Category: News This Week

  • NJOY Rumored to be Readying for Potential Sale

    NJOY Rumored to be Readying for Potential Sale

    E-cigarette maker NJOY Holdings Inc has hired bankers for a possible sale of the company, the Wall Street Journal reported on Tuesday, citing people familiar with the matter.

    The report added the privately held NJOY is likely to be valued at up to $5 billion, according to the sources who cautioned the process was still at an early stage and there was no guarantee a deal would materialize.

    If NJOY does not receive a high enough valuation, the company could raise money and stay private, potentially paving the way for a future initial public offering, the Wall Street Journal said.

    The e-cigarette maker is simultaneously exploring a new fundraising round and aims to raise between $300 million and $500 million, the report added.

    NJOY has two devices that have received marketing approval from the U.S. Food and Drug Administration, including its Ace device and Daily disposables.

    Late June, Bernstein analyst Callum Elliott wrote in a note that Altria could try to buy privately owned NJOY, which “has already succeeded with its PMTA process applications.”

    Rival Juul Labs Inc said on Friday it was in the early stages of exploring several options, including financing alternatives, as the company deals with lawsuits and a probable ban on sales of its e-cigarettes by U.S. health regulators.

    NJOY and Mudrick Capital Management, a majority owner of the company, did not immediately respond to a Reuters request for comment.

  • FDA Reviewing Oversight Rules After Botched Juul PMTA

    FDA Reviewing Oversight Rules After Botched Juul PMTA

    The head of the U.S. Food and Drug Administration Tuesday said he has commissioned an independent review of the agency’s food and tobacco programs following months of criticism over its handling of the baby formula shortage and e-cigarette reviews, according to AP.

    The announcement comes as FDA Commissioner Robert Califf attempts to push past several controversies that have dominated his second stint running the agency, including his issuing of a marketing denial order (MDO) to e-cigarette maker Juul Labs and later having to rescind that order and placing Juul’s premarket tobacco product application (PMTA) back under review.

    “Fundamental questions about the structure, function, funding and leadership need to be addressed” in the agency’s programs, Califf said in a statement. The agency’s Center for Tobacco Products (CTP) is facing challenges navigating policy and enforcement issues from “an increasing number of novel products that could potentially have significant consequences for public health … CTP will continue its important work during the evaluation, including review pending applications and take enforcement actions as needed.”

    Califf said the non-profit Reagan-Udall Foundation — a non-governmental research group created by Congress to support FDA’s work — would convene experts to deliver evaluations within 60 business days of both the food and tobacco operations.

    “It may take some time to implement any recommended changes, but I am committed to addressing them and communicating them to the public in a timely manner,” Califf stated. “It is my belief that this effort will continue strengthening the FDA and better position the agency to deal with the many immediate public health issues we are facing, while preparing for the many scientific challenges and fascinating opportunities of the future.”

  • Court Denies Triton, Vapetasia Review of FDA Orders

    Court Denies Triton, Vapetasia Review of FDA Orders

    Two makers of flavored e-liquids lost their bid to force the U.S. Food and Drug Administration to allow them to market their vaping products, after the U.S. Court of Appeals for the Fifth Circuit denied their requests Monday for review of the agency’s orders.

    Wages and White Lion Investments LLC, doing business as Triton Distribution, and Vapetasia LLC didn’t show that the FDA acted arbitrarily or capriciously when it rejected their premarket tobacco product applications (PMTAs), the Fifth Circuit said.

    If the ruling holds, Triton and Vapetasia will not be able to sell their reduced-risk nicotine products.

    Dozens of other smaller vape companies have accused the agency of operating unfairly, and will likely be disheartened by this ruling, reports Alex Norcia for Filter.

    “Among the three judges who heard the Triton case, Catharina Haynes and Gregg Costa sided with the FDA. Edith Jones, the former chief judge of the Fifth Circuit who has served since the Reagan administration, dissented from her colleagues,” Norcia writes.

    Todd Wages, a partner at Triton Distribution, told Filter he was “very disappointed” in the court. “We’re exploring our next steps. I will not stop fighting until I can’t any longer, until every door is closed,” he said.

    The FDA rejected applications to market 55,000 flavored e-cigarettes in August, 2021, including Triton’s, and said applicants would likely need to conduct long-term studies establishing their products’ benefits to win approval.

    A Fifth Circuit panel then in October agreed with Triton’s claim that the new requirement for long-term studies differed from earlier FDA guidance and was a “surprise switcheroo” and the panel allowed Triton to keep selling its e-cigarettes until another panel could hear its appeal.

