Category: Uncategorized

Banned for Life

Photo: Nikolay

Harm reduction activists worry about New Zealand’s plan to phase out tobacco use.

By Stefanie Rossel

Imagine it’s 2039. You’re at one of a few remaining tobacconist stores with a former classmate, both trying to buy some combustible cigarettes. But as it happens, you were born on New Year’s Day 2009 and your friend on New Year’s Eve 2008. An ID check lets him acquire the desired smokes, but you are not allowed to buy the products—for the duration of your life.
This is a situation New Zealanders will soon be facing. In January, New Zealand unveiled its Smoke-Free Aotearoa 2025 Action Plan, an amendment of the country’s Smokefree Environments Act (1990), which seeks to take the country’s already low current smoking prevalence of just under 10 percent down to 5 percent or below within the next three years.
The proposal’s most spectacular element is a generational tobacco ban: Starting in 2023, anyone born on or after Jan. 1, 2009, would be barred for life from purchasing combustible cigarettes under the new rules. Someone aged 14 when the law entered into effect would hence never be able to legally purchase tobacco. In a statement, Ayesha Verrall, the country’s associate health minister, said the government wants to make sure young people never start smoking. While it would still take decades to phase out tobacco products completely, the generation currently at school would feel the effect of the legislation very soon.
In late July, the bill passed the first reading in Parliament. It is now being reviewed by the Parliament’s public health select committee and is expected to be adopted in December. The regulation would be a world first, and implementation is likely; Prime Minister Jacinda Ardern’s Labour Party is governing with an absolute majority.
Nancy Loucas
Reactions to the proposal have been divided, according to Nancy Loucas, co-founder of Aotearoa Vapers Community Advocacy (AVCA). The association agrees with the “smoke-free generation” in principle but remains concerned that it could be an overreach. “Our youth smoking rate is already at 1.3 percent, so many are saying it’s unnecessary and overkill,” she says. “There are concerns [that] an older sibling giving someone from the smoke-free generation [SFG] tobacco may be criminalized, and that is not acceptable. Others are saying it’s a possible human rights violation because if someone from the SFG comes of age and can drink, etc., but not buy tobacco, how can the government prevent a legal adult from a legal consumer product? The reaction has been much more negative than the government expected, I would say.”
Marewa Glover
Marewa Glover, director of the Centre of Research Excellence: Indigenous Sovereignty and Smoking, describes the strategy as “virtue signaling.” “The negative consequences of previous ‘smoke-free’ legislation are already resulting in an uptick in young people committing robberies for tobacco and being charged and imprisoned for such crimes,” she says. “Youth mental health and preventing youth suicide are a higher priority for increased intervention. The negative consequences of the proposed legislation risks will be worsening that crisis. The law will create an unnecessarily larger bureaucracy, increased enforcement activity, and more people will be diverted into the justice system. It also will set a dangerous precedent. Young people are not taking up smoking now. It is no longer considered ‘cool.’ The rationale for preventing the ‘rite of passage,’ as stated by the minister in her interview on June 21, 2022, with the editor of the Tobacco Control journal, is therefore outdated and flawed.”
The proposal not only discriminates against age. Legal experts have indicated that the generational ban will particularly target Maori and Pacific Islanders, among whom smoking prevalence is disproportionately high. According to Health New Zealand, the Maori smoking rate was 31.4 percent in 2019–2020. At 32 percent, Maori women constitute New Zealand’s highest smoking rate. According to critics, the generational tobacco ban could end up stigmatizing certain communities. “That is a very real possibility,” confirms Loucas. “The Maori and Pacifica communities are already disadvantaged, and the last thing they need is more stigma and discrimination.”
Glover, who has been working closely with Maori smokers for years, says New Zealand’s adoption of government Ministry of Health campaigns to encourage people who smoke to quit or switch to vaping is working particularly well for Maori. “There is no need for another drastic punitive law to be passed. The negative consequences already mentioned will worsen other outcomes for Maori, e.g., associated with the increase in black market activity.”

Rapid Withdrawal
Proponents say the goal of a smoke-free generation is achievable and realistic whereas smokers’ rights advocates consider the plan an attack on personal freedoms, a prohibition that will not work. Others fear it might backfire and fuel the already burgeoning illicit cigarette market, which is estimated to account for around 10 percent of New Zealand’s total tobacco market. Loucas believes the illicit market is much higher because the official numbers capture only imports while leaving out the growers and sellers in the country. “The gangs will take over as they have with everything else the government ‘bans’ if the law is punitive,” she says. “Bans don’t work. They never have and never will. The market, especially the gray and black market, will always rise to meet the need.”
The two other components of New Zealand’s Action Plan also have the potential to boost the black market: Starting in 2024, the number of legal retail outlets will be reduced from about 8,000 to fewer than 500. Cigarettes will no longer be available at kiosks, gas stations or supermarkets, with sales limited to licensed tobacco retailers. From 2025, the country will mandate the sale of very low-nicotine cigarettes. Currently, a 90 percent to 95 percent nicotine reduction to nonaddictive levels is being discussed. With a sense of understatement, Glover describes a nicotine yield of below 0.05 mg per gram as “subfunctional.”
Almost overnight, New Zealand’s government will make its citizens quit cold turkey. In contrast to the World Health Organization’s anti-tobacco harm reduction stance, though, the proposed law includes a massive broadening of addiction therapy offers. Vaping, which was regulated in 2020, will remain legal. “Vaping has worked so far in the last year to cut the number of people who smoke down drastically,” says Loucas. “I think we stay the course. What is missing is a public education campaign that was slated to start upon legalization but was sidetracked because of Covid. That education plan needs to be rolled out immediately to stop the disinformation campaign from a select few NGOs [nongovernmental organizations] who are anti-nicotine.”

Having passed the generational tobacco ban upon first reading in July, New Zealand lawmakers are likely to endorse the legislation in December. (Photo: asanojunki0110)

Legal Issues
With its tobacco control plans, New Zealand enters uncharted territory. While the tobacco-free generation was first discussed in 2010, it was never implemented anywhere on a nationwide scale. Bhutan banned tobacco sales and cultivation in 2010, but the measure backfired, with smugglers taking the place of legal vendors. In 2021, the Himalayan kingdom lifted the sales ban.
Mandatory very low-nicotine cigarettes, an objective also pursued by the U.S. Food and Drug Administration, might run into legal challenges as well, as AVCA points out. Like the generational tobacco ban, such a measure might prove to violate human rights on the basis that adults have the right to make informed choices. Vaping advocates believe there’s insufficient longitudinal research to prove that very low-nicotine cigarettes help people quit smoking. Further, the move could also see New Zealanders heading to the black market or growing their own tobacco.
The question of whether the planned measures are proportional is justified. New Zealand has been a model student as far as the implementation of tobacco control measures is concerned. From the 1970s, the country has used the full range of tobacco control instruments, including smoke-free laws, advertising bans and standardized cigarette packaging. Due to high taxation, New Zealand cigarette prices are the second-highest in the world after Australia’s. A pack of 20 Marlboro cigarettes retails at around nzd37 ($22.69). Smoking rates have dropped drastically over the past decades. With those lighting up accounting for less than 10 percent of the population, the country has roughly 450,000 smokers left.

