung diseases or reduced lung capacity [compared with that of nonsmokers]. This might be true, if it applies to all smokers, not just hookah smokers. Again, there was no evidence given for this statement, and it wasn’t mentioned that while some people claim that tobacco smoking leads to worse outcomes if a smoker contracts Covid-19, others claim that smoking can protect against contracting the disease. I hasten to add that, to the best of my knowledge, neither of these claims has been corroborated.

    The third reason was that smoking hookahs involved sharing mouthpieces. This is simply wrong. It might be that some people share mouthpieces, but others don’t, as was the case with the four Palestinian men described above, who were each using not only separate mouthpieces but separate pipes. Sharing mouthpieces or pipes is not a condition of smoking hookahs.

    The fourth reason was that conditions likely to increase oxygen needs or reduce the ability of the body to use oxygen properly would put Covid-19 “patients” at a higher risk of developing complications. This might be true, but it concerns the outcomes of individuals who have caught the disease, not the transmission of Covid-19, which is purportedly what the ban was put in place to reduce. And, in any case, if it is true it applies to all smokers, not just hookah smokers.

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    Terrible irony

    Indeed, it would apply much wider still. There is a terrible irony in the government’s having raised the issue of “conditions likely to increase oxygen needs or reduce the ability of the body to use oxygen properly.” The Indian national government sits in Delhi, which, according to a Wikipedia entry quoting a World Health Organization survey of 1,650 cities worldwide, has the worst air quality of any major city in the world. “On 25 Nov. 2019, the Supreme Court of India made statements on the pollution in Delhi, saying, “Delhi has become worse than narak (hell),” according to Wikipedia. “Supreme Court Justice Arun Mishra said that it is better to get explosives and kill everyone.” Quite.

    Looked at through the lens of the health secretary’s four reasons, it seems laughable to imagine that a ban on smoking hookahs in public places is going to have more than a snowball’s chance in narak of slowing the tide of Covid-19. But that is not to say that such a ban is not useful. It probably is, but the real reason why it is useful is that, along with similar measures applied to other public venues, it helps prevent people congregating for nonessential reasons. Going back to the four Palestinian men, only one seemed as though he might be socially distanced.

    It was and is perfectly logical for shisha lounges to be shut during lockdowns that have seen the closing of other public venues, including bars, restaurants and places of entertainment. And a quick check of the internet soon reveals that closures have occurred in many countries, including those where shisha use is traditional.

    But, by the same token, it is perfectly logical for shisha bars to reopen after lockdown rules on these sorts of venues are relaxed and once general and specific regimes for keeping customers as safe as possible have been put in place. One London council has asked shisha venue owners to limit the number of customers allowed into their lounges and ensure social distancing; to ensure customers wash their hands before and after smoking; to thoroughly sterilize pipes after use; to use disposable mouthpieces; and to ban the sharing of pipes.

    None of these requests is particularly onerous, and while limiting the number of customers might have implications for a business’ viability, this is an issue that all public venues are having to face as part of the trade-off between protecting health and reopening the economy.

    What should not happen, however, is temporary and justifiable bans on the opening of shisha lounges be extended unjustifiably in relation to what is happening with other comparable venues, or even turned into permanent bans. And this is happening, or at least being suggested, in some countries led by people with what I would describe as highly focused puritanical attitudes—in countries where political opponents can be made to disappear, but heaven forbid they should be allowed to harm themselves by smoking.

    And this sort of unjustifiable ban can be rendered “justifiable” in the eyes of many people by conducting polls. An Arab News Twitter poll of 1,500 people apparently found that 82 percent of people favored maintaining bans on the opening of shisha lounges even after lockdowns were otherwise lifted. But acting on the evidence of such polls is clearly unfair given that shisha smoking is a minority activity that has been given pariah status by authorities around the world but not banned. Such polls are like asking whether the authorities should ban the public playing of bagpipes—another activity defined by hoses and mouthpieces—in England, where I assume 99 percent of people not hearing-impaired would, somewhat selfishly, vote yes to a ban. Polls should not be used to enforce the tyranny of the majority.

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    Case study

    Faizan Aatif

    In August, Tobacco Reporter asked Faizan Aatif, who, with partner Mohammed Sheikh, runs Afzal Shisha UK, about some of the shisha business challenges and responses that had been elicited by the Covid-19 crisis. Aatif, whose business supplies a novel shisha tobacco product to individuals and businesses and was the subject of a recent feature story in Tobacco Reporter, is closely associated with the world of shisha lounges.

    Tobacco Reporter: Is it correct to say that shisha bars in the U.K. have been shut since the lockdown closed other venues, such as restaurants and pubs?

    Faizan Aatif: Yes, indeed, all shisha lounges in the U.K. were forced to close along with restaurants and pubs in March.

    Are these shisha bars now opening with new hygiene rules in place?

    Yes, the majority of shisha lounges have now reopened but with reduced capacity and precautions as per government guidelines.

    What sorts of rules are being introduced?

    Mainly, those to do with social distancing between tables, the wearing of masks by staff, bans on the sharing of pipes, the use of disposable hoses and the introduction of hand-sanitizing stations. Some businesses even check the temperature of patrons prior to allowing entry to the premises.

    Are these initiatives consistent across the country, or do they vary venue to venue? 

    As you would expect, some venues are better than others, but generally they are consistent in following guidelines.

    Do you think shisha bars can be viable with these new rules in place?

    For the time being, especially after such a prolonged lockdown, people are just thankful to have a venue so they can get out and socialize with friends. Many are nondrinkers, so the shisha lounge is their bar and club. The shisha is pretty secondary! All shisha lounges we deal with have been extremely busy ever since they reopened, so hopefully if there is not a significant second wave of infection and another lockdown, things will return to normal soon.

    How has the lockdown affected your shisha business? Have you seen increased sales to individuals?

    With lounges being forced to close, we were really worried as our trade sales dropped to zero literally overnight. However, we formed a strategy to focus on small retail packs, and that was very successful and kept us ticking over. A massive proportion of previously lounge-only smokers began purchasing shisha apparatus and shisha tobacco to smoke at home, and we spent a lot of time on social media giving advice to new home smokers to help them improve their sessions and troubleshoot any issues they were experiencing. We also ran some discount promotions and competitions for end customers, and those campaigns proved very successful.

    Is there anything else significantly impacting the shisha business in the U.K. right now?

    Our biggest problem in the U.K. shisha industry is the number of illegal black market “brands” emerging on the market, enticing lounges and retail customers with cheap, tax-free pricing. Many of these products are entirely unregulated and mixed up in underground factories, so there is a very real increased public health risk. We need greater policing of our segment of the tobacco industry by the authorities as it’s hitting the few official U.K. importers such as ourselves very hard. If the legitimate brands decide it’s no longer in their interests to pursue the U.K. as a viable market, then the entire industry will be driven underground and will be in the hands of criminals. —G.G.

    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.
  • The Women of Science

    The Women of Science

    BAT’s women scientists share their experiences working for one of the world’s leading tobacco companies.

    TR Staff Report

    Diversity and inclusion are hot topics and rightfully so. The gaps in opportunity between different genders, ethnicities and ages, among other identifying factors, have become more readily noticeable as reporting has grown and many companies work hard to make progress around these issues.

    British American Tobacco (BAT) has always championed diversity, and the company’s new ethos and diversity agenda reflects this ongoing commitment. With over 50,000 employees around the world, having diverse teams, cultures and skill sets are crucial to delivering success globally. The company is accelerating plans to create a more inclusive culture and has set some ambitions that include diversity of experience as well as having a range of nationalities across its leadership teams, and its gender ambitions remain a priority across the whole organization.

    Launched earlier this year, the new ethos is about being bold, fast, empowered, responsible and diverse to create a future-fit culture. It was developed with significant input from employees and designed to drive the company’s vision to “build a better tomorrow” by reducing the health impact of its business through offering a greater choice of enjoyable products for its consumers.

    To put this ethos into action, BAT introduced some new initiatives, such as Parents@BAT, which offers a range of benefits to support parents around the world, alongside its well-established programs such as Women in Leadership and B United, the firm’s self-governed global community of lesbian, gay, bisexual and transgender (LGBT+) employees and their allies.

    “Diversity is a key part of our ethos,” said David O’Reilly, director of scientific research at BAT. “We have initiated a range of training and development programs to support our teams, including women in leadership, a 30 percent mentoring club, Parents@BAT, how to guard against unconscious bias as well as career break reintegration.”

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    Recently, BAT published a series of interviews with some of their female scientists as part of the U.K.’s national Women in STEM campaign as well as a video as part of their own Women in Science campaign.

    “We launched our Women in STEM (science, technology, engineering and mathematics) initiative in July 2019,” according to BAT. “Using external partnerships and internal learning and development platforms, the initiative aims to attract, develop and retain more women across our research and development, operations and information and digital technology functions. In the U.K., we have joined WISE, an organization that enables people in business, industry and education to increase the participation, contribution and success of women in STEM roles by organizing knowledge-sharing and networking events, training and webinars.”

    BAT’s “Celebrating Our Women in Science” video was published to celebrate International Day of Women and Girls in Science, focusing on the achievements of the company’s female scientists and their work. Tobacco Reporter asked some of these scientists about diversity and inclusion and what it’s like to work in their fields.

    Linsey Haswell

    Tobacco Reporter: What drew you to science, and why did you choose to work in the tobacco industry specifically?

