Category: Featured

Vapor Rebounds From Post-EVALI Declines

After declining in 2019 and 2020, vapor industry sales grew 10-15 percent in 2021 to date, according to Management Science Associates (MSA). Speaking during TMA’s “From Change to Change” webinar on Nov. 17, MSA Vice President Don Burke, said that he expects the industry to continue its growth into 2022.

“Vapor cartridges were up by 18.5 percent. Over … 2019 going into 2020, we were seeing some declines in vapor. One of the things to keep in mind is at the end of 2019 was that illegal THC vaping [EVALI] crisis,” said Burke. “That turned a lot of people off of vapor, even though it was only an illegal product that caused the issues. No legitimate product caused any problems. It’s about a year-and-a-half now since that occurred … because of that, consumers are starting to forget, vapor is coming back.”

Burke said disposables, because they’re allowed to have flavors, were up 28.9 percent and all-in-one kit volumes are growing (up 2.9 percent). He said vape shop and tobacco outlet sales are also on the rise after many closed or limited hours due to the Covid pandemic. MSA’s research includes approximately 300,000 stores. It does not include vape shop sales.

“We’re looking at distributor to shipment retail data. In many cases, that’s important because a lot of the convenience stores and some tobacco outlets do not collect their data and, therefore it’s very difficult to get a clean read,” he said. “The convenience channel—because they were considered essential businesses in most parts of the U.S.—managed to survive the pandemic and in fact, now are a larger percentage of stores. Also, 71 percent of tobacco volume goes through convenience stores.”

Closed-pod systems (cartridges) were up 6 percent in the most recent quarter. Burke said that during the third quarter of 2021 disposables continued to have strong sales, rising by 21 percent. E-liquid distribution fell by 49.6 percent through 2020 and into current 2021 and sales fell nearly 15 percent, mostly due to recent regulatory action in the U.S.

Burke also said cannabis sales grew significantly during 2020 and into 2021.–Timothy Donahue

U.S. Nicotine Share – Servings (percentage)
	Third quarter 2020	Third quarter 2021	Share Change
Cigarettes	78.9	77.4	-1.5
Moist	7.3	7.2	-0.1
Vapor	5.1	6.3	+1.2
Large Cigars	2.9	3.2	+0.3
Papers/Tubes/Wraps	3.4	3.0	-0.4
Modern Oral	0.7	1.4	+0.7
Little/Filtered Cigars	1.1	1.0	-0.1
Snus	0.3	0.3	No Change
Pipe Tobacco	0.3	0.2	-0.1
Roll Your Own	0.02	0.02	No Change

Source: MSA

November 21, 2021

‘Good COP, Bad COP’ Awards Announced
Tobacco harm reduction (THR) advocates have handed out “Good COP, Bad COP” awards following the ninth Conference of the Parties (COP9) to the World Health Organization Framework Convention on Tobacco Control (FCTC) from Nov. 8-12.
Banned from participating in the gathering the THR advocates organized a global livestream that ran simultaneously to the COP9.
Dubbed sCOPe, the round-the-clock YouTube simulcast attracted significant attention, adding to increasing international pressure on the WHO to embrace safer nicotine products, not demonize them.
Nancy Loucas of the Coalition of Asia Pacific Tobacco Harm Reduction Advocates says sCOPe gave a voice to leading consumer advocates who were shut out of COP9. The focus, however, must now move to preparing for COP10 in 2023 where harm reduction products will be a key discussion for delegates.
“Those of us passionate about safer nicotine products must reach out to the likes of public health officials and influencers. We need to humanize this debate and show how vaping has saved the lives of millions of ex-smokers,” said Loucas.
sCOPe’s Good COP awards:
The “Wow, Someone’s Actually Telling Us What’s Going On” Award went to COPWATCH for getting on the inside and giving the world real-time insights online.
The “Give the Man a Cigar” Award went to Philippine Foreign Affairs Secretary, Teodoro Locsin Jr, for standing up to COP9 delegates by promoting the use of science in tobacco control.
The “I am the Evidence” Award went to passionate U.S. consumer advocate and sCOPe panellist, Liana Hudspeth.
sCOPe’s Bad COP awards:
The “You Shouldn’t Really Say That About Yourself” Award goes to FCTC Head Adriana Blanco Marquizo for her “How industry weaponizes science” Tweet, which the THR advocates described as “very bizarre.”
The “Our Proposal Won’t Do A Thing But Delegates Loved It” Award went to Iran, whose government holds a sizable stake in its domestic tobacco industry.
The “Where the Hell Is Wally” Award went to WHO sponsor, anti-vape crusader, and American billionaire Michael Bloomberg for trading in COP9 and instead flying to the COP26 Climate Conference in Glasgow.
November 21, 2021
U.S. Pictorial Health Warnings Postponed Again

