Category: Featured

  • CAA Expands State Team

    CAA Expands State Team

    Cigar Association of America logo
    Photo courtesy of the CAA

    The Cigar Association of America (CAA) has expanded its team by having Mudi Kpohraror join as the new state government relations director, according to the CAA. Kpohraror will report to Vice President Chris Newbry.

    David Ozgo, the CAA’s president, said “Mudi will continue to enable and advance how we advocate on behalf of our member companies to ensure that they have an active voice at the state level. Chris Newbry does an amazing job working with and directing our more than 40 state government affairs consultants across the country. With Mudi, we will add to our capabilities. We couldn’t be more thrilled he’s joined the team.”

    Kpohraror brings experience working in state legislatures across the country, including time working at Twitter, the office of U.S. Senator John Hoeven and the North Dakota Republican Party. He also brings a wealth of knowledge and experience from his time of service in the North Dakota National Guard.

    “I am humbled and excited to be a part of such a great team and reputable organization. I look forward to working closely with the team and its member companies to represent the entire cigar industry while learning from those already actively working in the industry,” Kpohraror said.

    Kpohraror is set to assume his role on May 23.

  • New South Wales Sets High Fines for Youth Sales

    New South Wales Sets High Fines for Youth Sales

    Australian bills and coins
    Photo: Atstock Productions | Adobe Stock

    More than $1 million worth of illegal e-cigarettes and liquids containing nicotine have been seized in New South Wales (NSW), Australia, this year.

    NSW Health has seized more than $3 million of the banned products since July 2020.

    Since October 2021, products containing nicotine are only available for people over the age of 18 when prescribed by a medical practitioner for smoking cessation purposes, from an Australian pharmacy or via importation into Australia with a valid prescription, according to 7News.

    For all other retailers in NSW, the sale of e-cigarettes or e-liquids containing nicotine is illegal.

    The curb on illegal nicotine sales extends to online shops with the maximum penalty of $1,650 per offense, six months in prison or both.

    Selling to minors also comes with hefty fines. For individuals, up to $11,000 for a first offense and up to $55,000 for a second or subsequent offense; and for corporations, up to $55,000 for a first offense and up to $110,000 for a second or subsequent offense.

    Chief Health Officer Kerry Chant said retailers were being put on notice if they were selling the contraband products. “We are cracking down on the illegal sale of nicotine e-cigarettes and liquids and taking a zero-tolerance approach to those who sell them,” she said.

    “NSW Health regularly conducts raids on retailers across the state to protect young people from these harmful devices. You will be caught, illegal items will be seized, and you could face prosecution, resulting in being fined or even jailed.

    “The harmful impacts of vaping on young people cannot be underestimated. People think they are simply flavored water, but in reality, in many cases, they are ingesting poisonous chemicals that can cause life-threatening injuries.”

    The Alcohol and Drug Foundation says around 14 percent of 12-year-olds to 17-year-olds nationwide have tried an e-cigarette, with around 32 percent of these students having used one in the past month. Around 12 percent of students reported buying an e-cigarette themselves.

  • FDA Hands Court PMTA Status Report

    FDA Hands Court PMTA Status Report

    Photo: Tobacco Reporter Archive

    The U.S. Food and Drug Administration has submitted a status report for products that currently have a premarket tobacco product application (PMTA) under review. The regulatory agency states that it expects to have resolved 63 percent of the applications set out in its original priority by June 30, 2022, and 72 percent of the applications in its original priority set by the end of this year.

    “The FDA’s progress largely reflects the review priorities that the agency established in 2020, when review began. Given the large influx of concurrent applications, the FDA prioritized review of applications from manufacturers with the greatest market share at the time because decisions on those applications were expected to have the greatest impact on public health,” the report states. “As a result, the FDA allocated significant resources to review applications from the five companies whose brands represented over 95 percent of the e-cigarette market at that time: Fontem (blu), Juul, LogicNjoy and R.J. Reynolds (Vuse).”

    In the order requiring the FDA to submit status reports, the Maryland court stated that covered applications are limited to applications for products that are sold under the brand names Juul, Vuse, Njoy, Logic, blu, SMOK, Suorin or Puff Bar. Additionally, any product with a reach of 2 percent or more of total “Retail Dollar Sales” in Nielsen’s Total E-Cig Market & Players or Disposable E-Cig Market & Players reports.

    To determine which applications are for products sold under the listed brand names, the FDA used its internal PMTA database, which organizes applications by manufacturer, according to the agency. The FDA searched its database for the brand names to identify the manufacturers related to each relevant brand name and then searched its database to identify applications submitted by the manufacturers.

