Category: News This Week

Tobacco Earnings Reach Half Billion

Photo: Taco Tuinstra
Zimbabwe has earned $500 million from tobacco sales since the start of the 2021 selling season, reports The Manica Post.
Statistics released by the Tobacco Industry and Marketing Board (TIMB) indicate that the highest price offered for tobacco grown under contract this season is $6.70 per kg, up from $4 last year.
According to estimates, at least 200 million kg of tobacco will be sold this season compared to 180 million kg, valued at $452 million, which were sold last year.
Crop hectarage went up by 6.84 percent from 117,000 hectares during the 2019–2020 season to 125,000 hectares of crop this year.
At day 60, at least 190 million kg valued at $500 million had been sold at an average price of $2.75, up from $2.44 last year.
About 151 million kg, valued at $360 million, were sold during the same period last year.
The TIMB has set the minimum support package that every contractor should provide to a farmer at $1,000 per hectare for smallholder farmers and $4,000 per hectare for commercial farmers.
July 4, 2021
FDA Urged to Extend Enforcement Deadline

Photo: Oleksandr Moroz
A coalition of 23 organizations has asked the U.S. Food and Drug Administration to follow the recommendations of the Small Business Administration (SBA). Earlier this year, the SBA urged the FDA to allow nicotine products to remain on the market for another year after the current Sept. 9, 2021, deadline while their premarket reviews are in progress.
Due to the large volume of PMTAs submitted—the FDA says it received more than 6 million applications—the FDA will unlikely be able to process all submissions before manufacturers are required to pull their products off the market, according to the SBA.
In a letter to the FDA prepared by the Americans for Tax Reform (ATR), the 23 organizations say that the FDA’s promise to exercise discretion in its enforcement provides insufficient certainty for businesses who have complied with all relevant regulations and have not received authorization due to processing delays by the FDA.
If an extension is not granted, the letter cautions, there could be devastating consequences for businesses, particularly small businesses. Furthermore, any potential reduction in the supply of safe alternatives to tobacco could have a negative impact on public health across the United States and lead to an increase in tobacco-related mortality, according to the authors.
The letter also argues that “millions of consumers who depend on ENDS products for their health and thousands of businesses who depend on these products for their livelihood are threatened by this needless bureaucratic uncertainty.” The only way to avert such an adverse outcome for businesses and consumers is for the FDA to obtain a court order allowing it to extend the existing moratorium on enforcement by another year, according to the letter writers.
“The vaping industry, unlike many others, was created by small businesses, and these same small businesses continue to drive innovation in the market,” the coalition letter states. “Without these entrepreneurs, the vape industry will be consolidated into a few large corporations, causing prices to rise and consumer choice to decrease.”
July 4, 2021
22nd Century Reworks Panacea Investment

Photo: Mitch
22nd Century Group has signed a definitive agreement to restructure its strategic investment in Panacea Life Sciences in line with the ongoing development of 22nd Century’s strategic partnership network.
Under terms of the agreement, 22nd Century’s existing $7 million note in Panacea will be exchanged for ownership of Needle Rock Farms, located in a Colorado hemp/cannabis growing location and valued at $2.2 million. The company will also receive a new $4.3 million note and $500,000 in Panacea equity. The new note is backed by a mortgage on the Panacea Life Sciences operations building located in Golden, Colorado, appraised at $10.7 million. Panacea will retain certain farm assets under its own nameplate of PANA Organic Botanicals at Needle Rock.
Also under the agreement, $7 million in Panacea Life Sciences Series B Preferred Stock held by 22nd Century will be converted into 91 million shares of Exactus as part of a business combination transaction via share exchange with Panacea under which Panacea will become publicly traded. The transaction is expected to be immediately accretive to 22nd Century.
“This exchange is an exciting leap forward for 22nd Century as we advance our upstream value chain strategy to bring highly disruptive hemp and cannabis plant lines to market. It is also highly attractive to 22nd Century on a financial basis, creating immediate value, asset-backed future value and potential future liquidity from an existing investment,” said James A. Mish, CEO of 22nd Century Group, in a statement.
“Needle Rock Farms is a world-class farming operation in a prime growing location where we already have plants in the ground toward our goal of revenue recognition from our cannabis franchise in the second half of 2021. We will also retain access to Panacea’s extraction, purification and testing equipment located in Golden, Colorado, for the benefit of our customers.”
“Rapidly growing demand means that mass cultivation is quickly becoming the critical challenge in the cannabis industry. Most existing plant lines do not exhibit the stable genetics, predictable yield or specific composition of cannabinoids required to fully unlock the value of the cannabis industry,” said Mish. “22nd Century can provide the stable, predictable plant solutions required to achieve true commercial scale and do so in as little as two years versus 7 to 10 years through traditional processes.”
July 2, 2021
Nederhoff joins Poda Lifestyle and Wellness

