Category: News This Week

  • More Liquid Makers Receive Warnings

    More Liquid Makers Receive Warnings

    Photo: Eugene Onischenko | Dreamstime.com

    On March 12, the U.S. FDA sent warning letters to 13 firms that manufacture and sell unauthorized e-liquids. The regulatory agency advised the companies that selling products lacking a premarket authorization is illegal, and therefore, the products cannot be sold or distributed in the U.S.

    According to the FDA, the firms did not submit a premarket tobacco product application (PMTA) by the Sept. 9, 2020, deadline. The recipients of the warning letters are VapinUSA, Vapor Springs, Vapor Cigs, Vegas Vapor Emporium, Vape 911, The Philosopher’s Stone, The Clean Vape, Tooters Vape Shop, Cloudchasor, Boardwalk Elixir, Dieselbycg-Hometown Vape Lounge, Blue Lab Vapors and Revolution Vapor.

    “While each warning letter issued today cites specific products as examples, collectively these companies have listed a combined total of more than 75,000 products with the FDA,” the agency wrote in its statement.

    Following an initial set of such warning letters announced earlier this year, the FDA has continued to issue additional warning letters for products that failed to submit a PMTA.

    Per a court order, applications for premarket review for certain deemed new tobacco products on the market as of Aug. 8, 2016—including e-liquids—were required to be submitted to the FDA by Sept. 9, 2020. For companies that submitted applications by that deadline, the FDA generally intends to continue to defer enforcement for up to one year pending FDA review, unless there is a negative action taken by the FDA on the application.

  • Growers Welcome Increased Forex Cap

    Growers Welcome Increased Forex Cap

    Photo: Taco Tuinstra

    The Tobacco Farmers Union of Zimbabwe (TOFUZ) has praised the government for increasing the nation’s foreign currency retention cap from 50 percent to 60 percent ahead of the 2021 tobacco selling season, reports All Africa.

    Growers are now able to purchase and/or supplement their foreign exchange requirements from the auction system. The union had called for a 70 percent retention cap but noted that 60 percent was still a positive level for tobacco leaf growers.

    “Though we would have wanted 70 percent forex retention for farmers, we applaud the RBZ [Reserve Bank of Zimbabwe] and the Ministry of Agriculture for the policy review, which is set to benefit farmers,” a TOFUZ spokesperson said.

    This will certainly see an increase in tobacco production.

    “This will certainly see an increase in tobacco production as farmers will increase hectare capacity. Our concern as a union is to see totally empowered tobacco farmers who can independently make decisions without conditions as the case with contract farming. Given that tobacco is the country’s largest single foreign currency earner after gold and it contributes much to our economic growth as a nation, tobacco farming should be promoted through supportive input loan facilities.”

  • Dutch Smoking Prevalence Down

    Dutch Smoking Prevalence Down

    Photo: Tobacco Reporter archive

    Adult smoking prevalence rate for occasional smokers in the Netherlands was 20 percent in 2020, down from 22 percent in 2019, Statistics Netherlands revealed.

    For daily smokers, the prevalence rate remained at 15 percent for 2020 and 2019. The survey also noted that 46 percent of adults said that they never smoked and that 34 percent said that they formerly smoked, figures that were also the same for 2020 and 2019.

    The percentage of nonsmokers aged 18 and over who said that they have never been or were barely exposed to environmental tobacco smoke rose from 75 percent in 2019 to 79 percent in 2020.

    The Dutch government aims to reduce smoking among adults to 5 percent by 2040, according to Statistics Netherlands.

  • Illegal Cigarette Factory Dismantled in Denmark

    Illegal Cigarette Factory Dismantled in Denmark

    Police arrested 13 individuals for smuggling counterfeit cigarettes from a clandestine factory in Denmark to the United Kingdom, reports Europol.

    A timely exchange of intelligence via Europol between the Danish, Dutch and Polish investigators facilitated the investigation carried out in the framework of the European Multidisciplinary Platform Against Criminal Threats.

    On March 2, law enforcement officers dismantled an illegal cigarette factory in Vamdrup. This is the first illegal cigarette factory to be dismantled in Denmark. Police arrested 13 individuals of Polish and Ukrainian nationality and confiscated 11 million cigarettes alongside 11 tons of raw tobacco and a full production line.

    Forensic analysis is still ongoing to quantify the factory’s exact production capacity, which is presumably several million cigarettes per week.

    The value of the seized tobacco products on the illegal market in the United Kingdom is believed to be in the region of €13 million ($15.5 million).

    The action in Denmark led to another one in the Netherlands that same week. Investigators of the Dutch Fiscal Information and Investigation Service searched the premises of a warehouse in Ospel. Eight pallets of contraband cigarettes stored in maritime containers were seized, worth close to €1 million in the destination market. 

    The cigarettes produced in Denmark were shipped to the U.K. via the Netherlands.

  • U.K. High Court Revokes BAT Patents

    U.K. High Court Revokes BAT Patents

    Photo: Oliver Le Moal

    The U.K. high court has revoked two British American Tobacco (BAT) e-cigarette patents, reports World Intellectual Property Review. In doing so, the court dismissed BAT’s claim that Philip Morris International (PMI) infringed on the patents with its IQOS tobacco-heating product line.

