Category: Featured

Prospect of Vapor Regs Boosts China Tobacco

Photo: Shenzhen Smoore Technology
Chinese stocks related to the traditional tobacco business rose following suggestions that China would regulate e-cigarettes like tobacco products.
Cigarette packaging provider Letong Chemical and cigarette printing and filter maker Shaanxi Jinye Sci Tech & Education surged by the daily cap of 10 percent, according to the South China Morning Post.
By contrast, vapor companies tanked. Smoore lost HKD106 billion in market cap while RELX Technology shed $14.45 billion on the New York Stock Exchange immediately after the announcement.
On March 22, China’s Ministry of Industry and Information Technology and the State Tobacco Monopoly Administration released a proposed policy that aims to address tobacco product quality issues and false advertising. Without providing details, the agencies indicated that the changes would also apply to vapor products. The changes are currently subject to a public consultation that ends April 22.
Having taken arduous and often herculean steps to remain compliant with all government regulations, Kaival Brands and the leadership at Bidi Vapor hope that additional supervision of e-cigarette manufacturing will help raise standards for the devices worldwide.
Kaival Innovations Group
With around 300 million smokers, China is the world’s largest tobacco market and the world’s largest potential market for vapor products. iiMedia Research estimates that the Chinese e-cigarette market could reach CNY10 billion ($1.53 billion) in 2021. There were more than 170,000 vapor companies as of February 2021. The market is also expected to grow in the future year.
In 2019, Chinese authorities banned e-cigarettes from online shopping channels. The restrictions prompted e-cigarette companies to invest significantly in developing physical stores across the country. RELX Technology, for example, received 30 percent of its revenues from online sales prior to the ban. In January 2020, the company pledged to invest more than CNY500 million over the three years to open 10,000 authorized sellers in China.
Some vapor companies welcomed the prospect of greater supervision over the e-cigarette sector in China. U.S.-headquartered Kaival Innovations Group, which distributes the Bidi Stick brand, said the announcement would have no effect on its operations.
“Having taken arduous and often herculean steps to remain compliant with all government regulations, Kaival Brands and the leadership at Bidi Vapor hope that additional supervision of e-cigarette manufacturing [in China] will help raise standards for the devices worldwide,” the company wrote in a press release.
March 25, 2021
Senate Confirms Murthy as Surgeon General

Photo: forcal35 from Pixabay
Vivek H. Murthy
The U.S. Senate on March 23 confirmed Vivek H. Murthy as United States surgeon general, reports The Washington Post.
The surgeon general, also known as the “nation’s doctor,” typically serves as a prominent spokesperson on public health issues but has a limited role in policymaking. President Joe Biden wants him to be a key public voice on the Covid response to restore public trust in medicine.
The surgeon general also oversees the U.S. Public Health Service Commissioned Corps, a uniformed service of about 6,000 public health workers who have helped staff the coronavirus response and administer vaccines but struggled earlier this year to get vaccinations of their own.
Murthy first served as surgeon general during the Obama administration, working on public health issues such as the opioid crisis. He also pursued his own work combating loneliness and the stigma of mental illness. He was the nation’s first Senate-confirmed Asian American surgeon general.
His original 2013 nomination was stalled in the Senate for more than a year, in part because gun rights organizations faulted Murthy for saying gun violence was a public health problem—a stance Murthy has continued to espouse.
Murthy is an advocate of e-cigarette regulation. In 2016, he released “E-Cigarette Use Among Youth and Young Adults,” calling for action to reduce the use of vapor products among young people.
Michael Siegel, a professor at the Boston University School of Public Health, at the time described the report as scientifically dishonest.
Siegel said the report essentially lied about the single most important fact that the public needed to understand about electronic cigarettes and vaping products: that they do not contain tobacco and therefore vaping is not a form of tobacco use.
March 25, 2021
Farmers Exceed Cuban Leaf Cultivation Plan