Photo: Poda Lifestyle and Wellness
Former Juul Canada President Michael Nederhoff has joined Poda Lifestyle and Wellness as a member of the global advisory board and consultant to Poda’s management team and the company’s board. As part of the consulting agreement, Nederhoff will be assisting Poda with its global expansion.
At Juul, Nederhoff was instrumental in dealing with commercial and regulatory aspects of the e-cigarette market. In addition, Nederhoff was previously responsible for launching Red Bull and CytoSport into Canada, and he is currently the CEO of Shelter.
“Poda’s revolutionary heat-not-burn product is exactly what I was looking to get behind to support a smoke-free future,” said Nederhoff in a statement. “There are more than 1.3 billion smokers in the world, and reduced-risk smoking products are essential to the longevity of this large population. I look forward to using my extensive experience in launching major CPG products to assist Poda as they roll out their global strategy.”
“Bringing Mr. Nederhoff onto the Poda team marks the addition of yet another seasoned industry-specific executive to our global advisory board, and we now have a well-rounded slate of proven leaders,” said Poda CEO Ryan Selby.

Bringing Mr. Nederhoff onto the Poda team marks the addition of yet another seasoned industry-specific executive to our global advisory board, and we now have a well-rounded slate of proven leaders.
Ryan Selby, CEO, Poda Lifestyle and Wellness
“Mr. Daniel Chen brings phenomenal experience and expertise in the global manufacturing and distribution realm and has worked with some of the biggest tobacco companies globally, including Japan Tobacco International, Imperial, British American Tobacco, Godfrey Philips India, Philip Morris International and China National Tobacco.
“Jon Ruiz spent over 15 years as a top-level executive at Philip Morris International—one of the largest tobacco companies in the world and the current leader in the global heat-not-burn market with their IQOS product.
“Mr. Michael Nederhoff is an expert in the fast-moving consumer goods market and was the Canadian president of the most successful e-cigarette company in the world (Juul). These individuals have joined the Poda team because they believe in the massive potential for Poda to capture substantial market share in the rapidly growing global heat-not-burn market. We already have an incredible product in Poda and our Beyond Burn Poda Pods, and now we are continuing to build an incredible team of proven professionals to support our global expansion goals. This is another major step toward our goal of becoming a major player in the global heat-not-burn market” stated Selby.
Pursuant to the consulting agreement, Poda has granted 485,000 restricted share units to Nederhoff at a price of $1.39.
July 2, 2021
Study Confirms HnB Harm Reduction
Photo: BAT
New research published today in Internal and Emergency Medicine provides the first real-world evidence that people switching from cigarettes to exclusive use of glo, BAT’s flagship tobacco-heating product (THP), can significantly reduce their exposure to certain toxicants and indicators of potential harm related to several smoking-related diseases compared with continuing to smoke.
The results, recorded at six months of a 12-month study, showed that switching completely to glo resulted in statistically significant changes across a range of “biomarkers of exposure” (BoE) and indicators of potential harm, known as “biomarkers of potential harm” (BoPH), compared with continuing to smoke.
For most biomarkers measured, the reductions seen in people using glo were similar to those in participants who stopped smoking completely.
Based on the toxicants measured, glo users showed a:
Significant reduction in a biomarker for lung cancer risk;
Significant reduction in white blood cell count, an inflammatory marker indicative of cardiovascular disease (CVD) risk and other smoking-related diseases;
Improvement in HDL cholesterol associated with reduced risk of CVD;
Improvements in two key indicators of lung health; and
Improvement in a key indicator of oxidative stress, a process implicated in several smoking-related diseases, such as CVD and hypertension.
“These are exciting results as they allow us to understand the potential for reduction of risk that switching completely to glo can deliver,” said David O’Reilly, director of scientific research at BAT, in a statement. “The study shows that smokers switching to glo can reduce their exposure to certain toxicants, which reduces their risk of developing certain smoking-related diseases.
“To have shown a significant reduction in measures of BoPH, some comparable to quitting completely, is very encouraging and provides further scientific substantiation of the harm reduction potential of glo and how it supports our ambition to build ‘A Better Tomorrow’ by reducing the health impact of our business.”
Read more about BAT’s glo trial in Tobacco Reporter’s July 2021 issue.
July 1, 2021
Philip Morris to Acquire Fertin Pharma
