Critics call the proposal ‘a public health disaster.’
The U.S. House of Representatives has passed the portion of the Build Back Better Act that includes a controversial nicotine tax. The legislation will now head for the Senate, where it faces an uphill battle.
In a 220 to 213 vote, the House voted mostly along party lines for the legislation that has often been compared to the New Deal. Biden signed the second piece of his domestic agenda, a $1.2 trillion package focused on infrastructure improvements, into law earlier this week.
To help fund the plans, the legislation calls for a tax of $50.33 per 1,810 mg of nicotine for “any nicotine product that has been extracted, concentrated or synthesized.”
Critics warned that raising taxes on smoking alternatives while leaving taxes the same on traditional cigarettes risks driving vapers back to smoking.
“The science is crystal clear: This bill is a public health disaster,” said Tim Andrews, director of consumer issues at Americans for Tax Reform. “The tax hikes on people trying to quit smoking contained in H.R. 5376 would lead to more people, millions more Americans smoking—and dying as a result.”
Andrews’ concerns were echoed by Michael Pesko, an associate professor in the Department of Economics at Georgia State University.
“Given extensive peer-reviewed evidence indicating that these products are substitutes, an unintended but inevitable effect of increasing taxes on e-cigarettes is to increase cigarette use,” he said. “A wide array of research suggests that this boost in cigarette use as a result of large e-cigarette tax increases would significantly increase overall tobacco-related death and disease.”
Australian scientists are training oyster mushrooms to “eat” tobacco butts, reports ABC News.
Oyster mushrooms send out long thin strands of white mycelium to explore their surroundings and gather nutrients—but eating a cigarette butt will be a new dining experience for them, according to Amanda Morgan, founder and head of research and development at Fungi Solutions.
During the trial, the mushrooms slowly recognize the cellulose acetate in the filter of the cigarette butt and begin to eat it.
At the end of the process, the mushrooms will have eaten the microplastics in the cigarette butts’ filters, leaving behind a material that can be used to create other products, such as boxes to collect cigarette butts.
“They [the mushrooms] are used to the cellulose, but we need to introduce the other elements, just like training a baby to eat,” Morgan said.
“From there, you can take the culture and grow the next one.”
According to environmental organization No More Butts, about 4.5 trillion cigarette butts are littered worldwide every year.
Morgan aims to set up a remediation facility in Wollongong where butts can be transported to, treated and turned into usable materials.
Richard Fitzgerald has joined 22nd Century Group as chief financial officer.
John Franzino, the company’s previous chief financial officer, has transitioned to the position of chief administrative officer, where he will be responsible for developing the company’s business processes and leading the company’s financial planning and analysis, operational finance, human resources and information technology functions.
“This is a pivotal time for 22nd Century as we build out our leadership team, particularly with the pending MRTP [modified-risk tobacco product] authorization and international launch of our VLN product,” said James A. Mish, chief executive officer at 22nd Century Group, in a statement.
“We are excited to welcome Rich to the team, expanding our financial and strategic capabilities as we work to rapidly scale the business across all three of our plant franchises. Rich brings a diverse background, including extensive experience in IP [intellectual property] and technology licensing in the life science industry, which we believe is timely as we execute on our key launch programs in tobacco, hemp/cannabis and hops.”
“John has been an important part of 22nd Century’s transformation since joining the company. He has helped the company [to] advance our primary mission in tobacco harm reduction and to take leadership positions in two new plant franchises, enabling us to expand our revenue base, diversify into international markets and build our balance sheet to its strongest level in company history.
“In his role as chief administrative officer, John will focus on further developing our corporate and operational capabilities to support our growth as we bring VLN to market, begin to monetize our hemp/cannabis portfolio and expand our global operations across all three franchises,” said Mish.
“I am excited to join 22nd Century as the company readies for a significant change in its revenue model through the launch of its disruptive VLN product and monetization of its highly differentiated hemp/cannabis portfolio through both IP and plant line revenues,” said Fitzgerald. “22nd Century has positioned itself as a critical industry partner across all three of its franchises, and I look forward to building on this foundation as we continue to scale the company.”
Synthetic nicotine could be considered a component of e-cigarettes, which would allow for the product to be regulated by the U.S. Food and Drug Administration. Mitch Zeller, director of the FDA’s Center for Tobacco Products, said the agency was concerned about the use of synthetic nicotine to avoid regulation and enforcement and is considering its options in dealing with its use.