    Linsey Haswell, clinical research scientist: I’ve been interested in science since I was a child. I remember going to visit natural history museums with my mum when I was little and being fascinated by the exhibits, and my dad reminded [me] recently that once I started to study science in secondary school, I had a periodic table pinned up on my wall. So I had a real interest in science before I realized you could make a career out of it. Until I saw a job advertised by BAT, I hadn’t thought of the tobacco industry as a career path. Then I started to read about the work and the science that BAT did, and when I went to the job interview, I really liked the facilities at the R&D hub in Southampton and how passionate and enthusiastic the people were about their work. I enjoy the variety my job offers and the fact that two days are rarely the same. I have spent 15 years in the preclinical team in the lab growing cells, but I equally enjoy engaging with people and communicating the science and work we do in R&D.

    Emma Cheung, biological platforms scientist: I have always enjoyed science, and following chatting to my A-level biology teacher, I decided to apply for pharmacology courses at university. As part of my undergraduate degree, I undertook a year in industry and came to work at BAT, Southampton. I really enjoyed my year, the science that BAT was doing and the focus on in vitro work. Following my graduation, I was offered a temporary contract in the team and then a permanent contract, and I’m still here 13 years later.

    Summer Hanna, principal science manager in the new sciences department: I didn’t seriously consider a career in science until I was approached by a professor during my first year of university who suggested I consider majoring in chemistry. Once I had the opportunity to take part in undergraduate research, I developed a passion for better understanding the world around me through science. I chose to work in the tobacco industry partially by chance. While I was in graduate school at Wake Forest University, there was a person in my adjoining lab who was working on their Ph.D. part time while working full time at R.J. Reynolds, so I learned a little about the company as a Ph.D. student. We wound up sitting next to each other at graduation, and he mentioned that there were opportunities in their summer internship program as I was still looking for a job. I thought it would be a good way to gain career experience, applied and was offered an internship in analytical research. I was a little apprehensive, but shortly before I started, a professor said to me, “You’ll be pleased at the quality of research that goes on there,” and it turns out he was right. I’ve had the pleasure of working with really fantastic scientists throughout my career, and I’ve always appreciated the welcoming culture within the industry. Colleagues both inside and outside BAT invest in the development of early career scientists, and there are lots of [ways] to get involved externally through technical organizations like CORESTA. It’s a great environment in which to build your professional network.

    Anais Hoffmann, analytical scientist: I was interested in science from a young age and was drawn to physics. I remember collecting anything to do with planets and space as a child—and then getting into chemistry. The decision to go into science was made by discovering forensic chemistry, which is a fascinating area. I was drawn to the tobacco industry for its vastness in terms of products and in terms of scientific capabilities. All my experiences were very complementary—I have a background in forensic science and biophysics—and think it was very helpful to me.

    Cristelle Antunes Santos, toxicologist: Science was the only option on the table for me. It was a natural choice from a really young age.

    Isn’t it an exciting world right now? Nowadays, we have so many innovations in the market that give consumers a greater choice than before. As toxicologists, we conduct risk assessments, generate toxicological limits and take decisions about consumer products.

    BAT has exceeded my expectations in both the quality of the science produced and the career opportunities available.

    Emma Cheung

    Can you tell me more about your work?

    Cheung: A main part of my role is to develop and deploy biological testing techniques to assess our products and provide supportive data to our Consumer Product Safety colleagues. We also publish our in vitro data in peer-reviewed journals.

    Hoffmann: I’m an analytical scientist, which means I work with techniques aimed to detect and measure different entities (compounds and materials). For me, it’s the sudoku/puzzle area of chemistry. The other aspect of my work is project management. I therefore divide my time between laboratory work and desk-based work. This is also dependent on the projects I am working on.

    Santos: We identify possible risks by thorough assessment of our products throughout the development lifecycle. We identify the appropriate scientific package that will allow us to evaluate any potential concerns. It has also been seen through the years how continuous innovation is leading to more options for our consumers to choose from.

    How do regulations and the differences in regulations across the globe affect your work?

    Hanna: I have spent most of my career focused exclusively on U.S. regulations, but with the opportunity to participate in a multi-year international assignment based in the U.K. R&D Centre, I’ve gotten to think about regulations with a global lens. It has been a great learning experience to better understand how an international organization balances the needs of 180 markets and supports the regulations across all of them. Moving from exclusively a U.S.-based regulatory construct to considering the requirements across so many markets has helped me think differently about how I approach my work and respond to challenges I encounter.

    Santos: BAT readily contributes to the debate and offers experience and expertise to governments and regulators to help address key issues. The U.K. is an excellent example of what can happen when toxicologists and regulators discuss science and the impact on the population.

    Summer Hanna

    How frequently do you collaborate with other scientists in other specialties, either within your company or globally?

    Cheung: R&D is very collaborative between people in different departments. We usually work between teams to complete projects. We also have collaborative links to our U.S.-based site and other competitor companies.

    Hanna: I’ve had the opportunity to collaborate with other scientists, internally and externally, throughout my career and continue to do so on a near daily basis. BAT’s R&D facilities in the U.K., U.S., Brazil and Germany allow for continuous global collaboration internally. We regularly have projects which depend on an international effort with a cohesive team mindset supported through scientific dialogue. Externally, I’ve participated in Coresta working groups, which are comprised of global teams of scientists, presented at international conferences such as GTNF and been active in the development of international technical standards via ISO/TC 126, which is comprised of 71 different National Standard Bodies.

    Hoffmann: In my current role, I have the opportunity to collaborate with different teams within the company, which is really interesting and enjoyable.

    Santos: As a toxicologist, we need to bring together a wide variety of expertise, including chemistry, biology, microbiology and many others. As it is impossible to be an expert in every field, we constantly seek support from these specialized professionals and incorporate their expert opinions into our assessments and recommendations. This very close relationship is extremely important to the development of our products.

    Anais Hoffmann

    What obstacles have you faced in your career? Do you feel like any of these obstacles are the result of being a woman in a traditionally male-dominated field?

    Haswell: Becoming a parent is tough, and it is hard to balance home and work life. But the recent Covid situation has shown us all new ways of working and managing our work/life in a flexible environment. I hope some of these solutions will help parents find a better balance.

    Cheung: I don’t think any obstacles I have faced have been particular to this industry. I think the attributes that make me a good scientist (quiet, reflective and analytical) can sometimes be seen as career-limiting in a business environment as it can be difficult to push yourself forward. This is something I particularly struggled with in my early career—how to be true to myself but also ‘raise my profile’ in the business.

    Santos: I haven’t faced many obstacles throughout my career. As a student in different European countries, I have always observed a very low number of male colleagues compared to females. In Southampton’s R&D, I feel that gender is very equal. In engineering departments, there are more men than women but, for example, in my toxicology department, the team are 60 percent women, and I think many of the senior positions in the department are occupied by women as well. I believe this is a trend that we see in biological and biomedical sciences, but this is definitely not the reality in the STEM space as a whole.

    Cristelle Antunes Santos

    Have you seen a shift in focus as the industry, and companies as a whole, have put more pressure on themselves to create a more diverse and inclusive workforce?

    Haswell: As long as I have worked at R&D, it has sought to be a diverse community, and this makes R&D a really interesting place to work and grow. The better we become at being a more diverse and inclusive workforce, the broader the range of experience and expertise we will have. And it will be great to be able to collaborate and capitalize on that.

    Cheung: BAT has launched many campaigns and initiatives to promote diversity and inclusivity. As a global company, there are many opportunities for people to work in different geographical locations, which promotes diversity of culture and thinking.

    Hanna: BAT has made diversity and inclusion a key part of the new company ethos. I think that really demonstrates that there’s a commitment from the top down to recognize and value different perspectives and experiences as part of how we operate. Within BAT, there are numerous company-sponsored organizations, such as B United, which supports the LGBTQ+ community, the Women’s Employee Resource Group or our Strength from Diversity team, which all help to support a more inclusive and engaged workforce.

    Hoffmann: I’ve seen an increase in focus, in general, to promote diversity and inclusivity in the workforce, either with communications, events or representation either internally or externally. Women in science, for one, is something that has a good coverage. Other communities also start to have more focus and representation, such as the LGBTQ+ community—at BAT we have the B United network, which is great.

    Have you seen a change in women working in STEM, and what does that look like?

    Haswell: R&D has some great female role models, and their support and encouragement has been invaluable to me during my career.

    Cheung: I have seen an increase in communication around supporting return from maternity leave and being given the flexibility to be able to work from home when children are ill rather than taking holidays or unpaid leave, which shows progress in this area. Sharing of parental responsibilities has also gained traction with shared parental leave gaining in popularity to enable the father to take part of the traditional maternity leave.

    Hoffmann: I have come from a university (Universite Pierre et Marie Curie in Paris) with a good balance between male and female students across all fields, which from my point of view shows that the interest for science has always been present, no matter the gender. As a result, I don’t think that the increase of women in STEM is a change in women’s career interests but more due to an increase of opportunities given to women in those fields as well as better communication, representation and focus in areas that were historically only represented by men.

    Santos: Out of the four STEM fields, I believe science has a better gender balance than the other areas, and this is probably why I have not faced the same challenges that some women in engineering or technology have. Society still has work to do, and we need to make sure everyone has access to equal opportunities.

    How is the industry helping to normalize and promote women in STEM?

    Cheung: At my level, I don’t think there is a gender bias, however, it’s fair to say there are less women in senior positions than men when you look at big organizations. I think this is the case across many industries, and sometimes women feel the need to park their career progress at a certain point to balance family pressures. BAT supports having a work-life balance, and initiatives like Parents@BAT is a good example of this in action.

