Category: News This Week

New York Poised to Legalize Marijuana

Photo: Erin Stone from Pixabay
Lawmakers in New York state have agreed to legalize marijuana for recreational use. Legalization could bring the state about $350 million annually, according to a story in the Associated Press.
The legislation would allow recreational marijuana sales to adults over the age of 21 and set up a licensing process for the delivery of cannabis products to customers. Individual New Yorkers could grow up to three mature plants and three immature plants for personal consumption, and local governments could opt out of retail sales. The bill also sets aside revenues to cover the costs of everything from regulating marijuana to substance abuse prevention.
New York would set a 9 percent sales tax on cannabis plus an additional 4 percent tax split between the county and local government. It would also impose an additional tax based on the level of THC, the active ingredient in marijuana, ranging from $0.005 per mg for flower to $0.03 per mg for edibles.
If passed, the legislation would take effect immediately, though sales wouldn’t start until New York sets up rules and a proposed cannabis board. Assembly Majority Leader Crystal Peoples-Stokes estimated on March 26 it could take 18 months to two years for sales to start.
Fourteen U.S. states already allow residents to buy marijuana for recreational use.
The tobacco industry has been keeping an eye on opportunities created by the spreading legalization of cannabis.
March 30, 2021
Calls to Quit-Smoking Lines Plunge

Photo: Momentmal from Pixabay
Calls to U.S. quit-smoking help lines have dropped sharply during the coronavirus pandemic, according to a report released by the North American Quitline Consortium (NAQC) on Friday. At the same time, cigarette sales increased after years of steady decline, according to data from the Treasury Department.
Last year, calls to the national portal linking people to quit-smoking lines decreased by 27 percent compared to 2019, which translates to a drop of roughly 190,000 calls—the lowest call volume seen since 2007, according to data compiled by the NAQC. In recent years, annual call numbers have ranged from 700,000 to 900,000, the report said.
The largest drop, 39 percent, occurred in the three-month period from April to June during the height of lockdowns and when infections and deaths were skyrocketing.
Furthermore, rates of anxiety and depression were also on the rise at the time, with a third of Americans showing signs of the pandemic’s psychological toll.
The pandemic definitely had a big influence on whether or not people were able to quit smoking last year.
Linda Bailey, president and CEO, NAQC
Meanwhile, cigarette sales rose by 1 percent in the first 10 months of 2020 compared to the same period in 2019. Sales of cigarettes had been decreasing by 4 percent to 5 percent annually since 2015.
The NAQC annually analyzes data on the use of quit lines without issuing reports. But the changes were so big this year that the group decided to publish a report.
“We really were surprised by how dramatic the data was,” Linda Bailey, president and CEO of the NAQC, told The Washington Post. “It shows that the pandemic definitely had a big influence on whether or not people were able to quit smoking last year.”
Bailey attributes the drop in calls to smokers’ stress and anxiety caused by the pandemic. “They were worried about other things and just not able and not motivated to quit.”
The pandemic has hindered smoking cessation in other countries, too. During Italy’s lockdown, 5.5 percent of smokers surveyed in a recent study quit or reduced smoking, but 9 percent of the sample started smoking, relapsed smoking or increased their smoking intensity.
In total, the country’s lockdown increased cigarette consumption by 9.1 percent.
March 30, 2021
KT&G Opens Office in Taiwan

Photo: Taco Tuinstra
KT&G opened an office in Taiwan as part of the company’s ambition to become the fourth-largest tobacco manufacturer by 2025, reports The Korea Times.
Taiwan has been one of KT&G’s key markets since 2002 when the company began exporting to the island and upgraded products sold there with premium quality brands.
In 2020, KT&G sold more than 771 million cigarettes in Taiwan, up more than 2,200 percent from 2002.
“We will set up a team to bolster marketing and sales activities while working on new brands that fulfill consumers’ needs,” said Kim Na-mi, KT&G Taiwan Corporation head.
According to Kim, the market in Taiwan offers great potential. She noted that the country’s consumer spending is quickly recovering due to a highly effective Covid-19 response and that the country’s GDP growth will be higher than previously forecast.
March 30, 2021
Imperial Expects Results in Line With Guidance