On Nov. 17, the first day of TMA’s “From Chance to Change” webinar, Zeller said that the Tobacco Control Act defines tobacco products as anything that is made or derived from tobacco and is intended for consumption. The FDA believes that it also includes components and parts (such as coils and batteries) and all the ingredients included in producing e-liquids (such as flavorings and vegetable glycerin) even if the product does not contain nicotine.
“That’s an assessment that we need to make on a case-by-case basis based upon the totality of all the information that we have,” said Zeller.
According to Zeller, synthetic nicotine represents a challenge for the agency because it is increasingly difficult to differentiate from naturally derived nicotine. “Historically, that hasn’t been a problem,” he said. “It’s not a problem now, but it could become a challenge for us going forward.”
Zeller explained that nicotine is comprised of two isomers: R and S. Tobacco-derived nicotine is 99 percent S, and early synthetic nicotine had a 50-50 split between R isomers and S isomers. However, newer versions of synthetic nicotine have much higher proportions of S isomers (as high as 99.9 percent pure), making it harder to tell synthetic nicotine apart from natural nicotine. Tobacco-derived nicotine is also becoming higher in quality.
“Tobacco-derived nicotine is now being made available at a higher quality … pharmaceutical grade from a purity standpoint. And with that, it may be harder for us to see that chemical fingerprint, if you will, whether it’s tobacco DNA or tobacco-specific nitrosamines,” he said. “We could see this as a problem going forward. Coupled with the clear intent of certain companies to do this to evade FDA regulation … We are concerned about what this means for product regulation, for the public health, and a product like Puff Bar proudly proclaiming its use of synthetic nicotine [and] being the No. 1 brand used by youth.”
In the short term, Zeller said the FDA is talking internally about how to best address the growing number of products that are using synthetic nicotine to skirt FDA regulation. He said the agency is also responding to questions from Congress about synthetic nicotine and providing technical assistance to members when asked.
“There are a lot of companies out there that pride themselves on playing by the rules. They have every right to expect that the playing field is going to be level. That’s where we come in with our compliance and enforcement authorities,” Zeller said. “We agree that one of the most important things that we can do, using our compliance and enforcement tools, is to level the playing field and to have our actions [in the e-cigarette space], hopefully, serve as a deterrent. There’s nothing that I can say from a compliance enforcement standpoint on synthetic nicotine other than we have ongoing investigations.”
The Brazilian states of Rio Grande do Sul, Santa Catarina and Parana produced 569.54 million kg of tobacco in 2021–2022, 9.38 percent less than during the previous growing season, according to an announcement from the tobacco growers’ association Afubra relayed by Kohltrade.
The planted area shrunk by 9.78 percent to 243,590 hectares (ha) in this year. Afubra expects yields to average 2,310 kg per ha compared with 2,299 kg per ha in the previous growing season.
The volume reduction was expected, according to Afubra President Benicio Albano Werner. “We had already estimated that there would be a reduction of 8 [percent] to 10 percent, on average, in southern Brazil,” he said. “This is not negative; on the contrary, it is necessary since, for several harvests, Afubra and the entities representing tobacco growers warn of the need to adapt our product offer to market demand.”
Werner said the decline was due also to growers’ frustration with the commercialization of last year’s harvest and competition for alternative crops. More tobacco farmers, he noted, have been diversifying their operations in recent years.
Scandinavian Tobacco Group (STG) has acquired a majority stake in Moderno Opificio del Sigaro Italiano (MOSI), a cigar company with approximately 40 employees and production facilities in Orsago, Italy.
MOSI was founded in 2013 by Cesare Pietrella. The company produces high-quality traditional Italian machine-rolled cigars with a blend of Italian and American Kentucky tobaccos grown on plantations in Northern Italy and in the United States. With a small exclusive offering under the brand Ambasciator Italico, MOSI has gained a market share of approximately 9 percent in Italy for traditional machine-rolled cigars.
“We are excited about this acquisition,” said Jurjan Klep, senior vice president of the Europe branded division in STG, in a statement. “With a majority stake in MOSI, we are acquiring modern cigar-making craftsmanship and a premium brand that will increase our offering to our consumers and the opportunity to take further market share in an important market. This is our fifth acquisition since 2016, and I look forward to further cementing our proven track record of creating value from acquisitions of brands and businesses.”
“Together with Scandinavian Tobacco Group, MOSI and Ambasciator Italico are well positioned for growth, and the acquisition will invigorate the Italian cigar market and benefit Italian cigars smokers, customers and tobacco farmers,” said Cesare Pietrella, founder and president of MOSI.