    The FDA stated that it had conferred with the plaintiffs in the case who agreed that only one brand beyond those listed meets the 2 percent threshold. That brand was not identified. Of those applications the FDA deems requiring status reports, the agency stated that it had identified 240 covered applications. The agency estimates that, based on current information, the FDA will take action on:

    • 51 percent of covered applications by June 30, 2022;
    • 52 percent of covered applications by Sept. 30, 2022;
    • 56 percent of covered applications by Dec. 31, 2022;
    • 56 percent of covered applications by March 31, 2023; and
    • 100 percent of covered applications by June 30, 2023.

    The agency also states that not every covered application has an equal potential impact on the public health. For example, more than 25 percent of the covered applications are for products not currently on the market.

    The FDA identified two applications for products sold under the relevant brand names where the applicant stated that the products were not on the market as of Aug. 8, 2016. The FDA also identified three other applications for products sold under the relevant brand names where the applicant did not state whether the products were on the market as of Aug. 8, 2016. The FDA has not included information about these five applications in the current status report.

    “Also, some e-cigarette devices consist of a small number of components, resulting in a small number of individual product applications for the entire system. A disposable prefilled device, for example, could constitute a single product with one application. Other e- cigarette devices, by contrast, consist of many components with separate tanks, coils, tubes and pods, resulting in dozens of separate product applications for a single system,” the status report states. “Of the covered applications that the FDA anticipates will remain to be resolved beyond the end of 2022, more than half are for components of a limited number of e-cigarette device systems representing under 2.5 percent of the e-cigarette market. The FDA has made and will continue to make significant progress in reviewing and resolving applications for e-cigarette products to achieve the greatest impact on public health.”

    The agency stated that it will file another status report by July 29, 2022, that will include any revisions to the estimates disclosed in the first report.

  • Altria Buys Poda’s Assets and Properties

    Altria Buys Poda’s Assets and Properties

    Photo: Poda Holdings

    Altria Client Services will pay $100.5 million for assets and properties used in Poda Holdings’ business of developing, manufacturing and marketing multisubstrate heated capsule technology, according to a Poda press release. The deal includes the owners’ associated patents and the company’s license of certain of those patents pursuant to an amended and restated royalties agreement dated April 12, 2019.

    “This agreement represents a significant milestone for Poda and its employees,” said Ryan Selby, Poda’s CEO, director and chairman of the company’s board of directors. “Our teams have worked diligently on this technology since the company’s inception, and we believe these agreements maximize its value for the company and its shareholders.”

    Poda’s multisubstrate heated capsule technology uses proprietary biodegradable single-use capsules. The design of the technology prevents cross-contamination between the heating devices and the capsules, which eliminates cleaning requirements and provides users with a convenient and enjoyable experience, according to Poda Holdings.

    This agreement represents a significant milestone for Poda and its employees.

    Poda’s technology is fully patented in Canada and is patent pending in over 60 additional countries, covering almost 70 percent of the global population.

    Tobacco Reporter profiled Poda Holdings in January 2022 (see “Making its Mark”).

    Altria Client Services’ parent company, Altria Group, currently holds a license to distribute Philip Morris International’s IQOS HnB product in the United States. That product, however, has been subject to an import ban in the wake of an intellectual property dispute with BAT.

    Analysts have also speculated on the likelihood of the IQOS distribution deal being renewed when it expires in 2024. PMI and Altria currently disagree about whether Altria has thus far met the milestones to earn the renewal option for an additional five-year deal.

  • WHO Accuses Industry of ‘Greenwashing’

    WHO Accuses Industry of ‘Greenwashing’

    Photo: nito

    The World Health Organization is urging governments worldwide to ban tobacco industry “greenwashing”—the touting of sustainability credentials as a way to distract from the health and environmental impacts of smoking.

    In a new report, the health groups detail efforts by the tobacco industry to improve its image.

    “This kind of activity gives the impression that the tobacco industry is socially and environmentally responsible,” the report’s authors warn. “Yet this industry is causing an incalculable toll on health to smokers, non-smokers and farmers. And not only is tobacco harming humans, it is also damaging the environment.”

    Tobacco companies frequently tout their environmental credentials, and their efforts have been recognized by independent organizations. Most multinationals feature prominently on CDP’s prestigious A list, for example. CDP is a not-for-profit charity that runs a global disclosure system for investors, companies, cities and regions to manage their environmental impacts. Its process is acknowledged as the gold standard of corporate environmental transparency.

