Category: News This Week

Altria Settles Multiple Juul Cases

Photo: Steheap
Altria Group has reached agreement on terms to resolve at least 6,000 Juul-related state and federal cases for $235 million.
“While we continue to believe the claims against us are meritless, we believe this settlement avoids the uncertainty and expense of a protracted legal process and is in the best interest of our shareholders,” said Murray Garnick, Altria’s executive vice president and general counsel, in a statement. “This settlement brings to a close the vast majority of our pending Juul-related litigation.”
In October 2019, the U.S. Judicial Panel on Multidistrict Litigation ordered the coordination or consolidation of federal individual and class action lawsuits related to Juul in the U.S. District Court for the Northern District of California for pretrial purposes. These cases include approximately 50 economic class actions, approximately 4,500 personal injury actions and approximately 1,500 government entity actions, including approximately 1,400 school district cases. These cases are covered by the agreement as well as cases in a related state court consolidated proceeding involving 750 cases.
This settlement does not apply to three cases brought by attorneys general, 35 cases brought by Native American tribes, 17 antitrust cases or three Canadian cases.
The settlement remains subject to the parties entering into one or more final settlement agreements approved by the relevant courts.
Altria expects to record a pre-tax charge of $235 million in the second quarter of 2023 and intend to treat such amount as a special item and exclude it from our adjusted diluted earnings per share.
May 10, 2023
Net Revenue Up 143 percent at 22nd Century

Photo: 22nd Century Group
22nd Century Group posted net revenues of $22 million in the first quarter of 2023, up 143 percent from the comparable 2022 quarter.
“22nd Century is executing an aggressive commercial rollout of our FDA [U.S. Food and Drug Administration]-authorized VLN reduced-nicotine content cigarettes and a revolutionary new CDMO plus distribution business model for our hemp/cannabis business unit, the combination of which will accelerate revenue, increase gross margin and drive 22nd Century to cash profitable operating results for both business units in 2024,” said CEO James A. Mish in a statement.
“Having clearly confirmed the incredible consumer demand for VLN and rapidly expanding pipeline of retail stores wanting to carry the brand, we are now fully focused on commercialization. We are working steadily toward commercial sales covering thousands of stores in California, Texas and Florida with a top retail chain as well as booking launch windows and orders with both existing and new chains seeking to sell VLN products across an expanding geography.
“To support these launches and accelerate the rollout of hundreds or even thousands of new stores across multiple states within a very narrow time frame, we have now secured agreements with the No. 1 and No. 2 national-scale c-store distribution providers, which are already taking warehouse stocking quantities of VLN for customer distribution. These actions provide a clear pathway for a rapid acceleration in VLN sales activity and our goal of entering up to 18 states by year-end 2023, which we believe will make VLN available in almost 60 percent of the $80 billion U.S. tobacco market.
“We believe 22nd Century is poised for phenomenal growth this year in both our tobacco and hemp/cannabis businesses. As such, we are introducing our first revenue guidance, calling for full-year 2023 revenue of $105 million to $110 million, representing a 69 percent to 77 percent increase from $62.1 million in 2022. Our growth will be driven by the rapid stocking and ramp up of new VLN customers, new Pinnacle CMO sales, continued record cannabinoid ingredient volumes, startup of our CDMO+D hemp/cannabis agreements and a full year of GVB sales.”