In related news, STG has restructured its Canadian division, integrating it into its U.S. operations, according to a report by Halfwheel.
Gene Richter, vice president of sales for STG North America, will oversee the Canadian sales team as well as General Cigar Co., Forged Cigar Co. and STG Lane. Cole Patton, with a new role as national sales manager for North American mass market strategic accounts, will oversee the U.S. and Canadian mass market businesses. Mike Restivo, national sales manager of regional accounts for STG Lane, and Jennifer Goodwin, national sales manager for south/west STG Lane, will report to Patton. Marc Rheaume, vice president of sales for STG Canada, left the company.
“We brought these two business units together to deliver untapped growth opportunities,” said Regis Broersma, president and senior vice president of STG’s North America branded and rest of the world division. “Under the new structure, we will work together to capture increased market share while demonstrating an ongoing commitment to building both our Canadian and U.S. businesses.”
Essentra Filters has launched ECO Active Filter, the latest product in its proprietary range of sustainable filters. Developed as an alternative to active carbon acetate filters, ECO Active is plastic-free and 100 percent biodegradable.
“Our commitment toward achieving a sustainable future has never wavered,” said Global Marketing Manager Seng Keong Low. “ECO Active is the latest offering in our ECO range of products, and we continue to innovate new, high-quality, eco-friendly products to address the sustainability requirements of regulators, customers and end consumers.”
The ECO Active Filter is customizable for length, circumference, pressure drop, carbon types or carbon sizes and can be combined with other filter segments to suit customer requirements.
Participants hear from CTP Office of Science Director Matt Holman, among others.
The second day of TMA’s “From Chance to Change” online seminar included a presentation by U.S. Food and Drug Administration Center for Tobacco Products (CTP) Office of Science Director Matt Holman along with panel discussions titled “Early and Often: Navigating Your Path to Market” and “Connecting U.S. and Global Trends.”
Matt Holman
Holman discussed the FDA’s recent actions on premarket tobacco product applications (PMTAs), key considerations in the agency’s “appropriate for the protection of public health” determinations and the final rules for PMTAs and substantial equivalence reports.
Holman touched on the agency’s marketing granted orders (MGOs) to four Verve oral tobacco products—all of which were discontinued by Altria Group in 2019—and R.J. Reynolds Vapor Co.’s Vuse Solo vapor cigarette. In both cases, he said, the applicant had demonstrated that the products have lower toxicity levels and abuse liability risks than cigarettes along with minimal youth appeal.
In the PMTA final rule, Holman highlighted the ability for recipients of a marketing denial order (MDO) to rectify the shortcoming in their original application with a supplemental PMTA that cross-referenced the original application, thus streamlining the process for both applicant and reviewer.
Jennifer Smith
Holman then participated in a “Path to Market” panel discussion, moderated by Altria Client Services Director of Regulatory Advocacy Jennifer Smith, that also included Gerry Roerty, vice president, general counsel and secretary of Swedish Match North America; Tara Couch, senior director of dietary supplement and tobacco services at EAS Consulting Group; Elaine Round, vice president of scientific and regulatory affairs at RAI Services Co.; and Kimberly Hesse, tobacco lab testing expert.
One of the takeaways from this session was the importance of starting “with the end in mind.” Getting things right from the beginning will save applicants time and money because even minor product changes involve new, time-consuming applications under the FDA’s pathways.
According to one panelist, the first question in the journey to market should be: Can we make this product, and can we make it consistently? Applicants should think about samples and suppliers and conduct environmental assessments. With the FDA seeking greater consumer insights, applicants should look for professional assistance in obtaining such information. And it pays to involve product testers early in the process. Lab workers may be unfamiliar with the product and require explanations on its operations. And then there are safety considerations. Hesse recalled instances of products that sparked and ignited when connected to laboratory machinery.
Round said one lesson she learned from Reynolds’ successful Vuse Solo marketing application was that “bridging”—the referencing of existing studies—works, provided that the applicant explained it well. She also advised applicants to generate a volume of information that is “exactly enough and not too much.”
Several panelists mentioned the challenge of obtaining consumer insights in PMTAs. They suggested that the FDA should consider allowing more of that information to be gathered as part of post-market surveillance, which would have the added benefit of generating more realistic data.
Jeannie Cameron
The final session of the TMA webinar explored the differences and similarities between the U.S. and the rest of the world in terms of nicotine product regulation. Moderated by Jeannie Cameron, CEO and managing director of JCIC International, this panel included Abrie du Plessis, regulatory affairs counsel at the South African Trade Law Centre; Patricia Kovacevic, general counsel and head of external affairs and regulation strategy at Cryomass Technologies; Rob Koreneef, public affairs advisor; and Flora Okereke, head of global regulatory insights and foresights at BAT.