A Blueprint for Others?
The world is watching as New Zealand embarks on its smoke-free experiment. Shortly after New Zealand had revealed its Action Plan, Singapore’s health authorities started debating whether the city state should follow suit by gradually raising the smoking age until it covers the entire population. However, Singapore is unlikely to copy New Zealand’s embrace of vaping as an alternative to smoking, as vape products are banned in the city state. Singapore has been fiercely anti-tobacco since the 1980s, with measures having become progressively stricter over the years. The country’s smoking prevalence presently stands at 10 percent.
Also in January, Malaysia announced it would ban the use, possession and sale of cigarettes and vape products for those born after 2007. The bill proposes a fine for offenders and also empowers enforcement officers to open without a warrant any baggage or container for inspection. The draft law was met with resistance from several sides. The parliamentary select committee on health called for the plan to be postponed by three years, arguing that the period should be used to study the possible need to enact separate legislation for combustible and noncombustible tobacco products.
In Malaysia, too, there are concerns about black market sales. Critics fear a generational tobacco ban would further invigorate the country’s illicit cigarette market, which is proportionally already the largest in the world, accounting for about 60 percent of the country’s total tobacco market. In August, the bill was sent back to the parliamentary select committee for further scrutiny. The regulation may be further delayed or even abandoned as Malaysia’s Parliament is expected to be dissolved in late October after the tabling of the budget.
Outside the Asia-Pacific region, Denmark said it wanted to introduce New Zealand-style measures, including a generational ban that would prohibit anyone born in or after 2010 to buy tobacco products.
“Bans and prohibition do not work,” Loucas emphasizes. “They create more harm, and that is the last thing any public health promoter wants as their legacy. In countries that are willing to accept tobacco harm reduction on the basis of science and evidence, they can (and should) see similar decreases in smoking relative to population, such as New Zealand has. But it requires risk-proportionate regulations and effective and compassionate enforcement.”

Stefanie Rossel is Tobacco Reporter’s editorial contributor. An experienced trade journalist, she combines sharp reporting skills with in-depth knowledge of the tobacco and vapor industries. Prior to joining Tobacco Reporter, Stefanie was editor-in-chief at Tobacco Journal International, where she worked for a decade. Fluent in English, German and French, Stefanie covers tobacco news around the world. She is based in Germany.

October 3, 2022
Failure to Launch

Photo: Aleksandr

Zimbabwe’s attempt to diversify into cannabis is proving more challenging than some anticipated.

By Daisy Jeremani

Zimbabwe announced its approval for cannabis growing for medicinal and industrial use in April 2018 amid much hope for an immediate economic impact.
Finance Minister Mthuli Ncube projected export revenues of up to usd1.2 billion in the first year of growing, processing and exporting the crop and its products. The forecast is almost at par with what gold, the southern African country’s most lucrative export, brings in—and higher than the amount it generates from tobacco, its current No. 1 agricultural export. Cannabis was, too, touted as a diversification route for tobacco growers amid declining demand for the golden leaf.
However, experts have cautioned that Zimbabwe may not realize the benefits as rapidly as authorities initially projected. Forty-two months since the government issued the first licenses, only 15 out of the 57 companies have started work, hampered by a plethora of challenges. Chief among them: lack of financing and expertise.

Speaking to Tobacco Reporter just after her organization, Zimbabwe Industrial Hemp Trust (ZIHT), hosted a cannabis roundtable under the theme “Unpacking the Challenges and Potential of Cannabis as a Medicine” in Harare, the capital city, on Sept. 7, 2022, Zorodzai Maroveke said a lot of work still needs to be done for the country to realize gains from the crop.
A key proponent of legal cannabis production, Maroveke said most licensees lack guaranteed off-take agreements. An unstable market has not helped matters, she added, as prices have kept fluctuating since Zimbabwe became Africa’s second nation after Lesotho to legalize cannabis for medicinal and industrial use.
“An unstable market has been a major challenge for investors to move forward with this project in Zimbabwe and also the issue of funding. Most banks are not willing to finance cannabis because they still don’t understand it,” said the ZIHT founder and CEO.

Another obstacle for license holders is that they have to import expertise as this is a new frontier for the country. Recruiting the right skills is expensive. The cannabis regulatory framework, which she described as very strict, has also hampered the speed at which the industry is progressing.
Maroveke said the cost implications of growing medicinal cannabis are high, citing the European Union’s good manufacturing practices (GMP), which force producers to set up facilities of a high standard of hygiene and security and hire well-trained personnel.
“You will find that for a very small project, maybe even a hectare project, one would potentially pump out not less than usd1million,” said Maroveke.
So if one is to expand, there is a need for more funding, not considering money that must be paid for the GMP compliance auditors as well as inputs, like seeds, which are not only expensive but are also imported.
Though industrial hemp is generally cheaper to produce than medicinal cannabis, the cost depends on its type, she noted. If it is botanical, which is grain hemp for the CBD flower, one should be prepared to part with at least usd200 for a 5 ha project. The market determines the standards and quality that the farmer has to put in.
“So if you’re going to do hemp for fiber and grain, it’s obviously going to be cheaper; you’re looking at usd3,000–usd4,000 a hectare. But Zimbabwe’s hemp and grain industry hasn’t developed to that extent, so we don’t have many activities in those particular subsectors of industrial hemp,” she said.

Tobacco is likely to remain Zimbabwe’s No. 1 agricultural export for the foreseeable future. (Photo: Cavendish Lloyd)

The Sept. 8 roundtable was meant to find, bridge and plug the knowledge gap not only among health professionals but also other experts along the value chain. It is against that backdrop that a top Zimbabwean pharmaceutical supplier, New Avakash International, awarded scholarships to 100 health personnel to undergo training to make them more conversant with cannabis.
At the moment, local varieties are at the research stage. Due to the dictates of the market, buyers direct farmers toward the genetics they want, which at this stage are all imported. As a result, roundtable participants called for more investment in research and development and the development of local growing and processing expertise. As the industry tries to find its place, Maroveke said the government should support it through tax breaks and other incentives for cannabis value addition to be accelerated.
She said Zimbabwe will only realize the gains from cannabis once production kicks off and the export markets are stable and guaranteed.