    Justice Richard Meade on March 9 concluded that the BAT patents lack an “inventive step” over PMI’s patent. 

    One of the BAT patents, EP 3 398 460 B1, covers an “aerosol-generating device with housing and a cigarette” whereas the other, EP3491944, refers to a cigarette “for use with” an aerosol-generating device.

    Meade argued the patents merely covered a method of getting reconstituted tobacco into a cigarette form, and all methods of which—including rolling, gathering a sheet or cutting—were limited and would be obvious to a skilled team.

    Both patents were found invalid for added matter and obviousness. However, Meade also concluded that, if the patents were valid, PMI’s IQOS products would have infringed them.

    The tobacco giants have been quarreling over intellectual property for several years.

    In 2018, PMI filed a complaint against BAT’s heated-tobacco products in Japan. PMI alleged that some technological features of BAT’s Glo device infringed on two of PMI’s Japanese patents.

    In May 2020, BAT’s R.J. Reynolds subsidiary filed a lawsuit against PMI in the U.S. and Germany claiming that the IQOS tobacco-heating technology infringed patents for Reynolds’ Vuse vaping system.

    In June 2020, PMI filed counterclaims, arguing that R.J. Reynolds’ vapor products infringed multiple patents owned by PMI and its U.S. partners, Altria Client Services and Philip Morris USA.

    The patents are also currently in dispute in Munich.

  • White Cloud Ends Online Sales Due to Mail Ban

    White Cloud Ends Online Sales Due to Mail Ban

    Photo: White Cloud Electronic Cigarettes

    White Cloud Electronic Cigarettes, a stalwart in the vaping industry, will end all online sales for U.S. customers after the U.S. Postal Service stops shipping e-cigarettes on March 26. In a post on its Facebook page, the vapor company said that it will continue to fill international orders and will post a list of retail stores that will still carry White Cloud products in the U.S.

    “This was not a decision we wanted to make, especially after putting so much effort into submitting our PMTAs to the FDA and ensuring our products never reached the hands of minors,” the company wrote on Facebook. “But, after spending the last couple of months searching for a solution to the vape mail ban, we’ve reached the end of all possible options, and there is simply nothing we can do to continue shipping domestically.

    This was not a decision we wanted to make, especially after putting so much effort into submitting our PMTAs to the FDA.

    White Cloud asked vapor industry advocates to send a message to Congress and support the Consumer Advocates for Smoke-free Alternatives Association (CASAA) in its efforts to protect consumers’ right to access reduced harm alternatives. CASAA has organized a campaign to fight the U.S. mail ban.

    White Cloud is not the first vapor company to suffer from the shipping ban. In March, Logic said it would end online sales of its e-cigarettes to U.S. customers.  Securience announced a merger with VapinDirect to better cope with the shipping restrictions. Lizard Juice e-liquids also said it would stop mailing products to consumers.

  • Minton: Mail Ban Will Benefit Cigarettes

    Minton: Mail Ban Will Benefit Cigarettes

    The U.S. Postal Service’s pending ban on shipping e-cigarettes, scheduled to take effect at the end of March, will likely drive vapers back to cigarettes, according to Michelle Minton, a senior fellow specializing in consumer policy for the Competitive Enterprise Institute, a free-market public policy organization based in Washington, D.C.

    The real goal is to hurt the legal vaping industry.


    Writing in the National Review, Minton cautioned against the unintended consequences of the measure. “Supporters of the law seem to think that if they force adults to quit vaping, they will simply quit using nicotine altogether. They’re dead wrong,” she wrote.

    Minton also noted that e-cigarette manufacturers cannot simply switch to private carriers, such as FedEx or UPS, because these companies don’t deliver to all addresses, particularly in rural areas. “Private carriers actually rely on USPS to make ‘last mile’ deliveries,” she wrote.

    Minton said that there are less extreme approaches to stop underage consumers from illegally purchasing nicotine products online, including ID checks on delivery. But reducing underage access is not the purpose of the law, she suggested. “The real goal is to hurt the legal vaping industry.”

  • BAT and Organigram Partner on Cannabis

    BAT and Organigram Partner on Cannabis

    Photo: Tobacco Reporter archive

    The BAT Group (BAT) has signed a strategic collaboration agreement with Organigram, a wholly owned subsidiary of publicly traded Organigram Holdings, focused on research and product development activities of next-generation adult cannabis products with an initial focus on cannabidiol (CBD).

    This agreement augments ongoing BAT activities to expand its portfolio “beyond nicotine” and follows the pilot launch of Vuse CBD Zone in Manchester, U.K., earlier this year.

    Through the collaboration, BAT will gain access to cutting-edge R&D technologies, product innovation and cannabis expertise, complementing BAT’s extensive plant-based expertise and development capabilities.

    Organigram has a proven track record of consumer-led innovation and developing high-quality adult-use recreational and medical cannabis products, which are legally available in Canada.