Image: FDA
The new effective date for the FDA’s final rule on health warnings is Jan. 9, 2023, after the U.S. District Court for the Eastern District of Texas ruled to extend the date in R.J. Reynolds Tobacco Co. et al. v. United States Food and Drug Administration et al.
Deadlines tied to the effective date have also shifted. For instance, while the FDA strongly encourages entities to submit cigarette plans as soon as possible, the deadline for submission is now March 12, 2022.
The Family Smoking Prevention and Tobacco Control Act (TCA) of 2009 directed the FDA to issue regulations requiring color graphics depicting the negative health consequences of smoking to accompany new textual warning statements.
In March 2020, the FDA finalized the “Required Warnings for Cigarette Packages and Advertisements” rule, establishing 11 new cigarette health warnings consisting of textual warning statements accompanied by color graphics, in the form of photorealistic images, depicting the negative health consequences of cigarette smoking.
The new graphic warnings, which depict some of the lesser known health risks of smoking, such as diabetes, must cover at least the top 50 percent of the front and rear panels of packages as well as at least 20 percent of the top of advertisements.
In April and May 2020, cigarette manufacturers and retailers sued the FDA, arguing that the graphic warning requirements amount to governmental anti-smoking advocacy because the government has never forced makers of a legal product to use their own advertising to spread an emotionally charged message urging adults not to use their products.
In a more recent challenge, tobacco companies argued that the deadline was too onerous due to the impact of the Covid-19 pandemic. They also pointed to the risk that they would lose their investments in new packaging if the graphic health warning requirement were ultimately thrown out in court.
The industry won several postponements of the new health warnings’ effective date in court.
This is the FDA’s second attempt to enact graphic health warnings under the TCA. The first rule was struck down by the federal court in the District of Columbia as a violation of the First Amendment.
November 19, 2021
Nicotine Tax Inches Closer as U.S. House Passes Legislation

Critics call the proposal ‘a public health disaster.’
The U.S. House of Representatives has passed the portion of the Build Back Better Act that includes a controversial nicotine tax. The legislation will now head for the Senate, where it faces an uphill battle.
In a 220 to 213 vote, the House voted mostly along party lines for the legislation that has often been compared to the New Deal. Biden signed the second piece of his domestic agenda, a $1.2 trillion package focused on infrastructure improvements, into law earlier this week.
To help fund the plans, the legislation calls for a tax of $50.33 per 1,810 mg of nicotine for “any nicotine product that has been extracted, concentrated or synthesized.”
Critics warned that raising taxes on smoking alternatives while leaving taxes the same on traditional cigarettes risks driving vapers back to smoking.
“The science is crystal clear: This bill is a public health disaster,” said Tim Andrews, director of consumer issues at Americans for Tax Reform. “The tax hikes on people trying to quit smoking contained in H.R. 5376 would lead to more people, millions more Americans smoking—and dying as a result.”
Andrews’ concerns were echoed by Michael Pesko, an associate professor in the Department of Economics at Georgia State University.
“Given extensive peer-reviewed evidence indicating that these products are substitutes, an unintended but inevitable effect of increasing taxes on e-cigarettes is to increase cigarette use,” he said. “A wide array of research suggests that this boost in cigarette use as a result of large e-cigarette tax increases would significantly increase overall tobacco-related death and disease.”
November 19, 2021
Mushrooms Trained to ‘Eat’ Cigarette Butts