Former Zimbabwe Tobacco Research Board (TRB) CEO Dahlia Garwe noted that the country leapt in headfirst without conducting proper market research.
“We were supposed to look at what kind of varieties we should be growing and where exactly the material will end. We have a lot of cases where people grew cannabis, but they don’t know what to do with it,” she said.
Garwe noted that the costs involved in setting up facilities for the processing of the herb and for a basic setup are as high as usd400,000. For a facility that is compliant with all the necessary health requirements, the costs can be about usd3 million.
With regards to research that is underway, she said experts are looking for locally adapted germplasm, with the TRB going around the country to identify varieties adapted to the local environment. After that, they would breed local varieties and material from elsewhere to come up with varieties that are most suitable for Zimbabwe.
“That is ongoing work. It will obviously take a few years before we get to a point where we say we have locally adapted varieties,” she said.
However, this is not to say varieties developed elsewhere can’t do well in Zimbabwe, “but that’s where the research comes in, where you’re actually evaluating varieties coming from elsewhere and you see whether they actually work or not.”

Speaking while commissioning a usd27 million medicinal cannabis project by Swiss Bioceuticals in May 2022, Zimbabwean President Emmerson Mnangagwa expressed frustration over the slow investment by licensees.
“It is disappointing that since 2018, only 15 out of 57 entities issued with cannabis licenses are operational,” he said. “Such licenses should not be held for speculative purposes, and those not using them risk government invoking the ‘use it or lose it’ principle.”
Former Tobacco Industry and Marketing Board chairperson Monica Chinamasa said farmers are still waiting for the ongoing research on varieties that are suitable for the local climate.
“We are still waiting for the TRB to guide us on this matter,” she said.
The EU requires GMP and good agricultural collection practices certificates to be in place before a cannabis producer can venture into that business. The financial implications for applying for the certification are huge for some Zimbabwean investors, said Munyaradzi Shamhudzarir of Voedsel Cannabis, one of the few Zimbabwe-owned companies to have planted cannabis.
“The process of getting these certifications is also very long—at least three years before you can complete all the audits and get certification,” he said.

October 3, 2022
Transformation and Its Enemies

Photo: Chan2545

The twin strategies of migration away from combustible nicotine products and diversification into new businesses underpin the tobacco industry transformation. Why is there so much opposition?

By Clive Bates

How should a rational and dispassionate public health advocate think about tobacco companies? How should tobacco companies think about public health?
The simple and lazy answer is that they are sworn enemies in a permanent and irreconcilable conflict. This idea has now been immortalized as a guiding principle by the World Health Organization. The “scream test” devised by Australian anti-tobacco campaigners was a crude forerunner of the WHO’s principle: “If a new policy gets no reaction from the tobacco industry, it rarely has an impact, but if the industry screams blue murder, the impact will be large.” If the industry hates it, it must be good for public health.
But what if there are policies, practices and messages that are good for the tobacco industry and public health? Or bad for both? One of the accusations frequently thrown at public health advocates who favor tobacco harm reduction is that they are doing the bidding of Big Tobacco. No one likes to be accused of that. But implicit in that accusation is either the assumption that tobacco harm reduction cannot be good for both or worse, that it is more important to hurt the tobacco industry than to serve public health. We see this playing out in the industry’s twin-track efforts to transform by migration and diversification: migration into noncombustible nicotine products and diversification into non-nicotine businesses in which they have natural commercial advantages.

These issues loom large in the transition strategies of tobacco companies, which range across a continuum from “not bothered; we like the business as it is” to “this is the competitive play of the 21st century, and we’re all in.” In my view, the transition strategies of the companies will be highly beneficial for both public health and the companies that successfully transform. Transition involves giant companies moving out of the merchant-of-death business and into something closer to selling mild and popular recreational stimulants. For public health reasons, I would be happy if tobacco companies made handsome profits from a diversified business far less reliant on cigarettes. Yet their efforts to attempt this attract strident opposition at every turn.
Why? I think it is worth unpacking this opposition a little.

First, is the continued sale of cigarettes just too much to bear? How can public health welcome transformation when the companies involved are still hooking kids, selling trillions of cigarettes and killing millions of people? Here, public health advocates must understand the nature of the market and a corporation. Every country has a lawful market for cigarettes. Commercial tobacco sales are permitted, regulated and taxed by governments. There is also a demand for cigarettes, with over a billion smokers consuming over 5 trillion cigarettes annually. This demand will inevitably be matched by supply, and the suppliers are, by definition, the tobacco industry. We should treat this as a given not an act of evil—a fact of life that we may not like that much but that constitutes the reality in which we try to secure public health gains. I am all for putting pressure on the cigarette trade through tobacco control measures, but these are the prerogative of governments. We should expect companies to compete vigorously for market share within the parameters set by policy and law. That should not be a shock; it is what companies do. Public health advocacy should be focused on influencing the regulatory, fiscal and communications environment in which tobacco companies operate and challenging abusive business practices. Other than gratifying righteousness, it serves little purpose to condemn tobacco companies for what they are and must be. What matters is how this can change.

Second, should we only trust the tobacco industry when they pull out of cigarettes? There have been numerous calls for companies to stop selling cigarettes. The problem is that the advocates of this idea believe the companies should just do it unilaterally. Public health colleagues need a better grasp of shareholders and fiduciary duties. The companies cannot simply squeeze or shut down a lucrative earnings flow to their shareholders. The management would be fired, the company taken over or the cigarette assets sold as a going concern with no public health benefit. Ironically, the companies, to varying degrees, do have viable exit strategies for cigarettes—migration of the nicotine business to noncombustibles and diversification to “adjacent” industries such as plant biotechnology and vaccines, inhalation technologies and recreational stimulants. This strategy to exit the cigarette trade meets an essential requirement; if successful, it can work well for shareholders. The irony is that public health campaigners lament the slow progress in phasing out cigarettes. Yet, at the same time, they oppose every element of the only commercially viable strategy to bring it about: migration and diversification.

Third, is tobacco harm reduction just the “nicotine maintenance strategy of Big Tobacco”? The concern is that diversification is merely a cunning ruse to escape the inevitable demise of the tobacco industry and the nicotine market. Here, public health advocates need to think more carefully about the product and where it is heading. I believe there is a far more robust long-term market for nicotine than for smoking. That’s because nicotine use is popular among many for its impacts on stress, anxiety, concentration and pleasurable sensations. And nicotine itself is not that harmful. The main reason people have stopped using nicotine over several decades is the health impacts of smoking and the pressures from policies and taxation to address the health impacts of smoking. The early stages of migration to noncombustibles have been welcomed by many as a harm reduction option for smokers. But in the longer term, the noncombustible products represent the basis for a nicotine market that operates within the normal boundaries of acceptable risk. This may open a frightening vista for some in public health. Nicotine products with minimal harm create weird new challenges that we have yet to fully grasp. The deterrence effects from the harms of smoking are lost, the case for taxes and regulation to control use is diminished, the designation of nicotine as an addictive agent no longer applies and the whole purpose of the vast complex of tobacco control interests is lost. There is only a case for tobacco control if there are serious harms. Otherwise, it becomes a moralistic war on drugs enterprise.