Photo: Habanos
Farmers in Pinar del Rio, Cuba’s primary tobacco producing province, have planted 16,189 hectares of tobacco to date, exceeding the plan of 15,800 hectares of tobacco for the current growing season, reports Prensa Latina.
According to the agricultural specialist of the Tabacuba group in Pinar del Rio, Virginio Morales, the farmers have fulfilled 85 percent of the harvest plan to date.
Some 3,400 workers are engaged in the processing of the leaf, which has reached 2,445 tons. Since the end of December, more than a thousand workers have joined this work.
Most of the tobacco leaf harvested in the area is used to make premium handmade cigars for export, a luxury product demanded in most international markets.
March 24, 2021
Innokin Launches ‘AC’ Vaporizer

Photo: Innokin
Innokin has teamed up with Fourier Technology to develop the Sensis, the first vaporizer with fourth-generation vape technology.
Whereas earlier generations of vaporizers used direct current to power coils in a single direction, fourth-generation vape technology uses alternating current mode (ACM) to send electricity through the coil in both directions.
“Our goal in developing alternating current mode is to provide vapers with an even better experience and the vaping industry new ways to grow and improve,” said Meredith Zhao, chief technology officer at Fourier Technology, in an Innokin press note. “We are looking forward to working with experienced users to discover the full potential of this exciting new vape technology in the hope of working together to create a smoke-free future.”
According to Fourier, ACM introduces waveform frequency control to vaping. Vapers can now adjust the hertz frequency waveforms as well as the wattage output. This upgraded output provides many advantages over the previous generation’s single direction current.
By selecting different types of waveforms and adjusting the frequency, the full spectrum of flavors can be produced from liquids and specific flavors can be enhanced.
Our goal in developing alternating current mode is to provide vapers with an even better experience.
Meredith Zhao, CTO, Fourier Technology
ACM increases the efficiency of heat transfer between the coil and liquid, which improves flavors, extends coil life and much more.
ACM has been shown to help extend coil life by increasing coil saturation and reducing carbon buildup on coils.
According to Innokin, the Sensis demonstrates the great progress that has been made in vapor technology.
The industry distinguishes four generations of technology. First-generation vape technology was basic, where direct power output to the coils could not be adjusted. With the push of a button, or by simply inhaling, the battery heated coils, changing the liquid into vapor to deliver nicotine and flavors.
Second-generation vape technology introduced variable voltage and variable wattage, where adjusting the power output to the coils increases or decreases heat to personal taste. With adjustable voltage/wattage technology, vaporizers became smarter and more user-friendly. The device chipsets read the coil resistance then automatically calculated power output to provide a safer, personalized experience across devices and tanks. The simplicity of variable wattage has made it the most widely used vape technology today, especially in intermediate and advanced e-cigarettes.
Third-generation technology with temperature control utilized more advanced chipsets and new types of coil materials. Designed to eliminate dry-hits and reduce potential harm from damaged cotton wicking, third-generation vape technology used resistance-temperature correlation to calculate coil temperature based on detected coil resistance. Due to limited choices of coil materials and coil performance issues, temperature control is not used as widely as wattage mode.
The fourth generation features ACM technology as deployed in the Sensis.
March 24, 2021
EU MPs Tested on E-Cigarette Knowledge
Photo: Dan Johnston from Pixabay
How much politicians know about e-cigarettes and other novel tobacco products has a major effect on their perceptions of safety and risk, new research suggests.
A survey of members of the European Parliament (MEPs) found that those who were knowledgeable about novel tobacco products were far more likely than those with no knowledge to consider them less risky than smoking.
The survey conducted by ECigIntelligence and TobaccoIntelligence, independent data providers to the sector, found that:
A high proportion of MEPs have no knowledge about new nicotine products.
Views on risk seem linked to knowledge of the products. Those MEPs with knowledge of the products are more likely to consider the products less risky than smoking; those with no knowledge are more likely to consider the products the same or more harmful compared to smoking.
Most MEPs believe new nicotine products are likely to help existing smokers quit.
MEPs predominantly think that vaping is safer than smoking, but up to one in five think that some new nicotine products can be as risky as smoking.
The survey was carried out online and anonymously, and all data remains confidential other than in consolidated analysis. It was sent to all MEPs (from all member states and political parties), and responses were obtained from over 30 MEPs, representing nearly 5 percent of the European Parliament.
March 24, 2021
KT&G Seeks to Generate Half of its Sales Abroad
KT&G seeks to generate half of sales from abroad by 2025, according to the Yonhap News Agency.
Currently, KT&G earns 40 percent of its tobacco sales from exports.
The company operates sales subsidiaries in five countries—Russia, Indonesia, Turkey, Taiwan and the United States.
In 2020, its sales rose 6.8 percent to a record KRW5.3 trillion ($4.68 billion) from KRW4.96 trillion a year earlier, helped by strong demand for its products in Russia, the U.S. and the Middle East.
KT&G’s factories in South Korea, Russia, Turkey and Indonesia had a combined capacity of 13.6 billion cigarettes a year in 2020.
In addition to its mainstay tobacco business, KT&G owns Korea Ginseng Corp., which produces ginseng and cosmetics products.
March 24, 2021
Japan Tobacco Releases Integrated Report