Photo: Rafal Olechowski
Australian scientists are training oyster mushrooms to “eat” tobacco butts, reports ABC News.
Oyster mushrooms send out long thin strands of white mycelium to explore their surroundings and gather nutrients—but eating a cigarette butt will be a new dining experience for them, according to Amanda Morgan, founder and head of research and development at Fungi Solutions.
During the trial, the mushrooms slowly recognize the cellulose acetate in the filter of the cigarette butt and begin to eat it.
At the end of the process, the mushrooms will have eaten the microplastics in the cigarette butts’ filters, leaving behind a material that can be used to create other products, such as boxes to collect cigarette butts.
“They [the mushrooms] are used to the cellulose, but we need to introduce the other elements, just like training a baby to eat,” Morgan said.
“From there, you can take the culture and grow the next one.”
According to environmental organization No More Butts, about 4.5 trillion cigarette butts are littered worldwide every year.
Morgan aims to set up a remediation facility in Wollongong where butts can be transported to, treated and turned into usable materials.
The trial is expected to take up to two years.
November 19, 2021
22nd Century Announces New CFO
Richard Fitzgerald
Richard Fitzgerald has joined 22nd Century Group as chief financial officer.
John Franzino, the company’s previous chief financial officer, has transitioned to the position of chief administrative officer, where he will be responsible for developing the company’s business processes and leading the company’s financial planning and analysis, operational finance, human resources and information technology functions.
“This is a pivotal time for 22nd Century as we build out our leadership team, particularly with the pending MRTP [modified-risk tobacco product] authorization and international launch of our VLN product,” said James A. Mish, chief executive officer at 22nd Century Group, in a statement.
“We are excited to welcome Rich to the team, expanding our financial and strategic capabilities as we work to rapidly scale the business across all three of our plant franchises. Rich brings a diverse background, including extensive experience in IP [intellectual property] and technology licensing in the life science industry, which we believe is timely as we execute on our key launch programs in tobacco, hemp/cannabis and hops.”
“John has been an important part of 22nd Century’s transformation since joining the company. He has helped the company [to] advance our primary mission in tobacco harm reduction and to take leadership positions in two new plant franchises, enabling us to expand our revenue base, diversify into international markets and build our balance sheet to its strongest level in company history.
“In his role as chief administrative officer, John will focus on further developing our corporate and operational capabilities to support our growth as we bring VLN to market, begin to monetize our hemp/cannabis portfolio and expand our global operations across all three franchises,” said Mish.
“I am excited to join 22nd Century as the company readies for a significant change in its revenue model through the launch of its disruptive VLN product and monetization of its highly differentiated hemp/cannabis portfolio through both IP and plant line revenues,” said Fitzgerald. “22nd Century has positioned itself as a critical industry partner across all three of its franchises, and I look forward to building on this foundation as we continue to scale the company.”
November 19, 2021
Synthetic Nicotine May be Subject to Regulation

Photo: Tobacco Reporter archive
Synthetic nicotine could be considered a component of e-cigarettes, which would allow for the product to be regulated by the U.S. Food and Drug Administration. Mitch Zeller, director of the FDA’s Center for Tobacco Products, said the agency was concerned about the use of synthetic nicotine to avoid regulation and enforcement and is considering its options in dealing with its use.
On Nov. 17, the first day of TMA’s “From Chance to Change” webinar, Zeller said that the Tobacco Control Act defines tobacco products as anything that is made or derived from tobacco and is intended for consumption. The FDA believes that it also includes components and parts (such as coils and batteries) and all the ingredients included in producing e-liquids (such as flavorings and vegetable glycerin) even if the product does not contain nicotine.
“That’s an assessment that we need to make on a case-by-case basis based upon the totality of all the information that we have,” said Zeller.
According to Zeller, synthetic nicotine represents a challenge for the agency because it is increasingly difficult to differentiate from naturally derived nicotine. “Historically, that hasn’t been a problem,” he said. “It’s not a problem now, but it could become a challenge for us going forward.”
Zeller explained that nicotine is comprised of two isomers: R and S. Tobacco-derived nicotine is 99 percent S, and early synthetic nicotine had a 50-50 split between R isomers and S isomers. However, newer versions of synthetic nicotine have much higher proportions of S isomers (as high as 99.9 percent pure), making it harder to tell synthetic nicotine apart from natural nicotine. Tobacco-derived nicotine is also becoming higher in quality.
“Tobacco-derived nicotine is now being made available at a higher quality … pharmaceutical grade from a purity standpoint. And with that, it may be harder for us to see that chemical fingerprint, if you will, whether it’s tobacco DNA or tobacco-specific nitrosamines,” he said. “We could see this as a problem going forward. Coupled with the clear intent of certain companies to do this to evade FDA regulation … We are concerned about what this means for product regulation, for the public health, and a product like Puff Bar proudly proclaiming its use of synthetic nicotine [and] being the No. 1 brand used by youth.”
In the short term, Zeller said the FDA is talking internally about how to best address the growing number of products that are using synthetic nicotine to skirt FDA regulation. He said the agency is also responding to questions from Congress about synthetic nicotine and providing technical assistance to members when asked.
“There are a lot of companies out there that pride themselves on playing by the rules. They have every right to expect that the playing field is going to be level. That’s where we come in with our compliance and enforcement authorities,” Zeller said. “We agree that one of the most important things that we can do, using our compliance and enforcement tools, is to level the playing field and to have our actions [in the e-cigarette space], hopefully, serve as a deterrent. There’s nothing that I can say from a compliance enforcement standpoint on synthetic nicotine other than we have ongoing investigations.”
November 18, 2021
Brazilian Crop Volume Down Nearly 10 Percent