Fourth, is diversification just an exercise in reputation laundering? Much tobacco control activism now relies on “denormalizing” the industry and, by inference, whatever the industry touches. Tobacco companies can deploy their human resources, facilities, assets and intellectual property to branch out into new businesses for which they have inbuilt advantages. Shocking venom and energy have gone into attacking companies and their staff for some of their efforts to develop or acquire pharmaceutical businesses, invest in vaccine production, exploit their plant biotechnology expertise, enter new markets for personal well-being recreational drugs or even provide ventilators to struggling hospitals. It is bizarre. What is achieved by preventing companies from moving into new businesses that reduce the dependence on cigarettes? This can only be explained by a fear that the industry will reform itself into a more normal business and that arguments grounded in denormalization will fail. The arguments from tobacco control are peculiarly aesthetic—it just looks wrong for a tobacco company to make drugs to treat chronic obstructive pulmonary disease (COPD) or provide Covid-19 vaccines. But why is this so wrong? What are the ethics of opposing the development and deployment of a vaccine or COPD treatment if these would otherwise be successful in the market?

Finally, will migration and diversification be additional and not replace cigarettes? Maybe Big Tobacco is building even bigger, more voracious businesses? Here, public health advocates need to grasp what shapes a market. Ultimately, that is up to consumers and what they are inclined to buy. But in a market like this, policymakers and communicators have a role. For example, they can make taxation and regulation proportionate to risk. They can communicate candidly about risks. They can have better insights into unintended consequences or test and reject assumptions that fail to hold water in real life. Some companies may grow bigger through migration and diversification or even acquire a larger share of the cigarette business—that is how competition works. What matters for public health is not what individual companies are doing, though it matters greatly to the companies. What counts is the migration of the whole market to reduced-harm products instead of cigarettes, which is strongly affected by public health policies and communications. If the companies also diversify to keep their shareholders engaged and exploit their advantages during a transition, what exactly is wrong with that?
In public health, we need to stop our warrior rhetoric and think harder about the world as it really works and what will change it for the better.

Clive Bates is the director of Counterfactual Consulting and the former director of Action on Smoking and Health (U.K.).

October 3, 2022
Poised for Growth

Photos: Kaival Brands Innovations Group

After the win of its merits case against the FDA, Kaival Brands and Bidi Vapor are back on track.

By Stefanie Rossel

The year 2022 has been both challenging and exciting for Kaival Brands Innovations Group. The Melbourne, Florida, USA-based company is the exclusive distributor of products manufactured by Bidi Vapor, which is best known for its Bidi Stick vape pen, a disposable electronic nicotine-delivery system (ENDS).
In September 2021, Bidi Vapor received a marketing denial order (MDO) from the U.S. Food and Drug Administration for its nontobacco-flavored Bidi Sticks. The company had submitted premarket tobacco product applications (PMTAs) for the product’s nine flavor varieties plus a tobacco and a menthol variant.
In response to Bidi Vapor’s petition for review, the FDA stayed the MDO until December 2021, after which the order was again stayed by the 11th Circuit Court of Appeals. On Aug. 23, 2022, Bidi Vapor won its merits case against the FDA. Granting Bidi Vapor’s petition for review, the 11th Circuit ruled that the MDO was “arbitrary and capricious,” primarily because the FDA failed to consider the relevant marketing and sales access restriction plans included in Bidi Vapor’s PMTAs.
Eric Mosser
At the time of writing, the FDA had yet to announce how it would move forward following the 11th Circuit’s decision. “FDA could seek to appeal the decision by requesting ‘en banc’ review, or a review by the entire 11th Circuit,” explains Eric Mosser, president and chief operating officer of Kaival Brands Innovations Group. “Or they might even try to petition the Supreme Court to review the decision. Regardless, we anticipate being able to continue selling and marketing our flavored products for the duration of any potential appeal, subject to FDA enforcement discretion. It is also possible FDA will simply follow the court’s instructions and review Bidi’s nontobacco PMTAs instead of trying to appeal.”
Flavors, insists Mosser, are a critical matter of public health, and Kaival is adamantly opposed to illegal underage use of tobacco and vape products. “The company has focused on limiting access via contracts with partners prioritizing retailers’ age verification policies, secret shopper audits, repackaging devices to better align with FDA guidance, no use of social media or influencers and no consumer-facing advertising,” he says. “The company even discontinued its online direct sales to consumers—while we had state-of-the-art verification practices, company leaders realized online access was a way that underage youth in general were gaining access to vaping products and decided to eliminate that potential for the Bidi Sticks.”
According to the most recent National Youth Tobacco Survey, Bidi Vapor was not among the top brands that appeal to youth. In 2021, among students who currently used e-cigarettes, Puff Bar was the most commonly reported usual brand (26.8 percent) followed by Vuse (10.5 percent), Smok (8.6 percent), Juul (6.8 percent) and Suorin (2.1 percent).

Niraj Patel

Victory for Vaping
The 11th Circuit’s decision is a victory not just for Bidi Vapor and Kaival Brands but for the entire vaping and tobacco harm reduction industry, according to Mosser—especially for those companies who have been rigorously following the FDA guidelines in their attempts to obtain market authorization. “We at Kaival Brands have done so on the belief that the FDA will follow the science and allow solid evidence to guide their decisions. If that is the case, then the company is on solid ground, and we are hopeful FDA will ultimately agree that our products, including our nontobacco flavored products, are appropriate for the protection of the public health.”
The PMTA for the company’s tobacco-flavored Classic Bidi Stick is currently undergoing Phase III scientific review. There is no timeline for this process, says Niraj Patel, chief science and regulatory officer for Kaival Brands Innovations Group and president and CEO of Bidi Vapor. The Arctic Bidi Stick, which Bidi Vapor maintains is a menthol product, was characterized as a flavored product by the FDA and subjected to the MDO that was vacated. “Barring an appeal, we anticipate that FDA will soon begin the scientific review of the Arctic Bidi Stick PMTA along with our other nontobacco-flavored products,” says Patel.
Patel founded both companies. With a wholesale distribution network of more than 54,000 stores across the United States, Kaival Brands helped Bidi Sticks, which entered the market prior to 2016 under a different brand name and with limited success, to become the fastest-growing and now No. 1 disposable vape brand in the U.S. market. Despite the MDO, the Bidi Stick is still the bestselling disposable ENDS product based on retail sales for the 52-week period ending on Aug. 27, 2022, Nielsen data shows, according to the companies.
Kaival Brands, which commenced business operations in March 2020, generated a cumulative $100 million in revenues in less than a year. In July 2021, Kaival Brands’ stock began trading on the Nasdaq. In April 2022, the company announced the expansion of additional wholesale and retail accounts, a move expected to increase the reach of Bidi Sticks by about 28,000 stores and to make up for the losses the company experienced in the wake of the MDO.