    Hanna: When I started in the industry, Susan Cameron had just retired the first time as CEO, and starting your career as a young woman in a company with the first female CEO of a major tobacco company was inspiring. For her to return as CEO a second time, having an executive leadership team with significant female representation and then conduct the third woman-to-woman CEO handover in the history of the Fortune 500 fostered an environment in which women in the workplace could see real opportunity for themselves. That sort of legacy becomes part of your company culture, and so while the industry may have been historically male-centric, my experience has been that there’s a real commitment to implementing company practices which promote equity across the board for all women in the workplace, not just those in STEM professions.

    Hoffmann: I think there is a spotlight on Women in STEM, with regular articles and coverage of women working in those fields. The rise of the movement combined with internet and social media allows for more networking as well. This allows people to have more access to information about different fields of science that would have not been available prior to the Women in STEM movement.

    The representation and diversity within the Women in STEM movement is empowering.

    A focus on women having (or having had) successful careers in STEM is also very inspiring as it allows women of all generations to have great role models. I personally had the chance to attend a university named after Marie Curie, located next to the institute where she conducted her research, and she was definitely an inspiration.

    I didn’t find it difficult to establish a career in the tobacco industry, which is great. I spent some time on a military base as part of my forensic science background. This was my first scientific workplace experience, and it was quite a male-dominated field. As [a] result, being a civilian, a female and with no prior experience, this was impressive and daunting. I was, however, included quite easily in those fields, mainly due to my scientific knowledge and contribution to the projects I was working on, but [I] also think my personality was a huge factor, and I can appreciate that some obstacles can be encountered by other women.

    Santos: BAT has launched and supported many diversity initiatives; Women in STEM is one of many. We are such a multicultural company, and diversity is a key element of our DNA. Specifically on gender, BAT has many initiatives in place in order to promote diversity within the group. I do not think that women in BAT nowadays feel that it is harder to establish a career than in other industries—at least I feel that I have always had the same opportunities as my male colleagues.

     

    Where do you see the biggest gaps in regard to women in STEM? How do you think the industry or companies could help bridge these gaps?

    Cheung: If you have responsibilities at home, you can’t always stay late in the office; however, many people catch up in the evenings at home. In the past, I think this hasn’t always been acknowledged because it’s not seen. However, in the post-Covid world, I think this is changing, and there’s traction to the idea that people can work effectively from home and in the office.

    Santos: I think everyone and every company still has a lot of work to do. But my experience has been very positive, and from the very first day I joined BAT, I looked at the female leaders and immediately thought, “I can be like them one day.” This is a very important point that sometimes we underestimate—the power of a mentor or role model in our careers. One of the greatest things about working at BAT is the welcoming and friendly work environment. The flexibility, medical leave policies, equal maternity and paternity leave, zero tolerance for discrimination and harassment should all be considered as priority to every company in order to retain good employees.

    What are you excited about in the changing industry—either diversity and inclusion related or project/product related?

    Cheung: The pace and thinking of the company have really changed since we have branched out into our new category products and brought in different skill sets to match this change in our product portfolio.

    Hanna: I am excited to be a part of the industry in a time of such rapid transformation—not just in what our workforce may look like but also how we think about our products and ourselves as an industry. Every day presents new challenges and opportunities.

    Hoffmann: I like diversity and collaborative work. I particularly enjoy the different perspectives and points of view it can bring, whether project related, work related or people related.

    Santos: I am certain that we will start seeing more innovations, more advanced products, lots of different options, new formats, colors and flavors.

    Do you have a favorite project that you’ve worked on?

    Haswell: It has been really great to see our science grow and progress over my time at BAT, so one of the achievements I am proud of is the longer-term exposures we have done recently. We believe it’s important to look at the effects of repeated exposure on human lung cells using in vitro methods. It was a complex project with lots of challenges along the way, and being able to take that project from initial concept through the work in the lab and finally seeing the results at the end was something I feel was a great achievement.

    Cheung: We have had our first publication on modern oral products accepted in Food and Chemical Toxicology Journal. This is a new category for the company, and it was exciting to develop the method for assessing this product type.

    Hoffmann: All projects I have worked on are quite dear to my heart, but generally, the ones I have enjoyed most were the ones where I had to collaborate with multiple teams and multiple stakeholders. They often offer the opportunity to combine laboratory work, fundamental science and project management, which are three different aspects of my work. They are quite different, and translating scientific language to business-relevant language is sometimes a bit challenging, but it is something I enjoy.

     

    What advice would you give to someone considering your field of study?

    Haswell: The advice I would give to anyone interested in a career in science is follow your passion and do what you love. For me, being a scientist is a privilege that I don’t take for granted as not everyone gets to do what they love as a career.

    Cheung: If you have an interest in industrial science, go for it. There are lots of opportunities in the industry for both scientific and personal development.

    Hanna: Science is an incredibly dynamic, exciting space to work in. Some days it can be challenging, and like anything else, there will be days when you want to walk away. However, if you stick with it, the days where things come together make it worth the work.

    Hoffmann: My advice would be [to] follow your instinct and believe in yourself. I’m a firm believer that when there’s a will, there’s a way! 

    Santos: Toxicology is an exciting and very challenging field. If you want to work in an area where you can work on lots of different challenges, you should definitely consider toxicology. We use robust science and our expertise. Toxicology is an area where the demand will not stop growing in the coming years, and academia should take the lead in keeping toxicology programs available to young scientists.

  • Up to the Task

    Up to the Task

    Alliance One International and other reputable leaf merchants are working hard to ensure the children of their contracted farmers are at school rather than in the tobacco field. (Photo: Taco Tuinstra)

    The elimination of forced labor in the tobacco supply chain is a top priority for Alliance One International.

    By Kenneth Robeson

    It’s a problem that can’t be ignored: a lot of the tobacco industry’s leaf is sourced in developing countries with loose labor laws and/or weak enforcement mechanisms. For example, last November U.S. Customs and Border Protection (CBP) issued a “withhold release order” on imports into the U.S. of tobacco from Malawi based on a suspicion that forced labor was used in Malawi to produce the country’s tobacco crop.

    The U.S. Tariff Act defines “forced labor” as “All work or service which is exacted from any person under the menace of any penalty for its nonperformance and for which the worker does not offer himself voluntarily.” The term “forced labor or/and indentured labor” includes forced or indentured child labor.

    Forced labor, says Nate Peeters, a spokesman for the Office of Public Affairs for the CBP, is “a global challenge that is not limited to a single industry, product or region. The International Labor Organization (ILO) estimates that forced labor affects nearly 25 million people and generates an estimated $150 billion in profits every year.”

    Indeed, forced labor is a global challenge that hurts millions of workers each year. The State Department’s annual Trafficking in Persons Report and the Department of Labor’s International Child Labor and Forced Labor Reports offer specific information about countries and regions in which forced labor occurs. CBP issues withhold release orders based on allegations that forced labor was used to produce goods that are imported or that may be imported into the United States. Since September 2019, CBP investigated allegations of forced labor and issued withhold release orders on such products as hair accessories and garments manufactured in China, bone char produced in Brazil and disposable rubber gloves from Malaysia.

    “Forced labor is a human rights violation that is antithetical to American values,” Peeters points out. “Companies that engage in forced labor subject their workers to threats of physical and sexual violence, withholding of wages, restriction of movement and other abuses. Moreover, imported goods made with forced labor undermine the ability of similar American-made products to be sold at a competitive price.”

    Top priority

    Michiel Reerink

    To combat forced labor and other human rights violations in the tobacco business, leading leaf merchants, such as Alliance One International (AOI), are going to great lengths to ensure their supply chains comply with the highest standards.

    The elimination of forced labor in global tobacco production “is a top priority for Alliance One International and all of our subsidiaries,” says Michiel Reerink, international corporate affairs director for AOI. “As part of our long-standing commitment, we purchase the vast majority of our tobacco through direct contracts with farmers, which helps ensure the crops we purchase are grown in compliance with our human rights policy, child labor policy and agricultural labor practices [ALP] program.”

    Having found that poverty is a leading driver of forced labor globally, he continues, “we work closely with farmers to improve their crop quality and yield, thereby enhancing profitability. This can be one of the best long-term solutions [to creating long-term change]. Visibility into the supply chain is also important when addressing these issues.”

    AOI’s team of field technicians works closely with contracted growers to identify the root causes of these issues and collaboratively develop an action plan that allows for true change to be implemented. In some cases, those root causes are systemic and involve cultural or regulatory issues that need to be overcome through long-term interventions and multi-stakeholder groups.

    The company records farm-monitoring visits, including labor incidents, in its Sentri traceability platform. “This allows us to follow up with farmers to ensure action plans have been implemented and problems addressed,” Reerink explains. “In addition, it allows us to aggregate the results to focus our education and training and related CSR programs at the country/community level.”

    Following this year’s withhold release orders on tobacco from Malawi, AOI has demonstrated to the satisfaction of CBP that there is no forced labor in its Malawi supply chain. In response, CBP lifted its restrictions on AOI imports of Malawi tobacco into the United States. As of June 3, 2020, tobacco imported from Malawi by AOI is again admissible at all U.S. ports of entry.

    “From our perspective, labor challenges can be found throughout the global agricultural supply chain,” says Reerink. “Regardless of the country in which we are operating, we work with our contracted grower base to ensure their crops are produced in compliance with our various policies and programs which are aligned with the objective of eliminating forced labor.”