    We believe this collaboration has significant potential to enhance our activities.


    “Today’s announcement underscores our commitment to accelerating our transformation and building ‘A Better Tomorrow,’” said David O’Reilly, director of scientific research at BAT, in a statement. “Our multi-category, consumer-centric approach, which is key to our transformation, aims to provide choice and meet the evolving needs of adult consumers. This choice provides reduced-risk alternatives to combustible cigarettes as well as going beyond tobacco and nicotine into new and exciting areas of product innovation.

    “We believe this collaboration has significant potential to enhance our activities, allowing us to combine our world-class expertise while enabling scientists from both BAT and Organigram to work closely together and share information real-time. We know that in R&D, this is how you make real breakthroughs and accelerate progress.

    “We have been impressed by the strong management team and culture at Organigram. This collaboration aligns with our long-term strategy and will enable us to work with Organigram at an R&D level as well as contributing to their wider operations.”

    We have been extremely selective about aligning with a strategic partner.


    “This is a tremendous milestone in the evolution of Organigram,” said Greg Engel, CEO of Organigram, in a statement. “It is instrumental in advancing our commitment to offering consumers innovative cannabis products and to furthering our long-term international strategy. We have been extremely selective about aligning with a strategic partner, and in BAT, we’ve found a leading consumer goods business with innovative product platforms, an impressive dedication to research and development, deep consumer insights, regulatory expertise and a commitment to responsible stewardship and consumer safety.”

  • 22nd Century Reports Financial Results

    22nd Century Reports Financial Results

    Photo: Firmbee from Pixabay

    22nd Century Group reported a gross profit of $1.4 million in 2020—an increase of 9,413 percent over the previous year. Gross profit for the fourth quarter improved by 161.8 percent to $588,000 compared to the prior-year period. The improvement in gross margin was primarily the result of higher volume, price increases and lower labor and overhead costs driven by factory efficiencies implemented in 2020.

    For the fourth quarter of 2020, operating loss was unfavorable by $696,000 compared to the prior year period. This was primarily driven by an increase in selling, general and administrative expense and was partially offset by higher gross profit and lower research and development spend related to the company’s modified-risk tobacco product (MRTP) application in 2019.

    For full-year 2020, operating loss improved by $4.4 million to $19.2 million compared to the prior year, driven by the combination of higher gross profit and lower total operating expenses. The decrease in operating expenses was primarily driven by a decrease in research and development expenses related to the MRTP application in 2019, a reduction in personnel expense and an intellectual property portfolio rationalization that resulted in higher impairment in the prior year.

    The company reported net sales revenue of $7.3 million in the fourth quarter of 2020, up 0.6 from the comparable 2019 quarter. For full-year 2020, net sales revenue increased 8.8 percent to $28.1 million compared to the prior year. The increase for both periods was primarily driven by higher volume and increased pricing in the company’s contract manufacturing business.

    We look forward to monetizing a portion of our hemp/cannabis IP this year.


    “As we look to 2021, we see tremendous commercial opportunity for our tobacco and hemp/cannabis franchises,” said James A. Mish, CEO of 22nd Century Group, in a statement. “Our focus remains on our primary mission: to reduce the harm caused by smoking. Once we secure MRTP designation, we will capitalize on our VLN brand and begin to build our tobacco franchise through licensing and partnership opportunities in the U.S. and internationally.

    “We have made significant progress in our hemp/cannabis research and look forward to monetizing a portion of our hemp/cannabis IP this year. With the majority of our hemp/cannabis operational partnerships now in place, we believe we will be able to commercialize our new disruptive, commercially valuable hemp/cannabis plants in development in two years.”

  • STG Pleased With 2020 Financial Performance

    STG Pleased With 2020 Financial Performance

    Photo: STG

    Scandinavian Tobacco Group (STG) delivered net sales of DKK8.01 billion ($1.28 billion) and EBITDA before special items of DKK1.83 billion in fiscal year 2020. This corresponds to 6.6 percent organic growth in net sales and 14 percent organic growth in EBITDA. Net profit decreased to DKK678 million from DKK748 million.

    While the Covid-19 pandemic created significant challenges across the entire value chain, STG benefitted from its strong online presence combined with increased consumption of handmade cigars in the U.S. The integration of Agio Cigars delivered the expected synergies and the company’s Fueling the Growth program was completed one year ahead of time.

    “In a challenging year, we delivered a satisfactory financial performance,” said STG CEO Niels Frederiksen, in a statement accompanying the presentation of the company’s annual report.

    “We saw solid operational performance across all three divisions, and we continued to deliver on all major efficiency initiatives ahead of time, but we also benefitted from an increased demand for handmade cigars in the U.S. A genuine team effort.”

    In a challenging year, we delivered a satisfactory financial performance.

    The board of directors proposes an ordinary dividend of DKK6.50 per share for 2020, an increase of 6.6 percent compared to the ordinary dividend for 2019. This will be supplemented by a share buyback program of up to DKK600 million in 2021.

    STG expects to generate organic EBITDA growth of more than 7 percent for the full year 2021.