Difficult Times
In fiscal year 2021, which Patel described as “very challenging,” Kaival Brands reported a net loss of $9 million compared to net income of approximately $3.8 million for fiscal year 2020. In a press release, Patel said the MDO had caused “irreparable harm to both Bidi Vapor and Kaival Brands.”
The greatest revenue loss occurred in the last two quarters of fiscal year 2021, between the lifting of the FDA’s administrative stay and the ordering of the judicial stay, when the company was unable to market its Bidi Sticks. Revenues for fiscal year 2021 were approximately $58.8 million compared to $64.3 million in the prior fiscal year. Kaival Brands’ revenues decreased by approximately $15.7 million in the second quarter of fiscal year 2022 compared to the same period of fiscal year 2021, but revenues rose 11 percent compared with the first quarter of 2022, suggesting further recovery.
The 2021 year also presented challenges to Kaival Brands’ attempted foray into the modern oral nicotine market, a category that is still a niche but that has recently grown dramatically. The global nicotine pouches market size was valued at $1.5 billion in 2021. Grand View Research expects it to increase at a compound annual growth rate (CAGR) of 35.7 percent from 2022 to 2030.
Bidi Vapor had planned to introduce its Bidi Pouch in February 2021, but due to the Covid-19 pandemic, the launch had to be postponed. In September 2021, the company said in a press release that the launch would be further delayed while the company reformulated the product to utilize tobacco-derived nicotine and sought FDA marketing authorization. The company had originally envisioned the pouch to contain synthetic nicotine but pivoted following concerns about the legality of nontobacco-derived nicotine.
Congress subsequently changed the definition of a “tobacco product” to include synthetic nicotine products, with the FDA requiring manufacturers of nontobacco nicotine products to submit PMTAs by May 14, 2022. As of July 13, 2022, any new synthetic nicotine product that has not received premarket authorization from the FDA cannot be legally marketed. “We did not launch our nicotine pouch product,” Patel says. “Due to concerns with synthetic nicotine, we decided to focus on tobacco-derived nicotine and will launch in the U.S. only after we obtain FDA PMTA marketing authorization.”

Cooperating with PMI
In June 2022, Patel handed over the management of Kaival Brands to Eric Mosser. The leadership change had always been a part of the plan, according to Mosser. “I was preparing for the leadership role, which was set to occur as soon as plans for international expansion solidified. International distribution came sooner than later once Philip Morris International decided to license technology from Bidi Vapor and now also has distribution rights in certain markets outside the United States.”
Two weeks earlier, Kaival Brands’ newly created wholly owned subsidiary, Kaival Brands International, had entered into a licensing agreement with Philip Morris Products (PMP), a wholly owned affiliate of PMI. The agreement grants to PMP a license of certain intellectual property rights relating to Bidi Vapor’s premium ENDS device, the Bidi Stick, as well as potentially newly developed devices to permit PMP to manufacture, promote, sell and distribute such ENDS devices and newly developed devices in international markets outside of the U.S. Patel called the agreement a major milestone in Kaival Brands’ efforts to expand the global sales and distribution of the Bidi Stick.
Kaival Brands, in turn, announced the launch of Veeba, PMI’s first disposable e-cigarette utilizing Bidi Vapor’s intellectual property, in Canada in late July. PMI’s new product is now the lowest-priced disposable vape on the Canadian market. Mosser says he anticipates revenues through royalties paid by PMP, pursuant to the licensing agreement, in the fourth fiscal quarter. “I see Kaival Brands reclaiming its previous revenue growth trajectory and expanding into additional market segments with new innovative products that we exclusively distribute or own, not only here in the U.S. but also in profitable global markets.”
Disposable e-cigarettes are a growth market. According to report from Future Market Insights, the global disposable e-cigarette market size is expected to be valued at $6.34 billion in 2022. The overall demand for disposable e-cigarettes is projected to grow at a CAGR of 11.2 percent between 2022 and 2032, totaling around $ 18.32 billion by 2032.

Stefanie Rossel is Tobacco Reporter’s editorial contributor. An experienced trade journalist, she combines sharp reporting skills with in-depth knowledge of the tobacco and vapor industries. Prior to joining Tobacco Reporter, Stefanie was editor-in-chief at Tobacco Journal International, where she worked for a decade. Fluent in English, German and French, Stefanie covers tobacco news around the world. She is based in Germany.

October 3, 2022
Solid Foundation

Sarah Bostwick (Photo: PMI)

Sarah Bostwick discusses the significance of materiality assessments in PMI’s long-term strategy.

By Stefanie Rossel

In the world of investment, the sustainability of businesses was long considered a negligible financial risk. According to the Sustainable Finance Disclosure Regulation, a European piece of legislation introduced to improve transparency in the market for sustainable investment, a sustainability risk is an environmental, social or governance (ESG) event or condition that, if it occurs, could cause an actual or potential material negative impact on the value of investment.
As the effects of climate change became more noticeable, however, sustainability became an increasingly important consideration for companies, requiring them to adjust their risk management strategies. Today, a company’s ability to manage sustainability issues is thought to be related directly to its long-term growth. Institutional investors, private equity firms and hedge funds now tend to prefer companies complying with ESG principles.
The Covid-19 pandemic has added new challenges for businesses, showing them that factors such as workplace culture or executives’ behavior are having a growing influence on corporate performance and company reputation and hence need to be included in their risk management plans.
In order to develop a sustainability strategy, companies use materiality and stakeholders’ assessments. Materiality, a concept that defines why and how certain issues are important for a company or a business sector, is considered one of the most crucial elements to determine business risks and impacts in this process. A sustainability materiality assessment (SMA) is the backbone of sustainability reporting.
Philip Morris International is working to deliver a smoke-free future and evolving its portfolio to include products outside of the tobacco and nicotine sectors. In February 2021, PMI announced its ambition to expand into wellness and healthcare areas and deliver innovative products and solutions that aim to address unmet consumer and patient needs.
PMI conducted its first SMA in 2016 and updated the assessment in 2018, 2019 and 2021, according to Sarah Bostwick, head of sustainability stakeholder engagement at PMI. “Sustainability is at the core of PMI’s business strategy and is an opportunity for innovation, growth and the long-term value creation of the company,” she says. “Our sustainability materiality assessment forms the foundation of PMI’s sustainability strategy. It helps us to ensure that our efforts remain focused on those areas where we can have the greatest impact and that we continue to deliver relevant reporting to our stakeholders. To keep pace with our business transformation toward a smoke-free future and constantly evolving stakeholder priorities, it’s necessary to regularly update our sustainability materiality assessment.”
The periodic SMAs, adds Bostwick, allow PMI to monitor and adapt its business and long-term strategy to social, environmental, economic, political and technological changes. For the 2021 assessment, PMI partnered with BSD Consulting.