Photo: peshkov
Philip Morris International has entered into an agreement to acquire Fertin Pharma, a leading developer and manufacturer of innovative pharmaceutical and well-being products based on oral and intra-oral delivery systems, for an enterprise value of DKK5.1 billion ($820 million).
“The acquisition of Fertin Pharma will be a significant step forward on our journey toward delivering a smoke-free future—enhancing our smoke-free portfolio, notably in modern oral, and accelerating our progress in beyond nicotine,” stated Jacek Olczak, chief executive officer of PMI, in a statement.
“Both PMI and Fertin share a commitment to science and consumer-centric innovations for better living, and I am delighted we have reached this agreement. Fertin’s diverse portfolio of technologies, evolving business mix and world-class expertise will enrich our innovation pipeline and capabilities, providing speed and scale in oral delivery to support our 2025 goals of generating more than 50 percent of our net revenues from smoke-free products and at least $1 billion from products beyond nicotine.”
Fertin Pharma is a privately held company with more than 850 employees and operations in Denmark, Canada and India. It is a contract development and manufacturing organization (CDMO) specializing in the research, development and production of gums, pouches, liquefiable tablets and other solid oral systems for the delivery of active ingredients, including nicotine, where it is a leading producer of nicotine replacement therapy (NRT) solutions.
According to PMI, the company and its employees bring significant scientific experience and know-how to the development of innovative solutions, driving above-category growth across new and existing business areas. In 2020, Fertin Pharma generated net revenues of DKK1.1 billion. The transaction value represents a multiple of around 15 times Fertin Pharma’s 2020 EBITDA.

Fertin’s diverse portfolio of technologies, evolving business mix and world-class expertise will enrich our innovation pipeline and capabilities.
Jacek Olczak, CEO, PMI
Fertin Pharma is currently owned by the global investment organization EQT and Bagger-Sorensen & Co. Upon the completion of the acquisition, Fertin Pharma will become a wholly owned subsidiary of PMI. PMI will fund the transaction with existing cash and expects it to close in the fourth quarter of 2021, subject to approval by the appropriate regulatory authorities. PMI expects the impact of the acquisition on its full-year 2021 adjusted diluted EPS to be immaterial.
“Fertin Pharma has been on a fantastic journey with EQT and the Bagger-Sorensen family as owners,” said Peter Halling, CEO of Fertin Pharma, in a press note. “With the new ownership in place, Fertin Pharma will be in a great position to continue delivering on our vision and mission, including our work as a CDMO for our customers.
“PMI is going through an inspiring transformation as a company with an ambition to deliver a smoke-free future and building a beyond nicotine product portfolio. An ambition that perfectly matches that of Fertin Pharma, namely to enable people to live healthier lives. In PMI, we have found a new owner and partner who shares our vision, who is committed to science and who will enable Fertin Pharma to further accelerate and grow as a company.”
With the acquisition of Fertin Pharma, PMI will:
Gain substantial know-how for the development, formulation and commercialization of current and additional smoke-free platforms—including the ability to accelerate its presence in the fast-growing modern oral category, providing superior consumer experience through a broad range of smoke-free products such as nicotine pouches and lozenges.
Leverage on Fertin’s oral delivery platforms to access a range of promising technologies—complementary to PMI’s inhalation expertise—for scientifically substantiated botanicals and other self-care wellness products, including over-the-counter solutions and supplements that improve people’s lives in areas such as sleep, energy, calm and focus.
Further build its overall platform of R&D and manufacturing expertise in nicotine and beyond nicotine product areas through the addition of Fertin’s strong capabilities and skilled workforce, including 80 scientists.
Accelerate progress on key sustainability priorities, notably in broadening the reach and access of its smoke-free alternatives to adult smokers around the world to accelerate the end of smoking and building a strong beyond nicotine business.
Earlier this year, PMI announced its goal to generate more than 50 percent of its total net revenues from smoke-free products by 2025. In addition to its continued commitment to achieve a smoke-free future, PMI says it aims to leverage capabilities in life sciences, product innovation and clinical expertise to expand its portfolio beyond tobacco and nicotine with scientifically substantiated products and solutions that improve people’s lives and generate a net positive impact on society.
July 1, 2021
Study: Vaping Better Than NRT for Cessation