Photo: JTI
Japan Tobacco (JT) has released its 2020 Integrated Report.
In full year 2019, JT began publishing its Integrated Report as a substitute for its Annual Report and Sustainability Report.
The report provides stakeholders with both key financial and nonfinancial information in order to have clearer and deeper understanding of the JT Group’s sustainable corporate value growth.
March 24, 2021
Registration Mandate for SEZ Manufacturers
Cigarette manufacturers operating in the Philippines’ special economic zones (SEZ) will soon have to register with the Bureau of Internal Revenue (BIR) to help curb illicit tobacco trade, reports The Philippine Star, citing the Department of Finance (DOF).
Some companies registered with the Philippine Economic Zone Authority (PEZA) have allegedly been engaging in illicit activity and enjoying tax breaks, according to Finance Secretary Carlos Dominguez III. “These errant firms have been depriving the government of unpaid income taxes, excise taxes, value-added tax (VAT) and customs duties whenever their illicit products are sold in the local market,” he said in a statement.
The BIR is drafting revised rules covering the operations of cigarette makers in SEZs, according to a letter from Dominguez to Trade Secretary Ramon Lopez.
“The fact that the alleged illicit activities occurred inside the PEZA Ecozone is alarming,” Dominguez wrote. “Not only did PEZA provide tax breaks to the alleged perpetrators, the government has lost billions of pesos in income taxes, excise taxes, VAT and customs duties when these illicit goods entered the local market.”
“It appears that the manufacturers took advantage of the lackadaisical monitoring inside the zone to perpetrate their schemes under the cover of the laws, rules and policies enacted to favor them,” said Dominguez.
PEZA-registered locators are subject to an income tax holiday between four years and eight years as well as duty-free importation of raw materials, capital equipment, machinery and parts. Locators can only sell up to 30 percent of their production to the domestic market—if they sell more than that, they must pay taxes and duties at regular rates.
“We expect the completion of the revised rules by the BIR soon after the PEZA and other stakeholders have provided comments thereon,” Dominguez wrote in his letter.
March 24, 2021
Manila Drops Vaccine-Purchasing Ban

