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  • NY AG Files Lawsuit Against 12 Vape Companies

    NY AG Files Lawsuit Against 12 Vape Companies

    New York Attorney General Letitia James announced a lawsuit against 12 e-cigarette manufacturers, distributors, and retailers for “their role in fueling the youth vaping epidemic.” Those named in the lawsuit are Puff Bar, MYLE Vape, Pod Juice, Mi-One Brands, Happy Distro, Demand Vape, EVO Brands, PVG2, Magellan Technology, Midwest Goods, Safa Goods, and Price Point Distributors, as well as Price Point principals Weis Khwaja, Hamza Jalili, and Mohammad Jalili.

    “These companies are responsible for illegally distributing, marketing, and selling flavored disposable vapes, which have become extraordinarily popular among minors,” James said in a statement. “The vaping industry is taking a page out of Big Tobacco’s playbook: they’re making nicotine seem cool, getting kids hooked, and creating a massive public health crisis in the process.”

    In 2020, New York banned the sale of flavored vapor products, however, the products exploded in popularity globally in the past decade and are readily available at numerous outlets. The lawsuit seeks a “disgorgement of all revenues earned as a result of illegal activity” which would translate to hundreds of millions of dollars, as well as a permanent ban on flavored vapes in New York.

    “This punitive approach undermines American entrepreneurship and ignores the public health benefits of vaping as a smoking cessation tool,” Allison Boughner, the vice president of American Vapor Manufacturers, a trade group that represents vape makers and retailers, said in a statement. “This misguided action unfairly targets legitimate American businesses that employ thousands and contribute to local economies. Our members are dedicated to offering adult smokers safer alternatives to combustible cigarettes, supporting a mission of harm reduction backed by science and millions of successful former smokers.”

    Matthew Glauser, the chief strategy officer and a co-founder of Demand Vape, one of the companies named in the lawsuit, said in a statement that the suit was “wasting New York taxpayers’ money and federal court time, which desperately need to be focused on substantive issues that truly impact our communities.”

    According to the New York Times, Tony Abboud, the executive director of another industry group, Vapor Technology Association, disputed the suit’s claim that there was a youth vaping epidemic and called on President Trump “to take bold and decisive action to end the government lawfare against the flavored vaping industry.”

  • PMI Execs Speak at CAGNY

    PMI Execs Speak at CAGNY

    Yesterday, Philip Morris International participated in the Consumer Analyst Group of New York (CAGNY) conference in Orlando, Florida. Chief Executive Officer Jacek Olczak and Chief Financial Officer Emmanuel Babeau spoke about the company’s work toward a smoke-free future, current financial models, and future opportunities.

    (Some quotes were edited for brevity and clarity.) Highlights included:

    Jacek Olczak

    Working toward a smoke-free company

    “We have been quite successful for the first 10 years of the transformations and our quest to become predominantly a smoke-free company. A way to look at what we achieved is [comparing] Marlboro International, which is by far the biggest premium brand in the category. Two years ago in 2023, IQOS for the first time surpassed the revenues of Marlboro and last year exceeded $11 billion. If we take this from that perspective, it took Philip Morris International about 60 or 70 years to get Marlboro to that level, and IQOS, our heat-not-burn brand, has managed to get to that level of performance in roughly 10 years.”

    “What does it mean for us when we set this aspirational target of having two-thirds of our revenue come from smoke-free products by 2030? Obviously, it’s a nice number that looks very nice on a PowerPoint, but the reality is that unless we become a majority smoke-free company, country-by-country, market-by-market, while we operate… the miracle will not happen at the group consolidated level.”

    “There are some countries in the world that despite the science and knowledge and evidence about the new products in terms of the risk profile versus cigarettes, they will not ban cigarettes. But they [essentially] will ban the smoke-free product by allowing cigarettes to continue.”

    ZYN, the company’s acclaimed oral nicotine pouch

    “ZYN in the U.S. is essentially approaching $2 billion in revenues. However, it’s especially exciting for us that ZYN today is the No. 4 nicotine brand as of last quarter, and definitely is the No. 1 smoke-free brand on the U.S. market.”

    Nicotine and the FDA

    “The FDA and others should finally start clarifying what is nicotine. Maybe we don’t wait for FDA clarification. This is what we say about nicotine, and I am not saying what we know, we are just repeating what is known to the public health organizations including the FDA and many other reputable institutions: Nicotine is addictive and, obviously, is not risk-free, but it’s not the primary cause of smoking-related diseases.”

    “Everything else that you find in tobacco smoke is bad, but it’s not the nicotine. Now historically, because we only knew that nicotine can be consumed from cigarettes, nobody had to pay attention to the details or accuracy of the language and whether you call it nicotine or cigarette or smoking, there was not much difference. But over the last 10 years, this has become the fundamental difference.”

    “The most important thing, and I will be repeating this until we succeed, nicotine doesn’t cause cancer. And this is not PMI research. This is research that was done over the last 60 or 70 years when any public authority in the world was looking into cigarettes and the harm caused by cigarettes. And nobody has come up with any conclusion even close that nicotine causes harm and definitively not causes cancer. So that’s the starting point and the industry, and definitely PMI, is going in that direction.”

    “[Nicotine products] have no reason to be given to kids. So we, and Swedish Match, stand very strongly behind responsible sales practices, which go into the product design flavors, et cetera.”