May 10, 2023
Mativ Results Impacted by ‘Tough’ Quarter

Photo: SWM
Mativ Holdings reported sales of $679 million in the quarter of 2023, up 66.9 percent from the comparable 2022 period. The company attributed the increase to the benefits from the July 2022 merger between Schweitzer-Mauduit International and Neenah, which created the holding. In a press note, it stressed that financial results for periods prior to the merger reflect only the legacy SWM results.
GAAP loss was $7.7 million and GAAP operating profit was $9.3 million, which all included merger integration and purchase accounting expenses. Adjusted Income was $13.7 million. For the engineered papers business, adjusted EBITDA decreased approximately $15 million, accounting for roughly two-thirds of total year-over-year EBITDA decline, mainly due to labor strikes in France and manufacturing inefficiencies.
Price increases more than offset the impacts of higher input costs, according to the company; however, lower volumes primarily from customer de-stocking and manufacturing challenges drove margin pressure
Mativ Holdings expects $25 million incremental synergy realization in 2023, with procurement and supply chain activities building upon 2022 operating expenses actions, The company also anticipated easing input costs to support sequential margin improvements
“The first quarter of 2023 was impacted by a combination of customer de-stocking across the business, operational inefficiencies in our French facilities, where we experienced a number of strikes in response to governmental actions related to social benefits, and inefficiencies in several U.S. sites,” said Mativ CEO Julie Schertell.
“We believe the key issues affecting first quarter margin performance will prove temporary, as customer indications suggest we are currently moving past the peak de-stocking impacts, and that more normalized volume activity should resume in the second half of the year.
“Further, we are starting to see improved manufacturing performance across the business, which we expect will translate into better margins as the year progresses. Despite a tough first quarter and some continued headwinds expected in the second quarter, we expect to exit 2023 on a strong trajectory toward $100 million EBITDA quarters.”

May 10, 2023
Revenues Up 143 Percent at 22nd Century

22nd Century Group reported net revenues of $22 million for the first quarter of 2023, up 143 percent from the comparable 2022 quarter.
“22nd Century is executing an aggressive commercial rollout of our FDA authorized VLN reduced nicotine content cigarettes and a revolutionary new CDMO plus distribution business model for our hemp/cannabis business unit, the combination of which will accelerate revenue, increase gross margin and drive 22nd Century to cash profitable operating results for both business units in 2024,” said CEO James A. Mish in a statement.
“Having clearly confirmed the incredible consumer demand for VLN and rapidly expanding pipeline of retail stores wanting to carry the brand, we are now fully focused on commercialization. We are working steadily toward commercial sales covering thousands of stores in California, Texas and Florida with a top retail chain, as well as booking launch windows and orders with both existing and new chains seeking to sell VLN products across an expanding geography.”
“We believe 22nd Century is poised for phenomenal growth this year in both our tobacco and hemp/cannabis businesses. As such, we are introducing our first revenue guidance, calling for full-year 2023 revenue of $105 million to $110 million, representing a 69 percent to 77 percent increase from $62.1 million in 2022.
“Our growth will be driven by the rapid stocking and ramp up of new VLN customers, new Pinnacle CMO sales, continued record cannabinoid ingredient volumes, start-up of our CDMO+D hemp/cannabis agreements and a full year of GVB sales.”
May 10, 2023
“Compliant” Cigarettes Violate Flavor Ban, Says California AG

Photo: Borgwaldt Flavor
California Attorney General Rob Bonta has warned R.J. Reynolds Tobacco Co. and ITG Brands that their menthol-like flavored cigarettes violate the state’s new law prohibiting sales of flavored tobacco products, including menthol cigarettes.
“The Tobacco Unit of the California Department of Justice has reviewed referred packaging and promotional materials for several of your company’s products—Camel Crush Oasis Silver, Camel Crush Oasis Blue, and Camel Crush Oasis Green and determined that each of these reviewed products is presumptively flavored under the California flavor ban law,” Bonta wrote in letters to Reynolds.
Following the enactment of California’s flavor ban, Reynolds and ITG Brands introduced cigarettes with a cooling flavor similar to that provided by menthol cigarettes. The products have been marketed with slogans such as “tropical oasis,” “new fresh taste” and “a taste that satisfies the senses.”
According to RJR, its new products don’t violate California law because they don’t have a distinguishable taste or aroma other than tobacco. California law defines a flavored tobacco product as any product that has a “distinguishable taste or aroma, or both, other than the taste or aroma of tobacco, imparted by a tobacco product or any byproduct produced by the tobacco product.”
The Campaign for Tobacco-Free Kids applauded Bonta’s actions. “Policymakers at every level must stand up to the tobacco industry by adopting and fully enforcing measures to end the sale of all flavored tobacco products, including menthol cigarettes,” wrote CTFK President Matthew L. Myers in a statement.
State legislators approved California’s law prohibiting flavored tobacco sales in 2020 and the ban was upheld by 63 percent of the state’s voters in 2022.