Double Sustainability Materiality Approach
PMI’s SMA follows a five-step process: Identifying ESG topics, gathering stakeholder perspectives, assessing outward impacts, assessing inward impacts and identifying the company’s most material topics. The assessment has embedded the concept of double materiality. In recent years, various standard setters and regulatory bodies have begun to refine the concept of sustainability materiality, with the European Union Corporate Sustainability Reporting Directive proposal and the International Sustainability Standards Board recently set up by the International Financial Reporting Standards Foundation Trustees both distinguishing between “single materiality” and “double materiality.”
The principle of double materiality acknowledges that businesses should assess both the risk and opportunities linked to ESG topics that can influence enterprise value creation (“inward impacts”) and the ESG impacts that a company can have on the planet and society (“outward impacts”). Furthermore, the concept of “dynamic materiality” recognizes that the financial materiality of an ESG impact can evolve over time.
In their foreword to PMI’s Sustainability Materiality Report 2021, BSD Consulting advisors explain that there are several advantages to this approach: “PMI gained deep insights that go far beyond generic sectoral or geographical approaches to match the company’s business model and dynamic transformation path. By considering emerging topics and aligning the process with internal risk management, PMI paved the way for pragmatic interim reviews and adjustments. In this way, the chosen approach allows the company to identify topics with medium-term to long-term strategic relevance for PMI and its business model as well as to dynamically adapt them to external or internal developments.”
Stakeholders play a key role in the assessment process. For its 2021 SMA, PMI expanded the group of stakeholders to participate, recognizing that there is value in integrating different perspectives into its analysis to deepen its understanding. In addition to soliciting input from employees, regulators, public health community, suppliers and civil society, PMI built on consumer understanding acquired over time (e.g., through studies on consumer perception of sustainability issues associated with the industry). The aim was to achieve a fair representation of its key stakeholders across the geographies it operates. Inputs were collected through an online survey in which around 150 internal and external stakeholders took part and in-depth qualitative interviews.
The company welcomes critical voices. “Constructive dialogue is essential to moving society forward,” Bostwick states. “To achieve the collective action required to solve the world’s most pressing challenges, we must include all voices, bringing together people with differing opinions, scrutinizing facts and finding common ground upon which to build. We will always have critics, and we remain committed to engaging with them honestly and transparently, pointing out the actions we are taking to address their concerns and welcoming feedback on how we can do better. In line with the principle of double materiality, the assessment consists of a five-pronged approach that evaluates both outward and inward impacts and accounts for the expectations of the company’s stakeholders.”

Emerging Topics Identified
While the company’s 2021 list of topics accounted for those assessed during its 2019 sustainability materiality analysis, it underwent significant changes that impact the comparability of results, says Bostwick. “Most topics were renamed as we sought to define them in a neutral way, accounting for both their potential positive and negative impacts. We also introduced new topics, such as ‘innovation in wellness and healthcare’ or ‘laws and regulations,’ to reflect changes in our business and value proposition and the rapid evolution of the regulatory landscape; bundled topics that were deeply connected, for instance, consolidating under ‘economic contribution’ aspects related to fiscal practices or illicit tobacco trade prevention; and split some topics that merited a more granular assessment, for example, decoupling ‘health and safety at work’ and ‘employee well-being.’ Lastly, reflecting the maturity of sustainability at PMI, we did not consider ‘human rights’ as a standalone topic but rather as an ever-present topic pervasive across our company and all ESG issues.”
Furthermore, the company identified three topics that were not included in the list of most material sustainability topics but that it expected to gain momentum in the future: human capital development, biodiversity and water. Their selection, Bostwick points out, relied on the identification of major trends in the sustainability arena, coupled with insights gathered throughout the various steps of the materiality process.
According to Bostwick, the SMAs’ findings have directly impacted PMI’s operations. In 2021, the company acquired Vectura Group, an inhaled drug development solutions specialist; Fertin Pharma, a developer and manufacturer of pharmaceutical and well-being products based on oral and intraoral delivery systems; and OtiTopic, a respiratory drug development company with a late-stage inhalable acetylsalicylic acid candidate for the prevention and treatment of acute myocardial infarction.
The emergence of “innovation in wellness and healthcare” as a material sustainability topic concretely manifests “changes to our strategy and vision that prompted the revision of our Statement of Purpose, expanding it to no longer have as its last horizon to achieve a smoke-free future but also to encompass our strategic efforts to venture toward becoming a wellness and healthcare company,” Bostwick says. “Notably, we aspire to achieve at least $1 billion in net revenues from such sources by 2025. In wellness, we are developing and looking to commercialize scientifically substantiated consumer health products and solutions with the aim to improve people’s lives. In healthcare products, we have already committed resources to its development pipeline of over-the-counter and prescription products.”

Optimized Strategy
As a consequence of the SMA’s results, PMI has also reframed its ESG framework to better articulate the ESG topics the company should focus on. “This framework recognizes two distinct forms of issues: Those that relate to our products—what we produce—which are part of the ‘Product Impact’ pillar and those related to our business operations—how we produce—which are part of the ‘Operational Impact’ pillar. We subsequently classified each topic based on its environmental, social or governance-related nature,” says Bostwick
“This approach allows us to appropriately highlight that, consistent with our sustainability materiality analysis results, addressing the social impacts generated by our products is the core of our strategy. The biggest and most pressing negative externality our strategy aims to address is the health impacts of cigarette smoking. This is the most important contribution we can make to public health and is the cornerstone of PMI’s purpose and business strategy.”
Following an acceleration of the company’s targets for carbon neutrality in its direct operations by 2025 and net-zero emissions across its value chain by 2040, the company aims to further develop its biodiversity strategy, covering all relevant areas of the company and its integration within its climate, water, forest and waste reduction efforts. “Noting the relevance that biodiversity and water have in our overall climate strategy and aims to preserve nature, we look forward to introducing 2025 targets that reflect our level of ambition,” Bostwick explains. “We expect to have a full set of targets and actionable milestones by the end of 2022.”

Stefanie Rossel is Tobacco Reporter’s editorial contributor. An experienced trade journalist, she combines sharp reporting skills with in-depth knowledge of the tobacco and vapor industries. Prior to joining Tobacco Reporter, Stefanie was editor-in-chief at Tobacco Journal International, where she worked for a decade. Fluent in English, German and French, Stefanie covers tobacco news around the world. She is based in Germany.