    Reerink and his colleagues recognize that improving agricultural practices can take time, “particularly when we are attempting to change long-standing cultural practices, and we work with our contracted growers to implement new measures in ways that provide tangible benefits to them.”

    In 2011, AOI introduced its ALP program worldwide. The standards in the program were designed to meet ILO standards. Through the program, the company monitors contracted farmers for compliance with numerous requirements to ensure the rights of farm workers are respected. Its policies and programs create a comprehensive framework that includes, among other restrictions, a prohibition against allowing anyone under the age of 18 to conduct any hazardous tasks, and utilizes a combination of grower education and training, farm monitoring, third-party audits and third-party stakeholder engagement to document and improve compliance.

    For example, in Malawi, AOI personnel conduct farmer training and education in group settings as well as one-on-one during frequent farm-monitoring visits. In 2019, representatives visited each contracted farmer an average of 10 times per season. In 2019, they conducted over 139,000 individual farm visits there in a combination of announced, semi-announced and unannounced visits. Adds Reerink, “To help enhance awareness and comprehension of ALP, the local Alliance One Malawi team also created radio broadcasts and drama performances to expand understanding of the risks of child labor into the community.”

    Multi-stakeholder involvement plays a key role in improving labor practices as they are often tied to long-standing cultural traditions. For example, once again in Malawi, in 2019 Alliance One Malawi established 179 ALP Village Committees involving farmers, village headmen, teachers and religious leaders trained by company staff. These committees were set up to promote public discussion about ALP, help farmers improve agronomic practices by gathering and sharing information, and encourage community buy-in, accelerating the implementation and acceptance of ALP among farmers and supporting ALP compliance within the community.

    The protection of human rights is an agricultural sector issue, Reerink points out, not specific to the tobacco industry. “Some tobacco industry suppliers, including Alliance One, have taken actions with their respective contracted farmer bases that have led to significant improvements in the experiences of farmworkers. However, without the alignment and support of other tobacco suppliers and supply chains for other crops, implementing long-term solutions becomes much more of a challenge.” It will, he feels, take a continued multi-stakeholder effort to truly drive long-term change in labor practices and address some of the systemic challenges facing the agricultural supply chain.

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    Clear and direct message

    The battle against forced labor is ongoing. CBP has a unique statutory authority to prevent goods made through forced labor from entering the United States. Its Office of Trade investigates allegations of forced labor and if substantiated, directs enforcement actions. CBP issues a withhold release order when it has information that reasonably indicates that goods produced using forced labor may be imported into the United States. These orders instruct CBP personnel at ports of entry to detain shipments that contain goods manufactured in whole or in part with forced labor. Withhold release orders “send a clear and direct message to the trade community that CBP will not tolerate forced labor in U.S. supply chains,” Peeters says.

    Industry, Peeters suggests, has “the duty to exercise reasonable care and due diligence to ensure that goods produced with forced labor do not enter their supply chains. Companies are on the frontline and should use all available information about the conditions of forced labor in countries where goods are sourced from to ensure they do not import goods produced with forced labor.”

    Maintaining transparency of company supply chains can help companies identify and remediate forced labor found in supply chains. CBP will continue to investigate allegations and pursue enforcement actions where evidence reasonably indicates that goods are manufactured with forced labor imported to the United States.

    Getting consumers involved

    Consumer awareness, CBP’s Nate Peeters insists, is essential for eliminating forced labor.

    “Companies will not sell products that consumers do not buy,” he notes. “CBP urges consumers to ask for more details about where and how their products are made and to use their economic power to tell companies that forced labor is against American values.”

    Generating and sustaining consumer awareness “is a challenge,” notes Peeters, “but one that is essential to addressing forced labor in U.S. supply chains.”

    CBP has been working with its nongovernment and media partners to communicate forced labor enforcement actions to U.S. consumers through press releases, social media content and TV and radio appearances. It also continues to communicate frequently with the trade community about forced labor concerns and measures that companies can take to ensure that they have clean supply chains.

    The agency urges consumers to ask for more details about where and how their products are made. “The great deals that can be found online and in stores may be inexpensive because the products were made through modern slavery,” Peeters points out. “Americans can use their economic power to tell businesses that we will not tolerate forced labor in U.S. supply chains.”

  • Recon Mission

    Recon Mission

    Photos: SWM International

    LeafLAB has revolutionized the all-natural hemp and CBD markets with its new, consistent and high-quality hemp-based botanical recon product.

    By Timothy S. Donahue

    Regulation is coming for the cannabidiol (CBD) industry. The U.S. Food and Drug Administration (FDA) has said that it recognizes the opportunities that cannabis or cannabis-derived compounds may offer and acknowledges the significant interest in these possibilities. However, the FDA is also aware that some companies are marketing products containing cannabis and cannabis-derived compounds in ways that violate the Federal Food, Drug and Cosmetic Act.

    To prevent the health and safety of consumers from being placed at risk, the federal agency plans to regulate CBD and other consumable hemp products. It is expected that the FDA will regulate smokable CBD products much in the same way that it regulates traditional tobacco products. That means a product must be consistent and able to be tracked and traced back to the farm level. This could present several challenges for manufacturers, especially when trying to find consistency in quality and quantity of CBD and other variables in cannabis plants for smokable flower products.

    LeafLAB, the botanical-based brand of SWM International, a manufacturer of tobacco papers and reconstituted tobacco technologies, can produce reconstituted cannabis substrates to use in the production of smokable CBD products and accessories. Among its many specializations in plant-based botanicals, LeafLAB produces product from all-natural industrial hemp biomass that complies with all regulations for THC content of less than 0.2 percent. The company also produces industrial hemp-based filtration media and papers for cigarette paper and traditional roll-your-own (RYO) applications, not to mention technical support, service and a global reach to its customers.

    “We’re taking the knowledge and experience of our leadership in the tobacco industry to help bring a new market to fruition through the addition of new product opportunities for the existing consumer and our direct customer base,” says Alex Boone, director of alternative products for SWM. “Centuries of tobacco experience can now be used for those same components used in tobacco products but now replacing tobacco with all-natural industrial hemp-based raw materials.”

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    Distinct parallels

    Hemp wraps

    LeafLAB’s ties to the tobacco industry play a pivotal role in the development of its smokable hemp products. “We believe the technologies and knowledge that we’ve developed over time in tobacco have a distinct and valued parallel for this new industry. Today, 45 percent of the legal cannabis market is still flower—smokable flower,” says Boone. “Not only have we created hemp-based botanical wraps to support the current combustible flower market, but our cut rag filler products allow our customers another opportunity to offer completely distinct product lines, including tobacco-free alternatives to mainstream cigarette smokers.”

    LeafLAB specializes in all-natural products. Boone explains that with today’s lifestyles leaning toward more all-natural products, there are not many options beyond smokable flower. LeafLAB makes hemp products better through a patented process technology that eliminates the necessity for chemical additives, says Boone. Through its botanical process, LeafLAB uses legal cannabis flower to create smokable products efficiently using the same high-quality systems of infrastructure and quality control that is used in the tobacco industry.

    “Instead of using hemp from just the stalk as is done in many textile and paper making processes, we are using the raw leaf and flower biomass to produce our product, and that’s the key. It’s naturally aromatic; you can still smell, and to a lesser degree taste, the natural terpene profile of the raw material. Many of our customers have said that our product looks, feels and smells like real hemp. That’s because it is—and all of this without a papery taste. By being neutral, our customers can apply their own terpene and or flavor profile,” Boone says. “The range of tastes from the consumer are infinite. From high terpene profiles to match cannabis-like flavors to heavy fruit and honey-based products for others. However, what they all want is something natural. Now, we can do that in a 100 percent hemp product that is completely tobacco and nicotine free.”

    SWM’s Ancram Mill

    Advances technologies

    Over the last year, LeafLAB has developed advanced processes for making products such as hemp leaf and flower-based blunt wraps and cones and for machine-made CBD cigarillos (hemp pre-rolls). “We have a whole line of RYO hemp wrappers that complement our traditional lines of cigarette paper and RYO papers that can be used on machines to roll these new hemp sticks,” explains Boone. “In addition, we have an all-natural hemp-based filler or cut rag that is 100 percent hemp ‘recon’ in which terpenes, flavors and CBD can be added for mass market stick production where controlling levels of active ingredients is essential for meeting future potential regulatory control.”

    SWM invented the reconstituted tobacco market in the mid-1950s, first with binders and wraps for machine-made cigars and later as a filler used by tobacco blenders, not only as a recycling option for expensive virgin material but also as a tool for blend design optimization through higher filling power and to control consistency from one tobacco crop year to the next.

    “Much like in tobacco, LeafLAB’s hemp-based filler can use distinct blends to create this same consistency for its customer’s products year after year,” says Boone. “In addition to our cut rag offering previously mentioned, our hemp ‘recon’ is also a great blender with hemp flower allowing for better control. That blending not only enables a manufacturer to be able to blend from one crop to the next but allows for usage of high-speed machinery and control of sensory properties. Our recon substrates allow for excellent retention of flavor and active ingredients.”

    LeafLAB uses specific biomass from suppliers or biomass that is directly specified by its customers. Boone explains that LeafLAB gives manufacturers that choice because many customers want that “farm-to-table” experience for their consumers. “We are also very choosy in the consistency of our raw materials. High leaf and flower content and low stem—that is the perfect fit for our process to allow for the best opportunity for paper forming characteristics and taste,” he says. “Regardless, all raw materials go through an extensive laboratory and taste profile testing prior to use in a commercial setting. Additionally, we require our suppliers to provide a full spectrum analysis—pesticides, heavy metals, THC/CBD content, etc.—and farm traceability of each biomass shipment. Our customers can be assured we are setting the appropriate standards necessary for safe and reliable products.”