    Tobacco companies also rank highly on the Dow Jones Sustainability Indices, a global sustainability benchmark that tracks the stock performance of the world’s leading companies in terms of economic, environmental and social criteria.

    Critics contend that ESG rankings and accreditations rarely consider a company’s end-product or service, in this case, ignoring the fact that tobacco products are harmful to human health, according to the report.

    The report says there are more than 600 different ways to assess corporate ESG activity and there are no global, standardized disclosure requirements for companies to follow, which means businesses can edit sustainability data to promote a favorable outcome.

    The authors of the greenwashing reports urge organizations to avoid partnerships with cigarette companies engaged in environmental activities that could promote the industry as an environmental partner.

    The WHO/STOP report also highlights the ecological impact of the tobacco industry. Annually, 32 million tons of tobacco leaf is grown globally to produce 6 trillion cigarettes, according to its authors. It takes about 22 billion tons of water to grow the global crop, often in places where water is limited, they argue.

    The report estimates that nearly 1.5 billion acres of global forest have been lost to tobacco farming since the 1970s. Electronic cigarettes, meanwhile, introduce plastic, nicotine salts, heavy metals, lead, mercury and lithium-ion batteries into the environment.

  • 22nd Century Acquires GVB Biopharma

    22nd Century Acquires GVB Biopharma

    Photo: cendeced

    22nd Century Group has acquired GVB Biopharma. As a contract development and manufacturing organization, GVB is believed to be one of the largest providers of hemp-derived active ingredients for the pharmaceutical and consumer goods industries worldwide based on total tonnage.

    GVB’s strengths complement 22nd Century’s existing upstream and downstream value chains, which includes expertise in cannabinoid receptor science with CannaMetrix, plant research and proprietary genetics through its KeyGene partnership, breeding expertise with Extractas, and cultivation capabilities at Needle Rock Farms.

    GVB expects 2022 revenue of approximately $48 million, a 58 percent increase year-over-year, gross margin in excess of 44 percent and positive cash flow. Upon closing, the transaction is expected to more than double 22nd Century’s revenue, be immediately accretive to adjusted EBITDA, and generate positive cash flow from the acquired assets in the near term.

    “GVB represents a transformational acquisition for 22nd Century that will enable us to rapidly grow our hemp/cannabis franchise,” said James A. Mish, chief executive officer of 22nd Century Group, in a statement.

    “GVB is one of the largest CBD suppliers globally, possessing innovative, vertically integrated cannabinoid product manufacturing technologies driving industry leading scale and cost efficiency. In addition to immediately expanding our hemp/cannabis franchise capabilities, GVB represents an opportunity to double our revenue and internalize a comprehensive contract manufacturing and extraction platform which can be used to directly and exclusively monetize our differentiated and proprietary hemp/cannabis plant genetics and intellectual property. We are enthusiastic to begin working with the highly regarded and very experienced management team at GVB.”

    “We are excited to combine with 22nd Century group, pairing our production and manufacturing capabilities together with the best hemp/cannabis plant science in the world,” said Phillip Swindells, chief executive officer at GVB. “Since 2017, we have built a loyal customer base and continue to add new, rapidly growing customers as demand in our industry accelerates. We sold more than five billion doses of CBD in 2021, and we look forward to further scaling our business as a part of 22nd Century’s comprehensive platform.”

    GVB operates three U.S. manufacturing facilities in Oregon and Nevada, including a 30,000-square-feet hemp ingredient manufacturing facility in Central Oregon, a 40,000 square-feet white-label, finished product manufacturing facility in Las Vegas, and an industrial-scale hemp extraction facility in Prineville, Oregon.

  • KT&G Posts Strong Results in First Quarter

    KT&G Posts Strong Results in First Quarter

    Photo: KT&G

    KT&G’s sales and operating profit soared by 11.5 percent and 10 percent, respectively, to reach KRW844.8 billion ($665 million) and KRW272.6 billion in the first quarter of 2022, according to a company earnings release. Performance was driven by KT&G’s flourishing overseas business, with robust sales of its heat-not-burn (HNB) tobacco products.

    “Our sales expansion of HNB products in both domestic and overseas markets, along with increasing export volume of our traditional tobacco products, led to the growth of the company’s total revenue,” a KT&G official was quoted as saying by The Korea Times.

