Category: News This Week

  • Investing in CBD

    Investing in CBD

    22nd Century Group plans to invest $24 million in Panacea Life Sciences, a vertically integrated consumer-facing company operating in the legal hemp-derived CBD product space.

    As part of the deal, 22nd Century has received a warrant to purchase preferred stock of Panacea Life Sciences, which upon full exercise will provide 22nd Century with a controlling equity position in Panacea Life Sciences.

    “After a disciplined and thorough review of the opportunities available to 22nd Century to maximize shareholder value creation, we are pleased to announce the company’s first investment in the legal hemp/cannabis consumer packaged goods space,” said Cliff Fleet, president and chief executive officer of 22nd Century Group.

    “This investment is a major milestone in 22nd Century’s ongoing execution of our hemp/cannabis strategic growth plan and offers the opportunity for strong projected shareholder returns.”

    “We are pleased to enter into this long-term strategic partnership with 22nd Century,” said Leslie Buttorff, chief executive officer of Panacea Life Sciences.

    “With a strong team and seed-to-sale operations in place, Panacea is on track to deliver sales growth of over 1,000 percent in 2019 with gross margins over 50 percent. Our success has been possible because of our focus from day one on producing and marketing the highest quality hemp-derived premium CBD products.”

  • Ban Approved

    Ban Approved

    India’s upper house of Parliament, the Rajya Sabha, on Dec. 2 approved a bill to prohibit the production, trade, transport, storage and advertisement of electronic cigarettes in the country, reports India Today.

    The new law, which passed Parliament’s lower house earlier this month, replaces an ordinance issued by the government in September.

    First-time violators face fines of up to INR100,000 ($1,393) and imprisonment of up to one year. Subsequent offenses are punishable with fines up to INR500,000 and imprisonment of up to three years.

    During the debate on the bill, some lawmakers expressed concern that the government had brought the legislation under pressure from the tobacco industry and demanded the ban be extended to raw tobacco and conventional cigarettes.

    “We have done it with very pious intention. There is no vested interest,” Health Minister Harsh Vardhan told the Rajya Sabha.

  • Restricting Sales

    Restricting Sales

    Hungary’s Parliament on Dec. 3 approved legislation limiting the sale of vapor products to the state-run network of tobacco shops.

    The legislation also reduces the excise tax on e-cigarette liquid from HUF55 ($0.18) to HUF20 per mL, closer to levels in neighboring countries to reduce illegal imports.

    In addition, it introduces an excise tax of HUF19,160 per kg on smokeless tobacco products and “smoking substitutes containing nicotine” next year.

    The law will reduce the number of tobacco shops in the country by raising the population threshold per shop from 3,000 to 4,000.

  • Losing Interest

    Losing Interest

    The number of farmers who have registered to cultivate tobacco in Zimbabwe is 15 percent lower than it was this time last year.

    Statistics from the Tobacco Industry and Marketing Board show that as of Nov. 30, 140,257 farmers had registered to grow the crop, down from 165,130 last year, while hectarage under tobacco crop dropped to 35,998 hectares from 42,000 hectares.

    Industry representatives attribute the decline to currency reforms and poor prices in the past selling season.

    “Truth be told, farmers have lost interest in tobacco farming,” said the Zimbabwe Commercial Farmers Union president, Shadreck Makombe. “They felt cheated from last season. The cost of labor input was not commensurate with their earnings.”

    In the past season, the average price of the golden leaf was $2 per kg, down from $2.92 the previous season.

  • Brazil OKs Medical Pot

    Brazil OKs Medical Pot

    Brazilian pharmaceutical regulator Anvisa on Dec. 3 approved regulations for medicinal cannabis-based products but blocked a proposal to allow domestic medical marijuana growing, reports Reuters.

    An Anvisa spokesman said that Brazilian firms interested in manufacturing cannabis-based products would need to import inputs from abroad.

    Anvisa also set out specific rules for the manufacture, import, sale, packaging, marketing and regulation of cannabis-based products.

    The new rules will be published in the country’s official gazette in the next few days and come into law 90 days after that.

    Brazil’s decision to allow cannabis-based products is part of a slowly changing worldwide view toward illegal drugs.

    Uruguay legalized the growing, sale and smoking of marijuana in December 2013.

    Colombia has also legalized medical marijuana while in Mexico, the supreme court ordered the country’s health ministry to speed up its issuance of medical marijuana regulations with recreational cannabis also being discussed by lawmakers.

  • Ban Considered

    Ban Considered

    Bangladesh plans to prohibit the sale and use of vapor products in response to a global health scare, reports Reuters.