October 1, 2022
Essentra Invests in Sheet-Fed Applications

Photo: Essentra

Essentra Tapes has expanded its ability to serve the paper and board industry with the launch of its new SF-AS DH1 sheet fed applicator.
The tape applicator system was developed by Essentra Tapes’ in-house team of experts and facilitates efficient tape application in the sheet-fed manufacturing process.
The system can run automatic rapid stop/start performance on tape widths from 4 mm–25 mm and at compatible production line speeds. Crucially, it represents a sheet-fed solution that can rival continuous feed. The SF-AS DH1 can also be optimized for use on new and existing packaging lines and boasts a fully electronic interface as standard.
Designed and manufactured in a modern facility in Nottingham, U.K., the system is capable of running two applicator heads simultaneously, meaning RippaTape can be applied alongside release liners or double-sided tapes.
“Our vision was simple—to create a simple-to-operate, easy-to-integrate applicator, which addresses the tape application needs of sheet feed manufacturing and makes light work of creating e-commerce solutions,” said Ian Beresford, Essentra Tapes’ head of marketing and development.
“Our renewed investment into applicator technology and field engineers is the first of several important market interventions we hope to make between now and the end of the year.
“With prospective and existing customers increasingly looking to clean up operations and be more efficient, we’re confident our new sheet feed applicator can deliver a quality tape application every time.”
With modular assembly, easy integration, simple tape setup and renowned technical support and aftercare, the tape solutions provider says it is already fielding inquiries about this new plug-and-play solution.

September 23, 2022
Listening to Nicotine Users

Photo: G. Lombardo

A GTNF panel puts “forgotten smokers” in the spotlight.
Cheryl K. Olson
Skip Murray used to be one of the forgotten smokers. “I think people that have a life like my background are invisible to the people who have more influence in the world,” she says. “I hate to use class terms, but lower class.” Heavy drinking and mental illness ran in her family. Her memories include events psychologists would call “adverse childhood experiences.”
When Murray started smoking at age 10, no one paid any mind. Today, in her sixties, she gets her nicotine from a vaping device. She and her son (who suffered a heart attack at age 29) both used vapor products to quit cigarettes.
People who smoke find that their needs and views are routinely neglected by policymakers, physicians and other potential sources of support. Research shows that cigarette use is increasingly concentrated in what public health people describe as “vulnerable populations.” Some lack resources or homes, are challenged by physical or mental illnesses or are incarcerated. None want to be lectured to or labeled.
On Sept. 28, the Global Tobacco and Nicotine Forum (GTNF) will literally put a spotlight on these issues in a plenary event on “forgotten smokers.” Panelists will share personal experiences and research on ways to raise empathy and visibility for people who smoke and ideas to spread the benefits of harm reduction more equitably. They include Alex Clark, CEO of the Consumer Advocates for Smoke-Free Alternatives Association (CASAA); Will Godfrey, founding editor-in-chief of the Filter news site and executive director of the Influence Foundation; Skip Murray, a Minnesota-based vaping advocate and former vape shop owner; and Brent Taylor, senior director of consumer and marketplace insights at Altria. I will moderate the panel.
Who’s Still Smoking?
In 1965, 42 percent of adult Americans smoked. According to the U.S. Centers for Disease Control and Prevention (CDC), as of 2020, just 12.5 percent, or 25 of every 200 adults, were smoking. Sounds great! But with population growth, the absolute number is still huge: Almost 31 million adults use combustible cigarettes. The plummet in smoking rates has slowed to a crawl because the easy wins are over.
No job, or a poverty-level income. No high school diploma. Serious psychological distress. Disabilities that limit daily activities. Heavy alcohol use. Data from hundreds of thousands of people interviewed for the CDC’s National Health Interview Survey from 2008 to 2017 found that the more of those socioeconomic and health-related disadvantages you face, the more likely you are to start smoking and the less likely you are to quit. The majority of people who quit smoking during that period had zero or one disadvantage.
Sixteen million Americans live with a smoking-related disease, says the CDC. And the fallout is concentrated among those who can least afford it. Those who lack health insurance or use Medicaid are more than twice as likely as those with private insurance to smoke.
Before Covid-19 shutdowns and media-driven fears about vaping safety shuttered her business, Murray and her adult son sold e-liquids and vaping equipment to low-income and disabled nicotine users. “If you make $60,000 a year, you can afford not to smoke if you don’t want to,” she says. “But when you’re surviving on 20 grand a year or less, on a Social Security or disability check—if we don’t keep vaping affordable, and cheaper than smoking, people will smoke.”
The Case of People in Custody
A good example of the link between compounded disadvantages and smoking is found in jails and prisons. People in custody smoke at roughly four times the rate of those “outside,” and most have a history of other substance use. Historically, cigarettes fill multiple important roles in these settings. According to a World Health Organization report, “Tobacco use is completely entangled in prison life where it helps to cope with boredom, deprivation or stress, relieve anxiety and tension and function as a source of pleasure or monetary value in an environment without currency.”
Researching the plight of those held in officially “smoke-free” prisons was eye-opening to me. One recently incarcerated person we interviewed described watching guards spit out chewing tobacco that was quickly scraped up by prisoners to re-chew or to save for later smoking. “That’s how desperate some of these guys are,” he said. “Tobacco in jail is basically air.”
Another said, “People in jail crave tobacco. They want to relieve stress, and that’s a stress-reliever. I actually thought, when they took tobacco away, I thought there were going to be riots.” When cigarettes were banned in his facility, e-cigarettes were introduced. “Now, if they take this [vaping] away, there might be riots,” he said.
Vaping has been introduced with great success as an alternative to smoking in Scotland’s prisons and in some U.S. facilities (with vapes specially designed for safety and trackability). My public health colleagues often think of e-cigarettes exclusively as a health risk to teenagers. I’ve found that talking about vaping in the context of the traumas and needs of people in custody reframes the issue. At the GTNF, Godfrey will say more about this vulnerable population as well as the links between harm reduction for tobacco and for other substances.
Nicotine and Mental Health
Murray has been open about her lifelong mental health struggles and how she perceived the effects of nicotine on her brain. “When I stole my grandpa’s cigarette and snuck it behind his barn, from day one, I liked smoking,” she says. “It wasn’t icky to me. I felt better.”
When she finally sought professional help decades later, after attempts to quit nicotine led to suicidal thoughts, Murray received multiple diagnoses. After initially struggling with shame—“You hear stigmatizing things your whole life that you just accept as true”—she went public on social media with her story. “It was amazing how many people went, ‘Oh my God, me too,’” she says. “And amazing how many say they are self-medicating with nicotine.”
She finds relief from symptoms of attention-deficit/hyperactivity disorder through mindfulness practices and vaping nicotine. “And it helps me sleep. For most people, nicotine is a stimulant, but for people with ADHD, it has the opposite effect.” Many laboratory and real-world studies support the self-medication hypothesis for a range of mental health disorders, from depression to ADHD to schizophrenia.
Understanding the Harm Reduction Journey
New approaches are needed to help forgotten smokers who can’t or don’t want to quit nicotine find lower-risk options that work for them. An obvious next step is to stop blaming and start listening.
“We need to make sure that we bring the voice of the adult tobacco consumer into the center of the discussion about tobacco harm reduction,” says Taylor. “We need to spend time getting to know the individuals, what this means to them and what it can mean if they are successful in their harm reduction journey.”
At the GTNF, he’ll share insights from a recent deep dive into the daily lives of smokers trying to reduce their health risks, called the 21 Project. Named for the popular notion that it takes 21 days to change a habit, the Altria project recruited 21 smokers interested in making a change. Armed with information about the array of reduced-harm recreational nicotine products available, these individuals spent three weeks testing alternatives to cigarettes on their own. Researchers documented their stories of the day-by-day transition.
“You can review numbers and bar charts, but what you never get from them is the heart and feelings of the adult tobacco consumer,” says Taylor. “How do you take the experience of moving from cigarettes to smoke-free alternatives and bring it to life so that everyone can feel and understand what that’s like?”
Taylor is himself a former smoker who now uses alternative products. “Hearing the stories of people who smoked and switched to smoke-free alternatives was powerful and really emotional,” he says.
He says the 21 Project taught invaluable lessons to his organization about how to support and empower people in making changes. “We learned a ton; to hear firsthand people’s challenges and successes and what would sustain them on their transition journey was critically important.”
Adding to that perspective will be Clark of CASAA, which has long worked to highlight the issues facing nicotine consumers. Clark would like to do away with the victim narrative that casts people who smoke as dupes swayed by peer pressure and advertising.
“Even with a growing awareness of the need to address issues of health, racial and economic equity, the legacy of stigma embedded in anti-smoking policies is leaving millions of people behind,” he says. “The overweighted focus on predatory marketing as the driver of youth tobacco use is ultimately dismissive of more powerful underlying factors contributing to any substance use.”