    KT&G sold about 9.54 billion cigarettes in Korea in the first quarter of this year, 0.9 percent less than in the same period last year. However, its market share increased by 1.2 percentage points to 65.7 percent. In the HNB sector, the company’s products accounted for 45.1 percent of the domestic market.

    KT&G’s overseas volume of combustible cigarettes jumped 43.8 percent to 11.5 billion, thanks to strong sales in the Middle East and Asia Pacific regions.

  • Marketing Orders for Vuse Vibe and Vuse Ciro

    Marketing Orders for Vuse Vibe and Vuse Ciro

    The U.S. Food and Drug Administration on May 12 gave R.J. Reynolds Vapor Co. (RJRVC) permission to continue marketing the original-flavor varieties of its Vuse Vibe and Vuse Ciro products. In October 2021, the FDA authorized the marketing of Vuse Solo original flavor.

    “These authorizations represent the broadest portfolio of market authorizations provided to any company in the U.S for premarket tobacco product applications (PMTA),” said David O’Reilly, director of scientific research at RJRVC’s parent company, BAT, in a statement. “Continued focus on science and innovation has supported the robust submissions, which have enabled FDA to evaluate and authorize the marketing of these products.

    “We are proud of the work undertaken by the team to achieve this significant regulatory milestone and are confident in the quality of our applications.”

    While approving the original-flavor varieties, the FDA denied RJRVC’s applications for the marketing of Vuse-branded products with other flavors. Those flavored vapor products are not currently marketed or sold in the U.S., according to BAT. The company says it is reviewing the FDA’s decision on those applications to determine next steps.

    RJRVC’s application to market menthol-flavored Vuse products remains under FDA review and those products can remain on market pending a decision from the agency.

  • PMTA Deadline Approaching

    PMTA Deadline Approaching

    Courtesy: US FDA

    Manufacturers of nontobacco nicotine (NTN) products on the market as of April 14, 2022, that wish to continue to market their products are required to submit a premarket tobacco product application (PMTA) to the U.S. Food and Drug Administration by May 14, 2022.

    The May 14 deadline is only for applicants submitting electronically, as required by the FDA. Applicants can, however, request a waiver from the FDA to submit a PMTA in a different format. An application submitted in hard copy must be received by the FDA no later than 4 p.m. Eastern Daylight Time on Friday, May 13.

    The FDA received from the U.S. District Court of Maryland a 14-day extension to file the first PMTA status reports required by the court’s revised remedial order on April 29.

    “The extension request is supported by good cause. Compiling the information needed for the status report has required considerable time and effort, and defendants have been working with plaintiffs to resolve any ambiguities about which applications will be covered in the status report,” the motion states.

    The new law additionally provides that an NTN product with a tobacco-derived “previous version” that received a negative action on a PMTA from the FDA, such as a refuse-to-file or marketing denial order, may not continue to be marketed after May 14, 2022, without receiving a marketing granted order from the FDA.

    Such products must be removed from the market, even if a new PMTA is submitted, until the marketing granted order is received, according to the agency. Products on the market after July 13, 2022, without an FDA marketing granted order are in violation of section 910 of the Food, Drug and Cosmetic Act and may be subject to FDA enforcement.

    For products not on the market on April 14, 2022, a PMTA must be submitted to the FDA and marketing authorization must be received before the product can be sold in the United States.

  • Zimbabwe: Decline in New Tobacco Growers

    Zimbabwe: Decline in New Tobacco Growers

    Photo: Tobacco Reporter Archive

    The number of new tobacco growers in Zimbabwe for the 2021–2022 season has declined by 50 percent compared to the previous year, according to a report in The Herald.

    According to the Tobacco Industry and Marketing Board (TIMB), 756 of the new registered farmers are from the communal sector, 244 are A1 farmers, 38 are from the small-scale commercial sector and 56 are from the A2 sector.

    Meanwell Gudu, TIMB chief executive, attributed the decline in new registrations to viability issues. “The decline witnessed in terms of registration of new tobacco growers can be attributed to viability issues. The cost of production is going up and the growing demand of the U.S. dollar component in the operations,” he said. “Even farm laborers now demand payment in foreign currency. So without development funding, it becomes a challenge for new tobacco farmers to register.”

    Meanwhile, average prices for tobacco exports have marginally increased this year.

    “There [are] increased exports, which is a clear reflection of the opening up of the economy post-Covid-19 lockdowns, and there are improvements in logistics,” Gudu said.

    So far, Zimbabwe has exported tobacco worth $307.8 million this season compared to $222.2 million in the same period last year.