    Runnability

    Alex Boone

    The ability to have a hemp product work well on current cigarette rolling machine designs is important. Raw hemp flower is typically too sticky and granular to be used in traditional tobacco rolling machines. Boone says that LeafLAB’s hemp sheets help meet the needs necessary for bringing smokable hemp to a mass market.

    “Today, legal cannabis runs very slowly on traditional cigarette machines. We estimate somewhere in the 300 sticks per minute range. This is not efficient for high-speed makers. We understand there is new machinery under development that is beginning to make the process easier. These new machines will run up to 1,500 sticks a minute and greatly improve pre-roll stick production,” says Boone.  “With our product, you can run as high as 6,000 sticks per minute using our hemp wrapper and hemp cut rag combination and perhaps higher running a 100 percent hemp cut rag. Now, you are able to achieve the speeds of traditional cigarette production. So, suddenly, you can build to scale smokable hemp products that you otherwise could not have. This is a game changer.”

    LeafLAB started in 2014 as a botanical innovation platform for SWM that was geared toward using something other than tobacco to bring new products to market. LeafLAB started with reconstituted tea and moved on to reconstituted mint, sage and even cocoa, to name a few. “Today, we have a line of packaging paper using cocoa shells as its base material called Cocoa Paper,” adds Boone. “It’s really rather cool.”

    With the tobacco industry in decline, Boone said LeafLAB was a catalyst to start using the knowledge and experience of SWM to invent new products, such as the recon-style tobacco substrates used in heated-tobacco products (HTP). Today, this dedicated form of recon is an essential component of the consumables used. Currently, LeafLAB has 15 patents and over $7 million invested in its product development.

    Packaging is also important when developing a brand of products. That packaging can be designed to have a familiar feel to the end user. If someone is using smokable CBD to help stop smoking nicotine cigarettes, for example, having the same style of packaging and consistency of product are major influencers of getting a consumer to commit to a brand, according to Boone. “We’re suggesting that, if you have a product that’s consistent—you can control it—you can get that into the mainstream market,” he says. “You can also make it taste like tobacco if that’s what’s desired.”

    Looking ahead, Boone says LeafLAB will continue helping to improve the commercial hemp industry by teaching the supply chain how to conform to its legacy business quality control and proven SWM protocols coupled with the requirements of the non-THC legal cannabis industry. “We’re blending those two to have a very good quality product that follows strict standards and where our customers can trust in our COA [certificate of analysis] that says, ‘This is California regulation compliant’ or ‘this is FDA complaint’ when the time comes. That is the ultimate goal,” Boone explains.

    Moving past the unknown regulatory environment, Boone says there is plenty of opportunity for LeafLAB’s products throughout the world. “We’re watching Europe. I would say that the U.S. and Canada are growing quickly—plus 18 percent CAGR [compound annual growth rate]. The next major markets in [the] EU are Luxembourg, Belgium, Spain and Germany,” he says. “South Africa just issued industrial hemp legislation but remains conservative in their approach. Overall, it will take time, but we are bullish on growth of legal smokable hemp products.”

    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.
  • Tobacco to Dominate Vapor Business Post-PMTA

    Tobacco to Dominate Vapor Business Post-PMTA

    Photo: Ethan Parsa from Pixabay

    Tomorrow’s deadline for the submission of premarket tobacco product applications (PMTAs) to the U.S. Food and Drug Administration (FDA) marks the start of a new era for the e-cigarette industry, according to an article published by The Motley Fool.
     
    Companies who fail to apply for marketing authorization by the deadline will be required to remove their hardware and e-liquids from store shelves, and The Motley Fool expects many e-cigarette companies to exit the business.
     
    Because the cost of complying with the regulations is staggeringly high, many manufacturers will not be able to make it over the hurdle, and the e-cigarette market will be left largely to the tobacco giants.
     
    Although the FDA estimates a single PMTA costs anywhere from $117,000 to $466,000, those figures are considered low by the industry. The Rocky Mountain Smoke-Free Association estimates a single PMTA costs between $8.6 million and $11.1 million per stock keeping units. It forecasts 14,000 small vape businesses employing 166,000 workers will be destroyed, representing $24 billion in economic activity.
     
    Deep-pocketed Philip Morris International, by contrast, already has four separate PMTAs approved: one for its IQOS heated-tobacco device and three for flavors of its disposable HeatSticks.
     
    As of Aug. 31, the FDA had received applications for around 2,000 deemed products, of which around 40 percent have been resolved, according to Mitch Zeller, director of the agency’s Center for Tobacco Products.

  • Eyes on the Ball

    Eyes on the Ball

    Photo: PMI

    Even as cigarette dollar sales increase during the Covid-19 pandemic, IQOS expansion remains Altria’s primary focus.

    By Timothy S. Donahue

    Covid-19 has slowed the traditional decline of U.S. cigarette sales. With less opportunity to spend on travel and entertainment, consumers have had more money to purchase tobacco products, according to Billy Gifford, CEO of Altria Group. Since the start of pandemic lockdowns in mid-March, traditional cigarette sales have increased over the same period last year, breaking a longstanding trend.

    During Altria’s second-quarter earnings call, Gifford said that the cigarette category has proved resilient during the pandemic. Based on year-to-date industry volume performance, the largest U.S. cigarette manufacturer has adjusted its estimated 2020 volume decline rate to a range of 2 percent to 3.5 percent, down from its previous estimate of 4 percent to 6 percent. The company also increased its annual dividend by 2.4 percent, saying it had more clarity on the pandemic’s effects on consumer demand. It is the company’s 51st consecutive annual dividend increase.

    “Remember, last year, the cigarette category peaked its decline at 6 percent, then it receded to 5.5 percent in the third, and then down to 4.5 percent in the fourth,” Gifford said. “So a little bit tougher comparisons were also included in that forecast. But it’s a fluid environment and it’s something that we’ll continue to monitor.” Altria’s forecast was lower than its prior outlook, which was withdrawn due to the uncertainties around the pandemic’s economic impact.

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    Cigarette sales have seen a series of ebbs and flows through the first half of 2020. When some U.S. state governors began issuing stay-at-home orders in mid-March, combustible cigarette sales volume rose 1.1 percent for the week that ended March 22, according to Nielsen. Those sales were likely generated by consumer stockpiling, according to Gifford. For the four-week period that ended May 16, Nielsen reported only a 0.2 percent decline in sales volume for traditional cigarettes. Comparatively, sales volumes in 2019 fell 8.8 percent over the previous year (2018) in the four weeks to March 23, according to Nielsen data.

    Bonnie Herzog

    Bonnie Herzog, managing director at Goldman Sachs, stated in an email that the cigarette category is now holding steady. All channel cigarette dollar sales growth was up 3.1 percent for the two weeks ending on July 25. “Higher pricing more than offset a deceleration in cigarette volume, which was down 2 percent during the same time,” she said.

    The pandemic is not the only factor driving increases in cigarette sales. Gifford says restrictions on e-cigarette flavors and the Sept. 9 deadline for premarket tobacco product applications (PMTA) to the U.S. Food and Drug Administration (FDA) have come together to create a perfect storm that is driving vapers back to combustible cigarettes.

    Gifford told listeners that Marlboro’s second-quarter retail share for the overall cigarette category was 42.8 percent, down six-tenths versus the year-ago period. In April, Altria reported that older smokers who had switched to e-cigarettes were turning back to traditional cigarettes because of negative news coverage and regulatory crackdowns on vaping.

    “As you’ll recall, earlier this year we noted an increase in the number of adult smokers aged 50-plus who moved from the e-vapor category back into cigarettes benefiting volumes from Marlboro and the cigarette category,” he said. “This demographic has a greater tendency to purchase discount brands than younger adult smokers, which increased the discount segment share at the start of the year. We believe the effect of this dynamic will have a lingering impact on Marlboro’s year-over-year retail share comparisons through 2020 … when you think about that, it’s a bit early on to tease out the exact impact from both of those, but that’s something that we’ll continue to monitor as we move forward.”

    Altria’s headquarters in Richmond, Virginia, USA
    Photo: Altria Group

    Looking toward the second half of 2020, Altria has high hopes for its IQOS heat-not-burn device. On July 7, the FDA issued exposure modification orders to IQOS. Gifford said he was pleased with the FDA authorization to market IQOS as a modified-risk tobacco product (MRTP) with a reduced-exposure claim. The FDA’s decision includes the device’s holder and charger as well as Marlboro HeatSticks, Marlboro Smooth Menthol HeatSticks and Marlboro Fresh Menthol HeatSticks.

    IQOS is the first next-generation product to receive an MRTP. In a statement, the agency concluded that the available scientific evidence demonstrates that IQOS is expected to benefit the health of the population as a whole, taking into account both users of tobacco products and persons who do not currently use tobacco products.

    According to the FDA website, a reduced-risk claim authorization would generally allow a company to say a product is less harmful than combustible cigarettes. However, according to the FDA, the current reduced-exposure claim authorization allows the manufacturer to only state that IQOS heats rather than burns tobacco and significantly reduces the production of harmful and potentially harmful chemicals. The decision follows a review of the extensive scientific evidence package Philip Morris International (PMI) submitted to the FDA in December 2016 to support its MRTP applications.