Photo: bedya
A new study by Queen Mary University of London, published in Addiction, shows that e-cigarettes are more effective in achieving long-term smoking reduction and cessation than nicotine-replacement therapies (NRT).
The study randomized 135 smokers who had been unable to stop smoking with conventional treatments into two groups—one received an eight-week supply of their choice of NRT and the other received an e-cigarette starter pack with instructions to purchase further e-liquids of their choice of strength and flavor. Products were accompanied by minimal behavioral support.
After six months, 27 percent of those in the e-cigarette group had reduced smoking by at least half compared to 6 percent in the NRT group. Of the participants in the e-cigarette group, 19 percent had stopped smoking altogether versus 3 percent in the NRT group.
“These results have important clinical implications for smokers who have previously been unable to stop smoking using conventional treatments,” said Katie Myers Smith, lead researcher and health psychologist, in Eurasia Review. “E-cigarettes should be recommended to smokers who have previously struggled to quit using other methods, particularly when there is limited behavioral support available.”
“This study shows e-cigarettes can be a very effective tool for people who want to stop smoking, including those who’ve tried to quit before,” said Michelle Mitchell, CEO of Cancer Research U.K., which funded the study. “And research so far shows that vaping is far less harmful than smoking. But e-cigarettes aren’t risk free, and we don’t yet know their long-term effects, so people who have never smoked shouldn’t use them.”
July 1, 2021
New Tobacco Producers’ Association in Croatia

Photo: Branex
Industry stakeholders have formed a new tobacco producers’ association in Croatia, reports Total Croatia News.
The new association, called Tabacum, aims to provide members with better and safer conditions for tobacco production. To date, 57 Croatian tobacco producers, farming about 667 hectares of tobacco in the Podravina and Slavonia regions, have joined the new group.
“We want a secure future for our investments and our work in production,” said Mihael Colak, president of Tabacum. He noted that Tabacum will promote more intensive dialogue with the Ministry of Agriculture, the Croatian Chamber of Commerce, the Croatian Chamber of Agriculture, and it will aim for a more stable and better situation for tobacco producers on the Croatian market.
“Given that tobacco is one of the most profitable agricultural crops in all of Croatia, where the annual value of production exceeds 100 million kuna [$15.85 million], we believe that in our efforts, we will be supported by counties in which tobacco is primarily produced,” said Colak. “We’re convinced that the further strengthening of production is in the interest of all Croatian tobacco producers.”
July 1, 2021
Washington, D.C., Flavor Ban Moves Forward

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The Washington, D.C., council voted to ban the sale of flavored tobacco products, including menthol cigarettes, reports The Washington Post. The vote passed with an eight-to-five majority after a long debate around concerns that the ban could create more opportunities for police to harass Black smokers and that the ban would be “unfairly targeting a smoking choice preferred by Black residents.”
The bill will now head to Mayor Muriel E. Bowser, who is expected to sign it into law.
With this legislation, D.C. joins Massachusetts and other cities across the country in banning menthol cigarettes and other flavored tobacco products.
The bill bans the sale of flavored products but does not criminalize smoking menthol cigarettes. The council approved a change to the bill stating that city police do not have the authority to act on their own to enforce the ban. The Department of Consumer and Regulatory Affairs could still call police for assistance, though.
There is one exception: Hookah bars that already have an exemption from the city’s indoor smoking ban can continue offering flavored hookah for use on their premises.