May 9, 2023
Ukraine Steps Up Crackdown on Illicit Trade

Photo: vanSemenovych
Since the start of the war with Russia, Ukraine has dismantled at least six illegal cigarette factories, reports EUreporter. These illegal facilities were found to be well-equipped operations that used relatively new cigarette machinery.
When Ukrainian President Volodymyr Zelensky took office in 2019, he announced an ambitious agenda to combat the illicit tobacco trade, stating that defending a 1,500 km border with the European Union against cigarette smuggling would be a key task as illicit tobacco trade has close connections to criminal activity, organized crime and other areas of black market trade.
However, since Ukraine’s war with Russia began in February 2022, illicit tobacco trade increased due to factors including the deteriorating economic situation, disruption of logistical channels, lower purchasing power due to inflation and a tobacco product excise tax increase. Due to the illegal cigarette trade, Ukraine has estimated that it lost over €375 million ($443.3 million) in 2021 and almost €500 million in 2022.
Other methods to battle illicit trade have included central coordination at the highest administrative level, intensified cooperation with EU member states, the strengthening regional and international collaboration, the vetting of the civil service, stronger control of customs and border inspectors, strengthening of police forces and legislation, and awareness campaigns for consumers.
May 8, 2023
‘BAT North Korea Trade Was Legal in Singapore’

Image: Andy
British American Tobacco’s Singaporean affiliate did not break local laws when it sold cigarette components to North Korea, despite receiving a multi-million dollar fine in the U.S. for flouting North Korean sanctions, reports The Straits Times.
In April, BAT and its indirect subsidiary in Singapore agreed to pay U.S. authorities $635.24 million plus interest to resolve investigations into suspicions of sanctions breaches concerning business activities relating to the Democratic People’s Republic of Korea between 2007 and 2017.
North Korea is subject to sanctions by the United Nations and individual countries for developing nuclear weapons, money laundering and human rights violations, among other activities.
According to the Straits Times, Singapore authorities became aware in 2018 that BAT Marketing Singapore was involved in selling cigarette components to the Democratic People’s Republic of Korea (DPRK), but stopped sales since June 2017—five months before Singapore implemented the UN sanctions.
The authorities concluded that the company did not breach Singapore’s UN regulations. “The trade of cigarette components with the DPRK was not prohibited under our laws at that time,” the city’s police were quoted as saying by the Straits Times.
Today, trade sanctions against North Korea make it a crime for anyone in Singapore, as well as Singapore citizens based overseas, to supply, sell or transfer designated export items to anyone in North Korea, whether directly or indirectly.
Those found guilty of doing so can be fined up to SGD100,000 ($75,473) or three times the value of the goods that were dealt with, whichever is greater. They can also be jailed for up to two years or both.
May 8, 2023
Zinwi to Hold Flavoring Event at UK Vapor Expo