Photo: Casimirokt | Dreamstime.com
Imperial Brands is on track to deliver full-year results in line with the guidance it gave in November, with low-to-mid single-digit organic adjusted operating profit growth at constant currency, the company announced in a trading update.
First half group net revenue is expected to grow by at least 1 percent on an organic constant currency basis, driven by continued strong pricing in tobacco as well as some benefit from growth in next-generation product (NGP) revenues against a weak comparator period.
“In tobacco, we have begun to achieve aggregate market share growth in our five priority markets with gains in [the] U.S., U.K. and Spain more than offsetting declines in Germany and Australia,” the company wrote in a statement. “We are investing behind the operational levers outlined at our January 2021 Capital Markets Day in each of these priority markets to drive performance improvements over time. Overall tobacco volumes are in line with expectations, although Covid-19 continues to affect consumer buying patterns across different channels and markets.
“In NGP, our clear focus is to improve performance, returns and capabilities. Our preparations for market trials in vapor and heated-tobacco later this year are on track.”
Imperial Brands expects first half group adjusted organic operating profit growth to be at least mid-single digit at constant currency, benefiting primarily from significantly reduced losses in NGP and increased logistics profit. Tobacco operating profit has been impacted by a lower duty windfall in Australia and the impact of U.S. trade inventories following the higher wholesaler purchases in March 2020 to meet Covid-19 pantry loading demand.
“Full-year adjusted group operating profit will reflect increased investment consistent with our strategic plans and is expected to be in line with our guidance for low-mid single digit organic growth at constant currency,” the company wrote.
The interim results for the six months ended March 31, 2021, will be announced on May 18, 2021.
March 30, 2021
Thailand to Start Producing Hemp

Photo: Rolf Hansen from Pixabay
The Tobacco Authority of Thailand (TOAT) plans to start planting hemp for commercial purposes by August, reports The Bangkok Post.
The Council of State is currently reinterpreting the Tobacco Authority of Thailand Act that states TOAT can only produce tobacco leaves and other plants. The council decides if TOAT is legally eligible to produce hemp for commercial purposes, said TOAT governor Panuphol Rattanakanjanapatra.
The decision is expected next week.
TOAT will focus on production of hemp in the preliminary stage, which can be used for medical and industrial purposes. TOAT aims to encourage 13,500 tobacco farmers to shift to hemp or cannabis farming to increase their income; the authority cut its tobacco leaf purchases to 13 million kg per year from 20 million kg per year.
March 30, 2021
Zimbabwean Growers Face ‘Debt Trap’

Poto: Taco Tuinstra
Tobacco farmers in Zimbabwe are facing a vicious debt trap, reports The Zimbabwe Independent, citing the Zimbabwe Tobacco Association (ZTA).
The government payment system ensures tobacco growers receive only part of their income in U.S. dollars with the remaining share being paid in Zimbabwean dollars at an inflated exchange rate.
Because most Zimbabwean growers have borrowed U.S. dollars from their contractors to finance their operations, this means they will have difficulties repaying their loans.
Of the approximately USD600 in export earnings generated annually by farmers only USD150 is flowing into the country, according to the ZTA.
For the longer part of last year, farmers were paid 50 percent of their revenues in forex with another half being paid in Zimbabwean dollars at a fixed rate of one U.S. dollar to 25 Zimbabwean dollars.
We plead with the authorities to review the foreign currency retention level before the start of the selling season.
Rodney Ambrose, CEO, ZTA
On the black market, however, one U.S. dollar fetched up to ZWD165 during the first quarter of 2020.
While the government has recently increased farmers’ foreign currency retention to 60 percent, it is insufficient to solve growers’ problems, according to the ZTA.
“Growers’ viability will not improve with the retention levels announced, and we plead with the authorities to review the foreign currency retention level before the start of the selling season,” said ZTA CEO Rodney Ambrose.
Zimbabwe’s tobacco markets are scheduled to open April 7.
Tobacco farmers’ profits have been declining while debts owed to contractors in U.S. dollars have been mounting. Industry representatives have also called on the government to stop basing the pricing of contract tobacco, which makes up 95 percent of national production, on the minimum of tobacco prices paid on the auction floors.
March 29, 2021
Tobacco Rejects Pricier Tax Stamps

Photo: International Tax Stamp Association
The Philippine Tobacco Institute (PTI) has rejected a plan by the government-run printing office to raise the cost of cigarette tax stamps from PHP0.15 ($0.003) to PHP0.23, reports The Manila Standard.
APO Production Unit has been appointed by the Bureau of Internal Revenue (BIR) to produce the security tax stamps on cigarettes. The project was rolled out in September 2014 to monitor the supply and sale of tobacco products and guarantee payment of excise taxes by manufacturers.
In a letter to APO Chairman and President Michael Dalumpines, PTI President Rodolfo Salanga said that APO is not a revenue-generating government agency, and its “monopoly” of producing the tax stamps is for regulatory purposes and not to raise revenues.
“We believe that the eight centavos printing cost increase from the current 15 centavos per internal revenue stamp to the proposed 23 centavos is unconscionable and excessive.
We wish to emphasize that the intent for the internal revenue stamp is to ensure the collection of excise taxes,” said PTI, which represents Philippine cigarette manufacturers, exporters and leaf suppliers.
We believe that the eight centavos printing cost increase from the current 15 centavos per internal revenue stamp to the proposed 23 centavos is unconscionable and excessive.
Rodolfo Salanga , president, PTI
APO cited higher ink and paper costs as reason for the price hike. During meetings with stakeholders, the printing agency presented the cost of producing each tax stamp as PHP0.11.
PTI said it was amenable to a PHP0.02 increase per stamp on the current PHP0.15, which would still give APO a net profit from its production cost. The group said the last increase in 2018 was also PHP0.02 from the initial price of 13 centavos in 2014.
March 29, 2021
JTI Releases Collateral to Malawi Growers