D.C.’s projection that it will lose just $3 million in taxes by banning flavored tobacco products is a heroically wishful one.
Guy Bentley, director of consumer freedom research, Reason Foundation
Critics said the legislation’s safeguards against racial injustice are insufficient. “The police remain responsible for arresting those selling untaxed cigarettes,” wrote Guy Bentley, director of consumer freedom research at Reason Foundation. “If the bill passes, all flavored tobacco products illicitly sold in the district will be untaxed. Those selling or purchasing these products are vulnerable to police interactions.”
Bentley also pointed to likely loss of tax revenues. “D.C.’s projection that it will lose only $3 million in taxes by banning flavored tobacco products is wishful thinking,” he wrote.
According to Bentley, Massachusetts lost more than $140 million in tax revenues from menthol cigarette sales in the 11 months following its June 2020 ban on tobacco flavors. “Eighty-eight percent of Massachusetts’ lost tobacco sales were made up for by increased tobacco sales in nearby Rhode Island and New Hampshire,” he wrote.
June 30, 2021
Pyxus Releases Full-Year Financial Results

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Pyxus International announced results for its quarter and fiscal year ended March 31, 2021.
Combined sales and other operating revenues were $1.33 billion, down 12.8 percent from the prior fiscal year. Combined gross profit as a percent of sales was 12.1 percent, which decreased 2.6 percent from the prior fiscal year.
Combined selling, general and administrative expenses were $197.9 million, which decreased $1.1 million, or 0.6 percent, from the prior fiscal year.
Combined net loss attributable to Pyxus International was $117.7 million, which decreased $147 million, or 55.5 percent, from the prior fiscal year.
Combined adjusted EBITDA was $93.5 million. Total long-term debt was substantially reduced when compared to the prior fiscal year. Year-end uncommitted inventory was the lowest it has been since fiscal 2016.
“In what was an unprecedented and challenging year, our company adapted to constant change as we navigated the Covid-19 pandemic,” said Pieter Sikkel, Pyxus’ president and CEO, in a statement. “During fiscal 2021, we implemented a series of restructurings and process changes that allowed our business to continue to operate through the Covid-19 pandemic while also positioning us for success in fiscal 2022 and beyond. Through these actions, we substantially reduced our debt and costs throughout our supply chain. We also made the strategic decision to exit our cash flow negative Canadian cannabis businesses, which further supports our SG&A cost containment efforts.”

Based on expected first-quarter results, we are optimistic about fiscal 2022.
Pieter Sikkel, president and CEO, Pyxus International
“Although our production facilities continued to operate through the pandemic, certain facilities experienced lower production levels than planned due to smaller crop sizes in Africa and the implementation of social distancing requirements and safety practices to reduce the spread of Covid-19 and protect our employees. In addition, the Covid-19 pandemic-related shipping delays of leaf tobacco for certain customer orders resulted in a shift of between $170 million and $180 million of expected revenue and $30 million and $34 million of expected EBITDA from fiscal 2021 into fiscal 2022. However, the impact of Covid-19 on our business yielded innovative changes that will enable us to be more flexible in the future and accelerate certain activities in the crop cycle. Covid-19 has also pushed the tobacco industry to continue to look for ways to reduce supply chain complexity in a responsible manner.
“For the full year, we are expecting fiscal 2022 sales to be between $1.65 billion and $1.8 billion, SG&A expense to be between $140 million and $145 million (excluding nonrecurring items and potential changes in foreign currency exchange rates) and adjusted EBITDA to be between $150 million and $170 million. Based on expected first-quarter results, we are optimistic about fiscal 2022. Lastly, we are also excited about sharing more information about our enhanced global environmental, social and governance strategy, which supports our ability to deliver on our expected results for fiscal 2022.”
June 30, 2021