Image: Malacanan Palace Presidential Museum & Library
Tobacco companies in the Philippines will be allowed to purchase Covid-19 vaccines after all, reports The Manila Times, citing a statement from the presidential palace.
The announcement follows controversy over proposed implemented rules and regulations of the Coronavirus Disease 2019 Vaccination Program Act of 2021, which would have barred manufacturers of tobacco, milk and sugary beverages from procuring vaccines for their workers.
Those provisions have now been removed, according to The Manila Times.
In 2010, the Civil Service Commission and the Department of Health (DOH) issued a joint memorandum banning all forms of government interaction with the tobacco industry.
It is one thing to discourage smoking or lactose intolerance and quite another to destroy the livelihood and the lives of people who depend on the tobacco, milk, sugar and soda companies, which pay more taxes than the directors of PhilHealth have stolen.
Teodoro Locsin, Foreign Affairs Secretary
This memorandum was being cited by the DOH in moving to ban tobacco and select other industries from availing of Covid-19 vaccines from the government.
“The DOH, in its review, shall ensure that the tobacco, formula milk and other industries in conflict with the interest of public health will not be part of this endeavor pursuant to existing DOH guidelines and issuances,” the draft regulations said.
The move attracted widespread criticism. Foreign Affairs Secretary Teodoro Locsin likened it to the Nazi-era when leaders decided who would live or die. “It is one thing to discourage smoking or lactose intolerance and quite another to destroy the livelihood and the lives of people who depend on the tobacco, milk, sugar and soda companies, which pay more taxes than the directors of PhilHealth [Philippine Health Insurance Corp.] have stolen,” he said.
Health Undersecretary Maria Rosario Vergeire stressed that the administrative order leaked online was a draft.
She added that the Philippines is party to the World Health Organization’s Framework Convention on Tobacco Control that prevents tobacco-related industries from providing health-related services for marketing advocacy.
March 24, 2021
Turning Point Appoints Reformina as CFO

Photo: Jakub Jirsák | Dreamstime.com
Turning Point Brands has appointed Chief Business Development Officer Louie Reformina as the company’s new chief financial officer effective May 1, 2021. Reformina is replacing Bobby Lavan, who will step down after first quarter earnings to pursue a new opportunity. In addition, Brian Wigginton, Turning Point Brands’ chief accounting officer, has been promoted from vice president to senior vice president.
“I would like to thank Bobby for his unceasing commitment to the company,” said Larry Wexler, Turning Point Brands’ president and CEO, in a statement. “Bobby played a major role in improving Turning Point Brands’ capital structure, streamlining the business, making accretive acquisitions and investments and positioning the company for the growth that we are experiencing today.
“I look forward to tracking his future progress. Additionally, Louie has played an important leadership role in the company by pivoting our focus to higher growth opportunities in cannabis-related and other branded consumer product industries. I am excited to see him expand his responsibilities as we accelerate our growth trajectory.”
“Turning Point Brands is one of the most innovative and well-capitalized companies in the high-growth cannabis-related accessories market,” said Reformina. “Our iconic brands and market-leading distribution platform set us apart in this rapidly evolving space. In addition, our New York Stock Exchange listing helps to provide deep access to the capital markets, which allows us to opportunistically take advantage of acquisition opportunities that are beyond the reach of many competitors.
I look forward to continuing to work with the team to reinvest our substantial free cash flow in high-growth branded consumer products, expand our distribution infrastructure and strengthen our capital position.
Louie Reformina
“As CFO, I look forward to continuing to work with the team to reinvest our substantial free cash flow in high-growth branded consumer products, expand our distribution infrastructure and strengthen our capital position.”
“I would like to thank Larry and the management team at Turning Point Brands for the opportunity to work with them on the company’s continued evolution,” said Lavan. “I have been working closely with Louie since he first joined the company and am confident that his elevation to CFO will help to ensure a seamless transition while continuing the company’s focus on growth.”
Reformina joined Turning Point Brands in 2019 and has more than 20 years of financial experience. He previously served in investment roles at Point72 Asset Management, Waterfront Capital Partners, Perella Weinberg Partners and Vestar Capital Partners. He began his career as an investment banker at Goldman Sachs & Co. and received his Master of Business Administration degree from the Stanford University Graduate School of Business as well as his Bachelor of Science degree in electrical engineering from Cornell University, where he graduated summa cum laude.
Turning Point Brands estimates that net sales for the first quarter of 2021 will be at the high end or above the previous guidance of $97 million to $102 million provided during the presentation of its full-year and fourth-quarter 2020 results on Feb. 10, 2021.
March 24, 2021