Photo: Taco Tuinstra
Japan Tobacco International (JTI) Leaf Malawi has released MKW581 million ($739,381) of collateral to its contracted growers to assist them during the lean farming season and help them cope with the economic impact of the Covid-19 pandemic, reports Malawi24.
The growers paid the money to JTI at the beginning of the farming season as security to enter into contracts with the company.
JTI Leaf Malawi Corporate Affairs and Communications Director Limbani Kakhome said that this money is given back to the growers to help with their day-to-day livelihood needs as well as production costs.
He added that tobacco production is quite involving financially and therefore the company feels duty bound to help its growers meet production demands to come up with top quality tobacco.
“This is the more reason why for more than four years we have been undertaking this program. We give out the funds between January and February because around this time, there are just many activities that require money.
“Over the years, the quality index of tobacco produced by our growers when compared with quality from other countries has been growing steadily. This is attributed not only to the quality of extension services we provide to growers but also to other programs like this,” he explained.
A total of 8,000 growers have received money through the initiative.
Tobacco Reporter covered the Malawi market in-depth in its June 2017 issue. (See “On the Map.”)
March 29, 2021
BATSA opens first VUSE Inspiration store

Photo: BAT
British American Tobacco South Africa (BATSA) has opened the first VUSE Inspiration store in South Africa in the Canal Walk shopping center in Cape Town.
VUSE Inspiration stores will be opened at 67 existing sites throughout South Africa.
“To date, we have made an extensive investment in bringing Twisp into BATSA’s portfolio, and we plan to invest further in our tobacco harm reduction strategy in South Africa,” said BATSA General Manager Johnny Moloto in a statement. “We will be expanding our number of kiosks, investing in bringing our new products to market and enhancing the skills of our BAT team.”
Another 15 new sites in key locations will be added to the VUSE network by December as part of a significant expenditure project.
“The opening of our first flagship VUSE Inspiration store in South Africa is an important milestone in delivering on our harm reduction strategy and our investment in science and innovation to demonstrate the potential of our extended portfolio of products,” said Moloto.
March 29, 2021
PMI Nominates New Board Members

Photo: PMI
Philip Morris International’s (PMI) board of directors has nominated two new members, Juan José Daboub and Shlomo Yanai. Additionally, Jacek Olczak has been nominated to the board following the announcement of his appointment as CEO, a role he will assume immediately following the annual shareholders meeting on May 5.
Daboub started his career as an engineer before moving into government. In 1999, he was the youngest senior cabinet member in El Salvador, serving first as chief of staff to the president and then as minister of finance. Later, as a managing director at the World Bank Group, he was credited with having driven several corporate initiatives and reforms, including leading the institution’s global agenda on governance and anti-corruption.
Over the past decade, Daboub has focused on climate adaptation and energy transition through public and private investment vehicles and not-for-profit organizations, including as chair of the Council on Climate Change at the World Economic Forum and founding CEO of the Global Adaptation Institute. He is currently president of The Daboub Partnership and of ThinkHUGE USA-Central America Job Creation Council.

José’s experience across multiple business sectors, combined with his deep understanding of geopolitics and international institutions, will be a great addition to the PMI board.
Lucio Noto, interim chairman, PMI
“Juan José fully embraces PMI’s commitment to delivering a smoke-free future,” said Lucio Noto, PMI’s interim chairman, in a statement. “José’s experience across multiple business sectors, combined with his deep understanding of geopolitics and international institutions, will be a great addition to the PMI board.”
Yanai was president and CEO of Teva Pharmaceutical Industries from 2007 to 2012. In that time, he led the company’s international expansion and increased annual revenues by nearly $10 billion. Prior to that, Yanai was president and CEO of ADAMA for three years. His time at those organizations and later as a board member or chair of several other companies in the pharma space, as well as his current position as chairman of the board of Lumenis, a medical devices company, have given Yanai a solid understanding of the science behind drug discovery, development and regulation. He served in the Israeli Defense Forces for more than 30 years, reaching the rank of major general. In his military career, Yanai worked extensively with politicians and public sector bodies.
“The combination of Shlomo’s broad board experience and his knowledge of the pharma industry and its regulatory processes will bring to the board an extremely relevant set of skills as PMI continues to develop and commercialize scientifically validated smoke-free products and starts deploying its beyond nicotine strategy,” said Noto.
The nominations announced today follow the appointments of Michel Combes and Bonin Bough to the board of directors in December 2020 and February 2021, respectively. Combes is president of SoftBank Group International and oversees several SoftBank portfolio companies. He was chief financial officer and then CEO and a member of the board of directors of Sprint, CEO of Vodafone Europe, CEO of Alcatel-Lucent, CEO and chief operating officer of Altice, and chairman and CEO of SFR Group.
March 26, 2021