    Eric Heyer, the lawyer representing Triton Distribution, told Filter that the company “intends to file a petition for rehearing en banc by the entirety of the Fifth Circuit.”

  • USTC Exits Bankruptcy

    USTC Exits Bankruptcy

    Photo: USTC

    U.S. Tobacco Cooperative (USTC) exited bankruptcy on July 14. The announcement follows the federal Bankruptcy Court’s approval of the cooperative’s Chapter 11 plan of reorganization on June 23, 2022, along with approval of the settlement terms with the Lewis Class.

    USTC filed for bankruptcy protection in July 2021 in order to meet contractual obligations to its member growers while the company addressed uncertainty presented by the ongoing Lewis class action lawsuit.

    “Today’s exit from bankruptcy marks the end of more than 17 years of class action lawsuits following the termination of the federal price support program that ran from 1946 to 2005,” said USTC CEO Oscar J. House in a statement.

    “Our exit allows us to now focus solely on the services and products our cooperative is known for. I want to thank our customers, employees, suppliers, board of directors and especially our member growers for their continual support throughout the bankruptcy proceedings, which are now officially behind us.”

    In accordance with the plan, the cooperative pays in full its secured lenders, suppliers and unsecured creditors in addition to settlement amounts to the Lewis Class.

    “We are energized,” continued House. “Our business is robust with our farmer members contracting for this fall’s harvest, customers ordering our products and shipments processing daily. With our experienced management team, dedicated employees and our strong market position, the cooperative is poised for a successful future.”

  • Romania to Hike ‘Sin Taxes’

    Romania to Hike ‘Sin Taxes’

    Photo: Maksym Kapliuk

    Romania’s government will increase tobacco and alcohol excise duties as of Aug. 1, aiming to boost public revenue, reports SeeNews. The measure will be followed by a 10 percent tax hike on sugary drinks effective Jan. 1, 2023

    The excise duty on tobacco and alcohol has been unchanged since 2015.

    The European Union requires member states to impose an excise duty of at least 60 percent of the weighted average retail selling price of cigarettes. 

    The Romanian government expects the measures to boost budget revenues by RON1.2 billion ($242 million) this year and RON10.57 billion in 2023. 

  • Zimbabwe to Wrap up Auction Sales

    Zimbabwe to Wrap up Auction Sales

    Photo: Taco Tuinstra

    Zimbabwe expects to wrap up its tobacco auction season July 20 with slightly better prices than last year, reports Xinhua News Agency, citing the Tobacco Industry and Marketing Board (TIMB).

    A flue-cured auction mop-up sale will be conducted on Aug. 17, 2022, and depending on the volume of deliveries, the clean-up sale may be continued for more than one day until all delivered tobacco is sold.

    The TIMB added that because of significant volumes that are still being received, contract sales will continue until further notice.

    Zimbabwe’s 2022 tobacco auction selling season started March 30, 2022.

    Tobacco prices have been slightly firmer this year, due to better leaf quality despite the difficult weather conditions experienced during the season.

    The opening price this year was $4.60 per kg, compared with $4.30 last year.

    Over the course of the selling season, prices remained firm, averaging above $3 per kg compared to an average of $2.80 per kg last year.

    As of July 12, farmers had sold 179.4 million kg of golden leaf at an average price of $3.04 per kg.

    The bulk of Zimbabwe’s tobacco leaf is sold through contract floors, as only 5 percent of farmers are able to self-finance tobacco leaf production.

    Tobacco is Zimbabwe’s second foreign currency earner after gold, with China and South Africa being the major buyers of the country’s golden leaf.

     

  • Malaysia’s Generational Tobacco Ban Clears Cabinet

    Malaysia’s Generational Tobacco Ban Clears Cabinet

    Photo: PX Media

    Malaysia’s Cabinet has approved the Tobacco and Smoking Control Bill, reports The Star.

    “I will be sending [the Bill] to Parliament for this session,” Health Minister Khairy Jamaluddin told reporters during the presentation of a new drug perception study report on July 14.

    Among other provisions, the bill calls for a ban on sales of cigarettes, tobacco and vapor products to those born after 2005.

    The proposed law is modeled on legislation in New Zealand, which in December 2021 revealed a plan to phase out smoking by gradually raising the smoking age until it covers the entire population.

    Presently, some 40.5 percent of men and 20 percent of women smoke in Malaysia.