    “We are actively working to impose a ban on the production, import and sale of e-cigarettes and all vaping tobaccos to prevent health risks,” said Shaikh Yusuf Harun, secretary at the health education and family welfare division of the Ministry of Health and Family Welfare.

    The health ministry had taken into consideration the recent spate of deaths and illnesses linked to e-cigarette use in the United States, he said.

    As of Nov. 20, the U.S. Centers for Disease Control and Prevention had registered 2,290 cases of lung injuries and 49 deaths related to vaping. Public health officials have fingered black market THC products as the most likely culprit.

    India, the world’s second-largest tobacco market, banned the sale of e-cigarettes in October as it warned of a vaping “epidemic” among young people.

    The global market for e-cigarettes was worth $15.7 billion in 2018, according to Euromonitor International, and is projected to more than double to $40 billion in 2023.

  • Push Against Flavors

    Push Against Flavors

    The Philippines’ Department of Finance is pushing for a ban on flavored vapor products to discourage youth from vaping, reports The Inquirer.

    “Our original position has always been to make sure that the flavors appealing to the youth are not allowed,” said Finance Undersecretary Karl Kendrick Chua.

    President Rodrigo Duterte has reportedly said he wants e-cigarettes to taste only like tobacco.

    Assistant Finance Secretary Tony Lambino said higher vapor product taxes would add about PHP2 billion ($39.2 million) in revenues if implemented next year.

    For its part, the Bureau of Internal Revenue is already preparing new tax stamps in anticipation of increases in cigarette and alcohol taxes.

    These taxes are expected to generate PHP47 billion in revenues during the first year of implementation.

  • ‘Premium’ Customers

    ‘Premium’ Customers

    Global reinsurers are pressuring underwriters to charge certain vapers higher rates than smokers or exclude them altogether, according to Reuters.

    Most insurers have long treated smokers and vapers the same, meaning they can pay close to double the premiums of nonsmokers or nonvapers. But three major reinsurers have provided updated advice on vaping in the past three months with new warnings while others are considering their approach.

    The new warnings focus on young vapers and the vaping of liquids containing the marijuana ingredient THC, which is legal and prevalent in some U.S. states and has been linked to lung illnesses in the country.

    The shift in the reinsurance and insurance sector represents a further blow to the vapor industry, which markets its products as healthier alternatives to smoking.

    One life insurer likely to resist the pressure is Reviti, a new insurer owned by Philip Morris International (also see, “Rewarding Change,” Tobacco Reporter, June 2019). It is offering a discount of up to 15 percent for vapers in Britain. Customers who quit tobacco and nicotine altogether get a discount of up to 50 percent.

  • Feeling the Chill

    Feeling the Chill

    The e-cigarette industry in Shenzhen, China—the world’s vapor hardware manufacturing capital—is suffering in the wake of a vaping-related illness that has sickened more than 2,000 people and killed at least 47 in the U.S., according to an article in The Guardian.

    Even though health authorities have blamed the health problems mostly on THC products obtained from illicit sources, a global crackdown on vapor products has taken a toll on legitimate businesses.

    On Nov. 7, Chinese authorities ordered online platforms to discontinue sales of e-cigarettes, citing health concerns. Leading platforms such as Taobao or JD.com duly complied, causing the category to virtually disappear overnight.

    China is the world’s biggest manufacturer and exporter of e-cigarettes, according to the China Electronic Cigarette Chamber of Commerce. In 2018, more than 2 million people worked in the industry, with annual sales worth RMB33.7 billion ($4.79 billion) and exports worth RMB28.7 billion.

    Shenzhen manufactures about 90 percent of the world’s vapor devices and is home to about 1,000 factories. Thousands more companies form the supply chain throughout Guangdong province and China.

    Bigger players have fared better than the smaller sellers, and life for them goes on as normal for now, according to The Guardian.

    Some speculate that China Tobacco, the state-run monopoly that manages the country’s tobacco industry, is trying to stub out the vapor segment because its growth is coming at the expense of tobacco products.
     

  • Name Disputed

    Name Disputed

    Vitabon Co. is suing British American Tobacco (BAT) for trademark infringement in South Korea.

    Vitabon claims that the name of BAT’s Glo Sens hybrid e-cigarette too closely resembles that of its nicotine-free aromatherapy device, Sense.

    Vitabon is demanding KRW110 million ($93,000) in compensation and an end to the manufacture and sales of Glo Sens in South Korea.

    “Despite the fact that Vitabon Sense is a product designed to help customers quit smoking and Glo Sens is an e-cigarette product, the methods of use are very similar and their customer bases very close,” a Vitabon official said, adding that Vitabon Sense was released prior to Glo Sens.

    BAT plans to file a countersuit against Vitabon, denying the claim that the names confuse consumers.