Photo: Souza Cruz
The Brazilian states of Rio Grande do Sul, Santa Catarina and Parana produced 569.54 million kg of tobacco in 2021–2022, 9.38 percent less than during the previous growing season, according to an announcement from the tobacco growers’ association Afubra relayed by Kohltrade.
The planted area shrunk by 9.78 percent to 243,590 hectares (ha) in this year. Afubra expects yields to average 2,310 kg per ha compared with 2,299 kg per ha in the previous growing season.
The volume reduction was expected, according to Afubra President Benicio Albano Werner. “We had already estimated that there would be a reduction of 8 [percent] to 10 percent, on average, in southern Brazil,” he said. “This is not negative; on the contrary, it is necessary since, for several harvests, Afubra and the entities representing tobacco growers warn of the need to adapt our product offer to market demand.”
Werner said the decline was due also to growers’ frustration with the commercialization of last year’s harvest and competition for alternative crops. More tobacco farmers, he noted, have been diversifying their operations in recent years.
November 18, 2021
STG Takes Stake in Cigar Manufacturer

Photo: STG
Scandinavian Tobacco Group (STG) has acquired a majority stake in Moderno Opificio del Sigaro Italiano (MOSI), a cigar company with approximately 40 employees and production facilities in Orsago, Italy.
MOSI was founded in 2013 by Cesare Pietrella. The company produces high-quality traditional Italian machine-rolled cigars with a blend of Italian and American Kentucky tobaccos grown on plantations in Northern Italy and in the United States. With a small exclusive offering under the brand Ambasciator Italico, MOSI has gained a market share of approximately 9 percent in Italy for traditional machine-rolled cigars.
“We are excited about this acquisition,” said Jurjan Klep, senior vice president of the Europe branded division in STG, in a statement. “With a majority stake in MOSI, we are acquiring modern cigar-making craftsmanship and a premium brand that will increase our offering to our consumers and the opportunity to take further market share in an important market. This is our fifth acquisition since 2016, and I look forward to further cementing our proven track record of creating value from acquisitions of brands and businesses.”
“Together with Scandinavian Tobacco Group, MOSI and Ambasciator Italico are well positioned for growth, and the acquisition will invigorate the Italian cigar market and benefit Italian cigars smokers, customers and tobacco farmers,” said Cesare Pietrella, founder and president of MOSI.
In related news, STG has restructured its Canadian division, integrating it into its U.S. operations, according to a report by Halfwheel.
Gene Richter, vice president of sales for STG North America, will oversee the Canadian sales team as well as General Cigar Co., Forged Cigar Co. and STG Lane. Cole Patton, with a new role as national sales manager for North American mass market strategic accounts, will oversee the U.S. and Canadian mass market businesses. Mike Restivo, national sales manager of regional accounts for STG Lane, and Jennifer Goodwin, national sales manager for south/west STG Lane, will report to Patton. Marc Rheaume, vice president of sales for STG Canada, left the company.
“We brought these two business units together to deliver untapped growth opportunities,” said Regis Broersma, president and senior vice president of STG’s North America branded and rest of the world division. “Under the new structure, we will work together to capture increased market share while demonstrating an ongoing commitment to building both our Canadian and U.S. businesses.”
November 18, 2021
Essentra Launches ECO Active Filter

Image: Essentra Filters
Essentra Filters has launched ECO Active Filter, the latest product in its proprietary range of sustainable filters. Developed as an alternative to active carbon acetate filters, ECO Active is plastic-free and 100 percent biodegradable.
“Our commitment toward achieving a sustainable future has never wavered,” said Global Marketing Manager Seng Keong Low. “ECO Active is the latest offering in our ECO range of products, and we continue to innovate new, high-quality, eco-friendly products to address the sustainability requirements of regulators, customers and end consumers.”
The ECO Active Filter is customizable for length, circumference, pressure drop, carbon types or carbon sizes and can be combined with other filter segments to suit customer requirements.
November 18, 2021