    IQOS is produced by PMI and marketed in the U.S. by Philip Morris USA (PM USA), a subsidiary of Altria Group. Gifford said PM USA is making the necessary preparations to communicate the reduced-exposure claim to adult smokers, which includes developing new marketing assets and submitting them to the FDA in advance of being used.

    “We’re looking forward to communicating with adult smokers the additional benefits of switching to IQOS. We’re excited to get back on track with our IQOS rollout and our future expansion plans to accelerate adult smoker conversion,” he said. “As many parts of the country began lifting restrictions in June, PM USA reopened the Atlanta and Richmond IQOS boutiques and just last week launched IQOS in its third lead market by opening a boutique in the SouthPark mall in Charlotte.”

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    Over the next 18 months, PM USA plans to launch IQOS in four new markets with large adult smoker populations and expand the availability of IQOS devices through retail partnerships, explained Gifford. PM USA also plans to expand its HeatStick distribution to the surrounding geographies in all seven IQOS markets. He said the commercialization approach for IQOS is designed to maximize the organic growth potential of the device by focusing first on the densely populated metro areas and then expanding outward as the user base grows.

    “In Charlotte, PM USA launched a more disruptive retail fixture that communicates the benefits of real tobacco, no ash and less odor and expects to begin HeatStick distribution to retail stores in the next few weeks. By the end of August, we expect HeatSticks to be in a total of 700 retail stores across the three lead markets,” he said. “PM USA will continue to leverage its IQOS retail ecosystem, including IQOS mobile, pop-up and kiosk retail formats, which allows for more strategic and agile marketing plans. We’re making several digital enhancements to the IQOS website too.”

    The IQOS website now includes virtual tutorials, and a new expert video chat functionality will be available this fall, according to Gifford. These digital enhancements and “the ability to have devices delivered to smokers in lead markets with the proper age verification” will provide smokers with a variety of options to “learn about and access IQOS,” said Gifford, adding that PM USA expects to use its “first-mover advantage” to expand IQOS responsibly.

    “Our commercialization strategy is based on the learnings from our IQOS lead markets and PMI’s international results paired with our desire to continue avoiding use by unintended audiences. We believe that a sustained focus on the consumer journey from awareness to conversion is the key to achieving our vision,” Gifford said. “Word of mouth among IQOS users and their fellow adult smokers has been a critical factor to the global success of IQOS.”

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    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.
  • A Journey, Not a Destination

    A Journey, Not a Destination

    Photo: BNS

    Navigating successful post-market requirements for ENDS products

    By Yvonne Wilding

    This month marks the deadline for submitting premarket tobacco applications to the U.S. Food and Drug Administration (FDA). Many organizations have worked diligently to ensure their submissions are as complete and robust as possible. Their goal is to ensure that they are sufficiently complete to allow acceptance for filing and, following substantive review, that the product may be granted a market order by the FDA, allowing it be sold in the United States. By early September, hundreds of PMTAs for electronic nicotine-delivery systems (ENDS) had been submitted to the FDA, and a number are currently undergoing substantive review.

    However, in this article I will remind applicants that their obligations do not stop at PMTA approval but persist for the entire life cycle of the product in market—and products can be removed from market potentially more easily than they can be brought to it.

    During its PMTA review, the FDA extensively evaluates the provided experimental data to make a risk-benefit assessment of the new product and ascertain its suitability to be designated as “appropriate for the protection of public health” (APPH).

    This includes scrutinization of the quality and compliance aspects of the manufacturing processes and review of extensive research information generated on the specific product to allow the FDA to evaluate any potential public health risks associated with the product. The research aspects are compiled by the applicant into different modules of the eTobacco Technical Dossier and include chemistry and manufacturing, toxicology risk assessment and clinical and human experience evidence.

    There will be a series of investigations in human volunteers to look at the pharmacokinetics (PK) of the product and its delivery of nicotine compared to comparator products. The PK profile of a product has the potential to affect the abuse potential—i.e., how easily someone may become addicted to nicotine. In addition, there will typically be several human behavior studies to check that the users can operate the device safely and effectively and to assess their preference for this product against competing products. Additionally, there is a significant amount of research done in never-smokers to ascertain how likely they are to start smoking with this product. The numbers of volunteers in the studies are often very large and care is taken to look not only at a representative U.S. population from their demographics but also to incorporate a significant number of young adults in order to be able to make extrapolations to a youth (11–18 years of age) population.

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    The research data provided to the FDA also includes extensive data on the performance of the device in laboratory-controlled conditions and its delivery of nicotine in each puff under different device settings and different coil components. Stability of the product on storage and extractables and leachables are measured, and quantitative data on the discharge of harmful and potentially harmful constituents (HPHCs)—a list of 33 chemicals of most toxicological concern detailed in the FDA guidelines) is collected. The toxicology and the chemistry data are linked to consumer behavior information and topography data to indicate how a consumer will use the product, enabling the estimation of the likely exposure to potentially hazardous aerosolized constituents and hereby the risk-benefit of this new product can be ascertained.

    Assessing the actual product though, is only part of the information required. The product must also be assessed for risk-benefit alongside data from existing relevant tobacco-containing products, much of which is obtained from scientific publications. These comparator products would typically be combustible cigarettes or similarly performing ENDS. It would be wrong to assume that ENDS are without risk, but in a PMTA, the risk relative to other comparator products, e.g., combustible cigarettes, is described. Based on this assessment of these actual and relative risk estimates, the FDA will decide on whether the product is APPH. This approval process can be considered the first step of the journey.

    There are several regulatory documents published by the FDA Center for Tobacco Products (CTP). These include Guidance for Industry and Proposed Rule, both of which have sections on post-marketing requirements, although most detail is provided in the Proposed Rule (Federal Register Vol. 84, No. 186, 25 Sep. 2019, Subpart D – Postmarket Requirements section, $1,114.39–$1,114.41).

    Having been granted a market order from the FDA, there is an explicit ongoing commitment for each approved SKU to collect and provide information and submit it for regulatory review. Following each review, the FDA will consider whether it is appropriate that the product is maintained in market. Reasons why the FDA may decide to remove a product from market could include any of the following: the product is no longer considered to be APPH; there is inaccurate representation of factual data, the applicant has not set up a system for maintaining records and/or fails to make appropriate records and submit reports.

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    The post-marketing updates required by the FDA can be put into three main categories: changes to manufacturing processes and controls; changes to the health risks associated with the product; and sales, distribution and marketing information.

    Periodic reports need to be submitted to CTP within 60 calendar days of the reporting dates which will be specified in the applicant’s marketing order and must include the following:

    Manufacturing and processes

    • A description of changes to the manufacturing, facilities or controls during the reporting period
    • An explanation of why the changes were made and why these change do not result in the generation of a new tobacco product that is different from the one for which the original order was granted

    Health risks

    • An inventory of ongoing and completed studies by or on behalf of the applicant that have not previously been reported
    • Full reports of information published or known, or which should be reasonably known, to the applicant concerning scientific investigations and literature about the tobacco product that have not been previously reported
    • Significant findings from publications not previously reported
    • A summary and analysis of all serious and unexpected adverse experiences reported to the applicant or that the applicant is aware of
    • A statement of any changes to the overall risk associated with the product and a summary of the health risks, including the nature and frequency of the adverse experience and potential risk factors

    Sales, marketing and distribution

    A summary of sales and distribution of the tobacco product for the reporting period to include:

    • Total U.S. sales and demographic characteristics of purchaser
    • Specimens of labelling and detail of any changes
    • Full-color copies of all advertising material used with dates of dissemination
    • A description of advertising and marketing plans
    • Actions taken to restrict youth access and limit youth exposure to labelling, advertising or promotion
    • Use of social media
    • Use of partners, influencers or bloggers
    • An assessment of the impressions left by advertising and audience demographics

    In addition to the above categories, there is also a requirement to provide any additional information specified or any additional requests under the terms of the marketing order and an overall assessment of how the product continues to be APPH.

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    As well as the requirement for regular submission of post-marketing reports, if there are any serious and unexpected adverse events reported to the applicant, these must be reported to CTP’s Office of Science via the Health and Human Services Safety Reporting Portal within 15 days of the applicant having received the report.

    There are strong concerns among the public, health policy makers and government that the potential health benefits of switching smokers from combustible cigarettes to a less harmful way of accessing nicotine may be dramatically offset by young nonsmokers being attracted to vapor devices and through use of these devices drive an increase in nicotine addiction in youth. Smoking volumes of combustible cigarettes have been falling for many years across the world, which will ultimately lead to significant improvements in health, although the evidence will take several years to become apparent. Understandably, there is much enthusiasm that the scourge of tobacco smoking-related diseases may be, if not eliminated, significantly reduced in future generations.

    It is in the interest of consumers who may wish to move to a safer form of nicotine intake that PMTA applicants are fully compliant with the post-marketing requirements and continue to work with the FDA and lobbyists to contribute to and maintain an appropriate balance of risk reduction and health benefit realization. If these products, stated to be APPH, are no longer available to consumers, then the consumers’ opportunity to potentially improve their long-term health outlook is diminished.

    Many of the larger companies manufacturing ENDS products may have specific regulatory compliance staff and sales and marketing departments that are fully trained, equipped and resourced to deal with the FDA requirements, but for the smaller organizations, without such infrastructure, this resource requirement, skill set, potential complexity and the associated costs, particularly if the organization has a large number of SKUs, can be particularly onerous.