Zinwi Biotech, a major Chinese e-liquid manufacturer, has announced it will bring its Good Flavor products to the UK Vaper Expo from May 12 – 14 in Birmingham. Attendees of the occasion will have the opportunity to witness firsthand Zinwi’s Good Flavor and will be able to customize their own flavors during the event.
“Zinwi’s products are known to be equivalent to three keywords in the industry: high return to flavor, high smoothness and high stability,” stated to a Zinwi spokesperson. “The primary reason behind the ‘high return to flavor’ characteristic is the stringent fragrance selection process.”
The “high return to flavor” concept is the requirement that each component of Zinwi’s e-liquids to have the highest levels of quality and purity. One of the most important components of an e-liquid is fragrance and the fragrance selection process begins in Quality Control where Zinwi analyzes a fragrance’s physical and chemical indicators and the legality of the components used, according to the spokesperson.
“It is then followed by our sensory evaluation team to evaluate the richness and purity level of the fragrances,” the spokesperson said. “The samples and the finished products will then be evaluated by Quality Control to ensure the highest level of quality of the e-liquid after the fragrances have been added to the products in the testing and manufacturing stage.”
Another reason Zinwi’s e-liquid has an enhanced flavor profile is the company’s Atomization Technology Research Center, which has self-developed nicotine salts and the sweeteners used in the e-liquids to ensure the highest quality of those components of the e-liquid formula, according to the spokesperson.
“Nicotine salt has been delicately developed taking into close consideration the stirring time, the temperature, and the amount of nicotine added in combination with other components such as benzoic acid. The diverse range of sweeteners are also developed to match different vaping devices, for example, different puff-range disposable devices and ceramic core vaping devices,” the spokesperson explained.
“Sweeteners can easily affect the flavor either to be ‘too sweet’ or ‘not enough sweet.’ Having a diverse range of sweeteners can avoid the “too sweet” or “not enough sweet” challenge and help the finished products to maintain the ‘high return to flavor’ characteristic.”
Additionally, Zinwi’s flavoring team are some of the most experienced in the industry. Apart from flavorist’s own flavoring experiences, Zinwi’s flavoring team together has created over 50, 000 formulas, and hundreds more are added every day on average.
“Zinwi’s good flavor products are not attributed by one single factor,” said the spokesperson. “It is the combined factors including the raw materials selection, the self-developed e-liquid components such as nicotine salts and sweeteners, the quality control procedures and the well-trained flavoring team that guarantee the good flavor.”
Established in 2016 and headquartered in the Guangming District of Shenzhen, China, Zinwi Biotech is a high-tech company that specializes in providing integrated e-liquid solutions including R&D, production and sales services to global e-cigarette manufacturers and brands. Due to its strong R&D capabilities, stringent quality control procedures and premium client network, Zinwi has become the world’s leading integrated e-liquid solutions provider.
May 8, 2023
Firms Hiked Prices Without Consultation

Photo: Skórzewiak
Jordanian Minister of Industry and Trade, Yousef Al-Shamali, has accused tobacco companies of raising prices without government consultation, according to reports Jordan News citing Al-Mamlaka TV.
The minister said that the government would examine the production costs of the tobacco industry and use legal tools if necessary. Meanwhile, the Income and Sales Tax Department has confirmed that no new taxes will be imposed on any commodity or service, including tobacco, as part of the government’s policy not to raise taxes and financial burdens on citizens.
Jordanians have been complaining about rising tobacco product prices despite government assurance that taxes will not be raised and no new taxes will be imposed.
Dirar Al-Harasees, chairman of the financial committee in the lower house, expressed surprise by the hike as well, calling on the government to clarify the reason behind the increase and questioning who decided to raise the prices.
Manufacturing companies are not authorized to raise prices unilaterally without approval of the House of Representatives to impose new taxes, according to Harasees.
May 8, 2023
Malaysia to Sell Only Sealed Bottles

Photo: José Rubén
The Malaysian Substance Abuse Council (Masac) has recommended that only locally made vape liquids in sealed glass bottles be allowed for sale in the country, reports The Star. Using glass bottles will minimize the risk of undesirable substances being added, according to Masac’s secretary-general Raja Azizan Suhaimi.
A joint study by Masac, the Asian Center for Research on Drug Abuse and Universiti Sains Islam Malaysia found that teenage girls are increasingly using vape liquids laced with psilocybin, a psychoactive compound found in fungi such as “magic mushrooms.”
Raja Azizan suggested that the age limit for vaping should be raised from 18 to 21 to minimize the abuse of vape liquids, which may contain drugs. So far, only 10 manufacturers producing liquid nicotine are registered with the Customs Department, despite the registration deadline ending on April 30, 2023.
Masac also suspects that the three 13-year-old girls who were allegedly gang-raped by four teenagers in Kota Kinabalu on April 26, 2023, may have been given a vape liquid laced with psilocybin. The Malaysian government attempted to regulate the use of vapes among youth in October 2022 through the Tobacco and Smoking Control Bill, but it was referred to a Special Parliamentary Select Committee for refinement.
Prime Minister Datuk Seri Anwar Ibrahim revealed during the revised Budget 2023 in February that vape liquids containing nicotine are still illegally sold in the country with estimated sales of MYR2 billion.
Meanwhile, Health Minister Zaliha Mustafa has stated that the Generational Endgame Bill—a piece of legislation that aims to gradually raise the smoking age until it covers the entire population—will be expedited and retabled.
May 8, 2023