The discussion focused on the recently concluded ninth Conference of the Parties to the World Health Organization Framework Convention on Tobacco Control (FCTC), which was developed before the emergence of reduced-risk products and which the panelists agreed was “frozen in time.”
Du Plessis described the positions of the various health bodies in relation to reduced-risk products. The Conference of the Parties, he said, is divided on the issue, providing no guidance on new and emerging products. The WHO has slight ideological opposition to novel products whereas the FCTC secretariat—which has gradually evolved from an administrative body to an implementation agency—appears to have no use for reduced-risk products. The secretariat, said du Plessis, is focused on getting countries to implement the FCTC’s standard measures.
Okereke examined the diversity in regulatory regimes for novel tobacco products around the world. She distinguished three themes: how harm reduction is treated, the premarket approval process and product categorization. Tobacco harm reduction, she said, is acknowledged by regulators in the U.S., the U.K., Canada, Germany, Ireland and New Zealand. Everywhere else, it remains an elusive concept. The U.S. is the only country with a robust premarket requirement, and when it comes to categorization, the world is divided. Some countries put vapor products under existing tobacco regulations (EU); others regulate them as pharmaceuticals (Australia); and yet others ban the products altogether (Brazil, Mexico, Turkey and Japan).
Kovacevic highlighted the discrepancy between the United States, where the CTP, which is funded by industry user fees, is required to interact with the tobacco industry, and the rest of the world, where regulators keep the industry at arms’ length. She also pointed out the irony that even though the U.S. is not a party to the FCTC, it generates much of the science that the treaty’s signatories rely on—including industry science generated through the various marketing application processes.
During the question-and-answer session following the panel discussion, one participant asked why U.S. tobacco companies should care about the international environment. Kovacevic responded by describing the high barriers to entry in the U.S. If access to the U.S. market closes through MDOs, she pointed out, the only remaining market is abroad. And there is also a moral motive: Most of the smokers who stand to benefit from reduced-risk products live outside of the U.S., often in low-income and middle-income countries. If companies are committed to harm reduction, they have a civic duty to serve them, said Kovacevic.
Read our summary of the first conference day here.
A panel of three Court of Appeals judges unanimously reversed the parts of a 2019 Quebec Superior Court decision that struck down some provisions of the Tobacco Control Act pertaining to vaping products, reports Global News.
The Quebec Superior Court had ruled that some of the province’s restrictions on vaping products, such as banning advertising, went too far because they could possibly prevent smokers from switching to noncombustible products.
The appeals court judges cited research from the World Health Organization and other experts regarding the rise in youth vaping rates, ruling that the Quebec government has the right to limit potential effects of advertising on youth and nonsmokers.
“In this case, it was therefore reasonable for the legislator to intervene to limit the potential effect of electronic cigarette advertising, especially on young people,” Justice Benoit Moore wrote on behalf of the panel. “The risks associated with the fact that the vaping industry is evolving and that it is gradually being taken over by the tobacco companies cannot be excluded from the analysis of the legislator.”
The court also upheld the right to ban vaping product demonstrations inside shops or specialized clinics.
Altria Group launched its first standalone Task Force on Climate-Related Financial Disclosures (TCFD) Report. The TCFD was formed by the Financial Stability Board in 2015 to help companies provide decision-useful information about their climate-related risks and opportunities to investors. In 2017, the TCFD published final recommendations across four core elements: governance, strategy, risk management, and metrics and targets.
“Just as we believe in the benefits of a science-[based] and evidence-based approach for our industry and tobacco harm reduction, we believe in a science-based approach for climate action,” said Sal Mancuso, executive vice president and chief financial officer at Altria, in a statement. “We also acknowledge this is our first TCFD report, and expectations for environmental, social and governance [ESG] disclosure are rapidly changing. We intend to learn as we go while responding to this dynamic environment as we evolve our reporting in the future.”
This year, Altria disclosed its progress and key metrics for each of its responsibility focus areas: Protect the Environment; Reducing Harm and Preventing Underage Use; Drive Responsibility Through Our Value Chain; Supporting Our People and Communities; and Engage and Lead Responsibly.
Altria’s responsibility focus areas are guided by its materiality assessment process—a comprehensive, formal approach to identify the most impactful ESG issues that Altria believes are important to its long-term sustainability and success.