    The cost and resource requirements of maintaining established products in market has been recognized in the pharmaceutical industry for a very long time. As pharma companies typically prefer to invest in novel medicine development or in the enhancement of existing medicines to provide patent life extensions, some older, established products are still very successful and so the maintenance of the post-marketing requirements of these products from a regulatory and pharmacovigilance perspective is often outsourced to specialist contract research organizations (CROs) who collect and report this data on behalf of the pharma companies. These CROs can provide the necessary resources, expertise and experience to make this a cost-effective solution.

    It will be interesting to see how many ENDS products are successful in receiving a positive market order decision from the FDA only to be subsequently removed from the market as they fail to satisfy their post-market approval requirements, causing these products to be potentially as ephemeral as the aerosols they disperse.

     

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    Yvonne Wilding is director of product safety and compliance at Broughton Nicotine Services (BNS). BNS operates exclusively in the ENDS sector. Its team of scientific and regulatory experts, backed by its in-house, custom-built contract research organization facility, understands customers’ specific challenges and opportunities. With expertise across the U.S. and EU for tobacco products, medical devices and pharmaceuticals, BNS is committed to working with customers to increase the value of their business and advance a smoke-free future. For more information, visit www.broughton.com.
  • Damage Done

    Damage Done

    Photo: Stefan Malloch | Dreamstime.com

    Even as last year’s EVALI crisis has abated, the misperceptions it created about vaping persist.

    By Stefanie Rossel

    Roughly a year ago, a mysterious lung illness struck thousands of U.S. vapers. Emergency room visits increased from July 2019 and peaked in September before ebbing off. By Feb. 18, 2020, 68 people had died from complications of the lung disease, which was quickly termed EVALI—“e-cigarette, or vaping, product use associated lung injury.”

    However, EVALI turned out to be a misnomer, and the mystery surrounding vaping illness was quickly resolved—although some experts took longer to recognize the obvious than others. As the Centers for Disease Control (CDC) eventually acknowledged, illegal THC-containing vapor cartridges, also known as carts, were the true cause of the vaping-related illness. They contained a new thickening agent, vitamin E acetate oil, that was used as a diluent for tetrahydrocannabinol (THC), the psychoactive substance in marijuana. By destroying the surfactant, vitamin E acetate oil prevents the lungs from working properly. In addition, when heated, the agent can form a toxin that affects the respiratory tract.

    Tony Abboud

    “It is important to note that vitamin E acetate, a component found in illegal black market THC cartridges, was identified by the CDC as a primary cause of EVALI—and not nicotine vapor, contrary to what was portrayed by the media,” stresses Tony Abboud, executive director of the Vapor Technology Association (VTA). “Industry standard FDA-regulated nicotine-containing vapor products were not involved, much less to blame for cases of lung illnesses in September of 2019.”

    Professor Michael B. Siegel from the Boston University School of Public Health was one of the first to hint at the fact that bootlegged e-liquids containing THC were likely to be the origin of the vaping-related illnesses and deaths. One year after the height of the crisis, he says, EVALI is no longer an issue. “Shortly before we all got distracted by Covid-19, we were already seeing a dramatic decline in EVALI cases. At this point, the outbreak seems to be over. Apparently, the use of vitamin E acetate oil as a thickening agent in THC vape cartridges has been discontinued and by now the remaining carts in the supply chain have been through the life cycle, so the problem is essentially over.”

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    Long-term impact

    But while the illness may have gone away, the impact of the way in which U.S. health authorities handled the crisis lingers on. From September 2019, the two U.S. leading health authorities, the Food and Drug Administration (FDA) and the CDC, issued contradicting advice. The FDA warned against vaping THC purchased from informal sources. The CDC, by contrast, didn’t publicly single out illegal THC liquids as the probable cause of EVALI until November 2019 and continued to caution against vaping all e-cigarettes until January 2020. There has been no official rehabilitation of the legal vapor business, and the sector continues to suffer from an underserved blemish.

    “Unfortunately, and quite sadly, the discovery and confirmation that vitamin E acetate oil thickener was the cause of EVALI has had virtually no impact on the communications that are coming from most state health officials and local health agencies and organizations,” says Siegel. “Very few, if any, state health departments put updates on their websites notifying consumers that the problem was discovered and that THC carts, not e-cigarettes, were found to be the problem. Massachusetts is a great example. The Massachusetts Department of Public Health—to this day—maintains the position that we have no idea what caused the outbreak. It has not corrected its errant and premature conclusion that this was due to e-cigarettes. And it has not issued a clear statement clarifying that the cause was THC vape carts. The majority of the public still believes that e-cigarettes were causing EVALI and have no idea that it was THC vape products.”

    This misperception continues to plague the sector today. “The vape market has been under near-constant attack from organizations that fail to recognize the extensive body of science that points to black market THC being the source of the EVALI lung disease,” says Abboud. “Both the FDA and CDC have come to this same conclusion. The damage to the public consciousness that this false narrative perpetuated has caused states to move towards banning some or all nicotine e-cigarettes. Also, some state officials have improperly used the EVALI issue to claim that certain flavored nicotine vapor products should be banned even though there was zero association between flavors and any EVALI case. These actions have had a negative impact on the vapor market and have scared adults back to smoking. Not only does this harm the health and well-being of consumers, but it also has devastating economic impacts.”

    An excuse to crack down

    Michael B. Siegel headshot
    Michael Siegel

    In the wake of the EVALI outbreak, several states and cities have proposed or enacted e-cigarette and flavored e-liquid bans. “Once again, knowledge of the true cause of the EVALI outbreak had no effect in changing public policy,” says Siegel. “All of the states that enacted emergency bans on e-cigarettes or flavored e-cigarettes because they suspected these products were involved continued to implement these bans after it became clear that e-cigarettes played no role. It is as if the science doesn’t matter at all and policymakers simply enact the policies they want regardless of what the science shows or the actual health impact will be.”

    According to Abboud, states continue to create arbitrary and misguided measures to ban flavors for vapor products without addressing marketing issues. “For example, New York left all flavored combustible products on shelves while going after flavored vapor products even though the New York State Department of Health did not find any presence of vitamin E acetate in the nicotine products they tested,” he says. “Opponents of vaping have seized on the EVALI crisis to redouble their efforts to ban flavors despite there being no logical, much less scientific, connection between EVALI and flavors.” Abboud is convinced last summer’s crisis has set off a dangerous chain reaction of policy decisions and regulations that will do more harm than good as they too are focused on the wrong issues.

    Inaccurate or incomplete press reports have contributed considerably to the public’s misperceptions and not just in the U.S., according to an independent analysis of media coverage before, during and after the EVALI outbreak, commissioned by the Foundation for a Smoke-Free World (FSFW).

    The study found that THC vaping and nicotine vaping, which involve different devices, liquids, supply chains and consumers, were consistently confused by the evaluated media, which focused primarily on nicotine vaping and nicotine. Consequently, people who vaped THC during the EVALI outbreak were not alerted to the potentially life-threatening dangers of illicit, tainted versions of these products. What’s more, U.S. adult misunderstanding increased between September 2019 and January 2020. The share of people who believed THC vaping was the cause of EVALI decreased from 34 percent to 28 percent while the share who believed that nicotine vaping was the cause rose from 58 percent to 66 percent. This development, the analysists said, came on top of numerous surveys showing that public misunderstanding of nicotine itself is widespread, potentially discouraging smokers from using nicotine patches, gum and other replacement therapies to quit smoking.

    Similar trends were observed in other countries, none of which experienced EVALI cases. Among other countries, the FSFW study looked at EVALI news coverage in the U.K., where the country’s health agency, Public Health England (PHE), had stated as early as 2015 that vaping nicotine is at least 95 percent safer than smoking combustible cigarettes. Nevertheless, an increasing number of articles sounded alarms about nicotine vaping in the latter half of 2019. Even though U.K. health authorities repeatedly reiterated PHE’s findings, more than a third of smokers in the U.K. believed that e-cigarettes were equally or more harmful than combustible tobacco, according to a March 2020 report in The Independent.

    Return to combustibles

    EVALI had a devastating effect not only on the vapor industry but also on the concept of tobacco harm reduction. “The preliminary analyses I have seen suggest that there were substantial losses in the e-cigarette category and significant gains in the combustible market,” says Siegel. “I have not yet seen a comprehensive analysis but am currently working on conducting such an analysis myself using bar code sales data. My hypothesis is that the combination of the EVALI scare, the flavored e-cigarette bans and Covid-19 led to increases in cigarette consumption with a concomitant decline in e-cigarette use. I should have an answer late this fall. If confirmed, this would represent a tremendous blow to the concept of harm reduction.”

    The fact that the EVALI outbreak remained a U.S. phenomenon has often been put down to the fact that other countries have long introduced strict regulation for vapor products. The European Union, for instance, regulates e-cigarettes through its revised Tobacco Products Directive (TPD2), which came into force in May 2016. Article 20 lays down minimum safety and quality standards for vapor products and refill containers. Among other things, the law restricts the amount of nicotine in e-liquids to 20 milligrams per milliliter. The high nicotine levels in some U.S. products have likely contributed to the rapid spread of youth vaping in the U.S. The EU directive also prohibits the use of ingredients such as taurine, colorings and caffeine in e-liquids. THC liquids, meanwhile, are hard to find in Europe.