  • Patent for Biodegradable Filter

    Patent for Biodegradable Filter

    Image: Greenbutts

    Greenbutts has received a Canadian patent for its biodegradable filter tow technology.

    The patent adds to Greenbutts’ proprietary technology stack, offering an all-natural, biodegradable and water dispersing cigarette filter. Previously, Greenbutts obtained patent recognition in the United Kingdom and the United States.

    “Greenbutts’ mission started 12 years ago, at a time when the phrase ‘single-use plastic’ was not used as often as it is today,” said Greenbutts CEO Tadas Lisauskas in a statement. “Our dedication through extensive R&D with our world-class scientific team is now being recognized on a global scale as governments, industry and consumers are all in alignment with a green, clean future.”

    According to Lisauskas, Greenbutts’ biodegradable cigarette filter is compatible not only with traditional combustible smoking products but also with heat-not-burn products. In August 2021, Greenbutts signed an agreement to supply its biodegradable filters to Poda Lifestyle and Wellness.  

    “This patent has strategic importance to our organization as it comes in full alignment with the Canadian government’s decision to ban the manufacture and importation of harmful single-use plastics, a historic move for North America,” he said. “Our technology is a viable and sustainable alternative to cellulose acetate filters while maintaining the sensory experience, delivering the high-performance filtration capability of a traditional filter.”

    “The granting of this new IP by the Canadian Intellectual Property Office is another demonstration that the company is advancing in becoming the most strategic partner to catalyze the tobacco industry to, once and for all, migrate from single-use plastic to a planet friendly, consumer-aligned and government-supported solution,” said Greenbutts’ chief strategy officer, Luis Sanches.

  • Juul Labs Exploring Options, Including Financing

    Juul Labs Exploring Options, Including Financing

    Juul Labs on Friday said it is in the early stages of exploring several options including financing alternatives, as the company deals with lawsuits and a potential ban on sales of its e-cigarettes by U.S. health regulators.

    Bloomberg News earlier reported, citing sources, that Juul’s bankers at Centerview Partners are sounding out investors for a possible $400 million first-lien term loan due August 2023.

    The proceeds would help refinance an existing term loan, which has around $394 million outstanding and matures on the same date, the report added.

    A spokesperson for Juul told Reuters that the company is looking at options to protect its business and to address the “impact of the FDA’s now stayed order so we can continue offering our products to adult consumers who have or are looking to transition away from traditional cigarettes.”

    Bloomberg News in its report said Juul was also considering a new $150 million second-lien term loan, which may have an August 2024 maturity, to help pay down some of the first-lien term loan and to increase liquidity, the report said.

    Financing proposals for either loan are due July 21, according to the report.

    Last month, the Food and Drug Administration (FDA) blocked sales of Juul e-cigarettes and said the applications “lacked sufficient evidence” to show that sale of the products would be appropriate for public health.

    However, Juul appealed the agency’s order and earlier this month FDA put on hold its ban saying it would do an additional review of the company’s marketing application.

  • Tobacco Firms Settle Messaging Dispute

    Tobacco Firms Settle Messaging Dispute

    Several tobacco companies have reached an agreement in long-running litigation brought by the U.S. Department of Justice (DOJ) and certain public health organizations regarding the communication of tobacco-related messaging at retail locations.

    The agreement will require Altria, Philip Morris USA, R.J. Reynolds Tobacco and ITG Brands to supply their contracted stores with court-ordered signs that must be posted for 21 months.

    The agreement covers the last remaining dispute from the lawsuit DOJ filed against Altria, Philip Morris USA and R..J Reynolds in the 1990s, according to the National Association of Convenience Stores (NACS).

    “This litigation has always put the retailers in a uniquely bad position,” said Doug Kantor, NACS general counsel. “Retailers were not parties to the lawsuit and should not be burdened with a court-ordered remedy, but this negotiated outcome avoids even worse results that DOJ and public health groups were advocating.”

    The agreement provides that each store under contract with one of the manufacturers will have to post at least one sign carrying one of 17 different, pre-approved health messages that will be distributed at random to retailers around the country.

    Each store will be required to rotate to a new message halfway through the time period required in the agreement. The manufacturers will be required to hire auditors to check whether the signs are properly posted. A summary of the agreement explaining the requirements on retailers as well as answers to frequently asked questions about it can be found here.

    A hearing on the proposed agreement will be held in the U.S. District Court for the District of Columbia on July 28 and 29. The court will then decide whether to accept the agreement and enter an order to implement it.

    The timing of the requirements for signs to be posted will depend on when the court decides whether to accept the agreement.