Cheryl K. Olson is a California-based public health researcher who specializes in behavioral health issues and consults on tobacco product behaviors via McKinney Regulatory Science Associates. She spent 15 years on the faculty of Harvard Medical School.

September 1, 2022
Bidi Vapor Prevails Over FDA in PMTA Denial Suit
The U.S. Court of Appeals for the Eleventh Circuit has ruled that the U.S. Food and Drug Administration’s marketing denial orders (MDOs) for Kaival Brands’ Bidi Vapor products are arbitrary and capricious.

“The Administration refused to consider the marketing and sales access restrictions plans based on both its need for efficiency and its experience that the marketing and sales access restrictions do not sufficiently reduce youth use of electronic nicotine products,” Chief Judge William Pryor wrote. “Because ‘agency action is lawful only if it rests on a consideration of the relevant factors,’ and the Administration failed to consider the marketing and sales access restrictions plans, the marketing denial orders were arbitrary and capricious.”

In the court’s 2-1 split decision, additionally, the majority stated:

The court recognizes relevant distinctions between closed/cartridge systems (that are easy to conceal and use) and the open tank liquids sold in vape shops;

FDA’s refusal to review marketing plans was error and not harmless (disagreeing with Fifth and DC Circuits).

In the 70-page opinion, Bidi Vapor, Diamond Vapor, Johnny Copper, Vapor Unlimited, Union Street Brands and Pop Vapor, the petitioners in the case, had all appeals granted, denial orders vacated and remanded.

In her dissent, Judge Robin Stacie Rosenbaum wrote, “Spoiler alert: This opinion contains spoilers on how the U.S. Food and Drug Administration will resolve petitioner vaping product companies’ premarket tobacco product applications on remand from this appeal.”

She then stated “never mind. There’s nothing to spoil here. Anyone who knows all the relevant facts necessarily already knows how this one ends.”

She stated that the while the majority faulted the FDA for not considering the companies’ proposed restrictions on youth use, the FDA’s framework for evaluating PMTAs leaves “no room for doubt that the FDA will deny—in fact, under the Family Smoking Prevention and Tobacco Control Act, must deny—the applications on remand. To paraphrase the Borg, then, remand is futile.”
August 24, 2022
Milo Vapes to Launch Two Unique Brands for Middle East

Milo Vapes Global (MVG) has announced its plan for its Fall 2022 product launch. The range of flavored nicotine vaping products will be released under two brands, Milo Vapour and Sahara Mist, which will be distributed exclusively in the Middle East market.

“Influenced by history and culture, we carefully selected and drafted new and innovative tobacco products that are tailored to the consumers’ tastes and cravings,” says Mike Khalil, president, and founder of MVG. “The company is committed to its mission of delivering solutions to the smoking epidemic by delivering new tobacco products that aim to better smokers’ quality of life.”

The e-cigarettes market is estimated to grow at a rate of 9.7 percent annually and is estimated to reach $485 million by 2025, up from $267.9 million in 2018. MVG aims to contribute to the growth of the e-cigarette market through innovations and brand recognition in conjunction with our harm reduction initiative, according to a press release.

“Governments could play an essential role in changing the population’s behavior toward smoking. The government must regulate and oversee the vape industry in each country, and the health departments should safeguard the vape industry and protect consumers in each country by ensuring the safety and integrity of e-cigarettes,” said Khalil. “Furthermore, healthcare providers should advise smoking patients to transition to less harmful alternatives such as e-cigarettes through healthcare strategies and disease prevention programs.”

August 23, 2022
Hedge Fund Might Force PMI to Raise its Swedish Match Bid

Photo: Swedish Match

A hedge fund might force Philip Morris International to raise its bid for Swedish Match, according to an article in The Wall Street Journal.
On May 11, PMI offered SEK161.2 billion ($16.14 billion) to purchase Swedish Match. The acceptance period for the offer was initially set to expire on Sept. 30, 2022, but was later extended to Oct. 21, 2022, as the bid awaits approval from the European Commission.
The offer is conditional on PMI gaining more than 90 percent of Swedish Match’s Stockholm-listed shares.
Since the companies announced their deal, Elliott Management Corp. has acquired an undisclosed stake in Swedish Match. According to Massimo Stabilini, a hedge-fund manager at London-based Sinclair Capital, Elliott is trying to get a better price from PMI.
Elliott would need to buy close to $1.6 billion worth of Swedish Match stock to stop Philip Morris reaching 90 percent, suggesting it might need others to join its campaign. Under Swedish rules, it will also have to disclose its holding if its stake reaches 5 percent.
Elliott is not the only Swedish Match shareholder seeking better terms. Earlier this year, shareholder Bronte Capital also opposed the takeover, saying the offer price was “unacceptable,” according to Reuters.
Investors holding out for a better price are betting that PMI will cough up rather than walk away from the deal. The acquisition is key to the cigarette giant’s stated goal of generating more than 50 percent of its net revenue from smoke-free products by 2025, up from 29 percent last year.
Elliott has proven willing to play a longer game before, according to The Wall Street Journal. In 2016, it took a more than 10 percent stake in Arcam after General Electric Co. agreed to buy the Swedish 3-D printing company. GE later raised its bid and lowered its minimum approval threshold to 75 percent.

August 19, 2022