    The U.S. too is moving toward a more regulated market. By Sept. 9, all companies that want their novel nicotine products to remain in the market will have to submit a premarket tobacco product application (PMTA) to the FDA. “These applications will give [the] FDA the opportunity to examine all of the science regarding vaping and, most importantly, the science specific to the products for which applications are filed,” says Abboud. “This means [the] FDA will be making its determination on each application of whether the product is ‘appropriate for the protection of public health.’ These determinations will go a long way to finally dispelling the false narrative perpetuated about vaping.”

    For Siegel, the PMTA pathway is no solution, however. “The great irony is that the PMTA approach does nothing to directly address the possibility of another EVALI [crisis] occurring and actually makes it more likely that something similar could recur,” he says. “The major effect of the enforcement of this deadline will be the decimation of the e-cigarette market, with all of the small companies and most vape shops disappearing and the market being shifted largely over to the big companies with a strong retail—convenience store—presence. What this means is there is going to be an expanding market for both DIY [do-it-yourself] and black market products, especially flavored e-liquids. While many suppliers are trustworthy, there are always those who are going to get into the business solely to make money, and those are the ones I worry about. They may take shortcuts. And ironically, this massive black market and DIY market will not be regulated.”

    Science against misperceptions

    Meanwhile, some scientific sources, such as the Harvard Health Blog in April 2020, have used EVALI as a springboard to suggest that there are “other causes for concern” in vapor products, such as humectants, flavoring agents, heating ingredients or the risk of heavy metal inhalation due to repeated use of refillable cartridges.

    “In low-quality products with poor manufacturing standards and poor quality assurance measures, there are causes for concern, including certain flavoring agents, overheating of the e-liquid and potential heavy metal exposure,” Siegel acknowledges. “Sadly, instead of focusing on implementing a set of safety testing and standards that would get these products off the market and ensure the maximal safety of the vaping product supply, the FDA has been wasting its time focusing on getting rid of cherry vapes and soon will be decimating the entire market. I believe that instead of the ridiculous PMTA requirements, the FDA should simply promulgate safety regulations for e-cigarettes and vaping products. They should have done this back in 2011 when the American E-Liquids Manufacturing Standards Association (AEMSA) had actually drafted a set of standards that I thought were a good basis for regulation.”

    Abboud points to a 2018 report by the U.S. National Academies of Science, Engineering and Medicine (NASEM), which concluded that there was “no available evidence whether or not e-cigarettes cause respiratory diseases in humans.”

    “The report even concluded that switching from traditional smoking to vapor products would reduce harmful health effects,” he says. “For those concerned about the short-term implications of vaping, NASEM also concluded that vaping instead of smoking creates improved health benefits for the respiratory and cardiovascular systems. Most importantly, the FDA is currently reviewing PMTA applications which contain all the relevant science related to specific products that will remain on the market. ‘Other causes of concern’ will be sorted out by the FDA’s team of scientists and, as of this date, no one has rationally claimed that vaping is not a safer alternative to smoking cigarettes.”

    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.
  • Philter of the Future

    Philter of the Future

    The Philter Labs Phlip
    The Philter Labs Pocket

    Philter Labs has developed portable systems to eliminate secondhand smoke and vapor.

    By Marissa Dean

    For years, public health officials have warned that secondhand smoke is just as dangerous as smoking, if not more so, and more recently, elusive “thirdhand” smoke—the residual nicotine and other chemicals left on indoor surfaces by tobacco smoke—has been a topic of concern. And with the creation of vapes came the controversy of how harmful exhaled vapor may be, especially with the current pandemic at hand.  

    With all that in mind, Philter Labs, a technology company in San Diego, California, USA, created two products—one that eliminates secondhand smoke from cigarettes and secondhand vapor from vaporizers and another that removes secondhand vapor from pen and stick vapor products.

    Philter Labs was co-founded in 2014 by Christos Nicolaidis, a veteran entrepreneur and CEO of Philter Labs, and John Grimm and Yuval Shenkel, product engineers with decades of experience designing innovative medical components for Fortune 500 companies. After seeing how vaporizers were changing the way people consumed nicotine, they wanted to find a way to get rid not only of traditional secondhand smoke but also of secondhand vapor.

    The company’s goal, according to its website, is to allow “adult vapers and nonvapers to socially coexist … while eliminating secondhand smoke and protecting their personal right to vape or smoke.” A bonus comes in the form of environmentally friendly clean air, void of the pollutants that are found in secondhand smoke and vapor.

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    As people have become more health-conscious, concern about secondhand smoke and vapor has increased accordingly. “Our surveys have found that 67 percent of people who smoke and vape are concerned with secondhand smoke [and vapor] and how it affects the environment around them,” writes Nicolaidis. This shift toward more responsible vaping and smoking has led to a higher demand for Philter’s environmentally conscious filter technology, leading to a sales increase for the company and a more than 20 percent customer return rate. Naturally, the Covid-19 outbreak has affected this as well—many users are looking for ways to continue to vape without putting those around them at risk. It’s still unclear exactly how vaping and smoking aid in the spread of the virus, but it has been suggested that vapor and smoke clouds can suspend the virus in the air and spread it to others. Using Philter devices would help prevent this.

    When asked in an email exchange how Philter’s technology works, Nicolaidis said, “It’s important to first point out that our products are designed to preserve users’ normal smoking or vaping experience, so we never interfere with the inhale. But upon exhale, the user has the option to blow their smoke back into our Philter instead of the air. Inside the Philter, a proprietary combination of filtration mediums and airflow algorithms work together to capture 97 percent of airborne particulates, pollutants and VOCs [volatile organic compounds] down to a particulate size about 30 times smaller than the width of a human hair.” The products do not capture the smoke emitted by the lit ends of combustibles, however.

    “Our Philter is the first in the nanofiltration space for vaping that has been validated as EN 1822 HEPA compliant by a globally recognized independent particulate testing laboratory,” Nicolaidis added.

    Philter products, made for use with tobacco, cannabis and CBD, differ from existing solutions in three ways, according to Nicolaidis. The first notable difference is that Philter products do not simply mask secondhand smoke and vapor—they capture it and eliminate the harmful elements. Philter’s science-based filtration processes have been granted three utility patents with several others pending.

    The second difference is in size. Nicolaidis describes Philter products as “small, discrete and sophisticated” while stating that most other products are “oversized and impractical to carry.” The two products promoted on the company’s website—which are available for purchase online, on Amazon or at a variety of brick-and-mortar stores throughout North America—the Pocket and the Phlip, offer users options for carrying their products; the Phlip works in coordination with pen and stick vapor products, allowing users to carry one product. The vapor product inserts into the allotted space on the filter, and users inhale from the vape then flip the device around to exhale into the filter. The Pocket, on the other hand, requires users to carry two devices, but it can be used with combustibles as well as vapor products. Instead of inserting the device or combustible into the Pocket, users exhale into the Pocket after inhaling from their vape or combustible as normal. The Pocket captures the secondhand smoke or vapor rather than it being released into the air. Each filter is good for 150 exhales. While both products require you to carry an additional piece, neither is much bigger than the products they are used in conjunction with.

    The third difference focuses on brand marketing. “Our brand messaging is positive and inspirational,” Nicolaidis writes. “Philter use provides an opportunity for people who vape and people who don’t to safely share the same space without the fear or stigma of secondhand smoke. It’s truly a win-win for everyone involved.”

    The goal of keeping the products small and efficient created a few hurdles in development; it took more than four years and 20 prototypes before Philter Labs created a version that was ready for commercialization. The chief technology officer used his experience working on cardiac and spine-related medical devices to help create a miniature microfiltration system “roughly the size of a tube of lipstick.” Engineers also had to consider airflow and exhale to make them feel as natural as possible, realizing each user’s physiology and exhale capacity is different. 

    The company is also working on new technology: “The ‘Moonshot’ for our industry would be a device that captures and eliminates all smoke [including that emitted by the lit end] from a traditional cigarette. While we can’t divulge any details at this time, I can say that Philter’s brilliant minds are hard at work on a Moonshot product, and we expect liftoff in late 2021.” On top of that, Nicolaidis notes that the company is “about to announce a new cutting-edge product that will allow for widespread adoption of [Philter’s] patented filtration technology. It’s a product that’s been in the works for several years and will bring accessibility, ease of use and a high-quality experience to consumers. This is not only a game-changer with respect to the future of vaping and the opportunity to finally begin normalizing vape use in public settings but will also have a positive impact with regard to public policy and how political leaders can offer a solution that protects individuals’ rights while preserving the freedom of people who do not vape or smoke in virtually ‘any’ setting.” Helping to move these projects forward is a recent $1 million funding investment to support corporate growth, which includes new product launches and research and development. In 2018 and 2019, the company also received $2 million in seed financing from Bravos Capital, Explorer Equity and a global Private Equity Fund.  

    The future of filters is changing, and Philter Labs seems to be at the forefront of innovation. Time will tell how its technology will change the vapor industry and the public health landscape—one day soon those clouds of cigarette smoke and vapor may be problems of the past.

    Beyond technology

    Philter Labs’ work doesn’t stop with its nanofiltration technology. The company recently launched an advocacy division, the Philter Project, to help improve communities throughout the U.S. and abroad. Funds have gone toward planting trees in the Amazon through the One Tree Planted initiative, providing veterans suffering from PTSD with Philter Phlips and supporting cannabis-related criminal justice reforms through the Last Prisoner Project.

    Marissa Dean joined Tobacco Reporter in the summer of 2018 as a copy editor.Since that time, she has taken on additional responsibilities, including feature writing.Her skills span the publishing industry from layout and design to copy editing to content creation.