    Future of the industry

    “I think the future will be more complicated, but it will actually create more opportunities. The smokers will not go away. They’re actually looking at these products from the repertoire perspective, because all of these products deliver a different opportunity.”

    “I think the best strategy one can have is to actually keep on with the pace of developing these products and offering them to the consumers without spending too much time [wondering which] one category will win one versus the others.”

    Emmanuel Babeau

    Revenue growth

    “Let me start with a summary of our best-in-class growth and return. The first element is we are a strong growth company in terms of top-line with three drivers. The first one we talk about is growing volumes. If we achieve our objective of growing volume again in 2025, it will be five years in a row of growth in volume. It’s a total change of paradigm for the nicotine industry. Second is price increase, and you have seen over the last two years we’ve been growing and increasing our prices. First on combustible of course, but also on the smoke-free portfolio where we have started to post some nice price increases. Third is the very positive mixed impact that is coming from the growth of our smoke-free portfolio.”

    “What I think is super important is the mix impact and understanding of why the growth on smoke-free products is a very positive element for our growth, both at the top-line level and at the margin progression as well.”

    “Today we are spending a lot of time on AI and what AI can mean for us in terms of notably saving on our back-office cost. We believe that AI is pervasive to the organization. To be clear, AI will have a lot of impact in the way we connect with the consumer and in the way we develop our marketing activity. It’s also going to have a very positive impact on cost, in terms of standardization, in terms of automatization, and we’re going to leverage that.”

    Smoke-free products

    “Look at IQOS versus combustible cigarettes. IQOS reaches $80 per thousand in revenue, which is around 2.2 times higher than the average of our combustible portfolio. Therefore, when we grow IQOS, not only do we come with volume growth, but we accelerate the revenue growth with this positive mix effect on revenue. The level of gross profit is $54 per thousand. This is around 2.4 times higher than a combustible cigarette.”

    “Maybe the most spectacular impact in terms of positive contribution is the U.S. ZYN number. The revenue per thousand is about 6 times the average of our cigarette business. And at this level, the gross profit is $185, which is about 8 times the profit that we make on average for our combustible business.”

    “So obviously, when we grow IQOS and ZYN, we are growing very nicely in volume, remember close to 14% growth in volume for our smoke-free portfolio in 2024.”

    For more than 50 years, CAGNY has been connecting investors, management teams, and the media dedicated to the consumer industry. It asserts to be “the largest not-for-profit of its kind” and hosts various events throughout the year, highlighted by the CAGNY conference in Boca Raton, Florida.

  • Kingsmakers Partners with Carmelo Anthony

    Kingsmakers Partners with Carmelo Anthony

    Kingmakers Cigars announced the upcoming release of Versa, a premium cigar said to embody passion, excellence, and resilience. In its latest celebrity collaboration, the company is partnering with 10-time NBA All-Star Carmelo Anthony as the face of it.

    The name comes from the Latin word Versatilis, which stands for adaptability and strength. The cigar has a “complex yet smooth flavor profile that caters to both seasoned aficionados and newcomers.”

    According to Kingmakers, “the blend is comprised of a Habano 2000 wrapper, a Sumatra binder, and filler tobacco from Nicaragua and Pennsylvania. This medium-to-full-bodied smoke starts with notes of black pepper and spicy chili before transitioning to creamy undertones and nut and espresso notes. The cigar finishes with notes of dark chocolate, molasses, roasted almonds, and deep, leathery, and earthy notes. The finish also has subtle hints of dried fruits and black coffee, making for a memorable smoking experience.”

    Versa will be available March 31, 2025, and is currently available for pre-sale.

  • Belgium Finds Violations in 80% of Shisha Bars

    Belgium Finds Violations in 80% of Shisha Bars

    Belgium’s  Ministry of Public Health announced yesterday that more than 80% of the nation’s shisha bars were found to have violations. Of the 131 shisha bars inspected, 106 violated the smoking ban regulation and 107 offered non-compliant tobacco products, according to L’Avenir.

    Smoking tobacco is allowed in shisha bars, but only outside or in designated smoking rooms with a smoke extraction system and restricted space, as mandated by the tobacco regulations. Non-compliant smoking rooms along with the sale of non-compliant tobacco products were reported to be the two main issues found, followed by improper tobacco labeling and illegal tobacco advertising.

  • U.K. Investigating Vaping Effects on Children

    U.K. Investigating Vaping Effects on Children

    Today, Britain’s government announced the launch of a decade-long study that will investigate the long-term effects of vaping on children as young as 8. The government has been cracking down on the rapid rise of vaping among children, with estimates showing a quarter of 11- to 15-year-olds have tried it.

    “The long-term health impacts of youth vaping are not fully known, and this comprehensive approach will provide the most detailed picture yet,” the health department said.

    The £62 million ($78.1 million) study will track 100,000 people aged 8-18 years for 10 years, collecting data on behavior and biology as well as health records, the statement said. The World Health Organization has urged governments to treat e-cigarettes similarly to tobacco, warning of their health impact and potential to drive nicotine addiction among non-smokers, especially children and young people.

  • Ferio Tego Available in Canada

    Ferio Tego Available in Canada

    Ferio Tego announced that its products will now be available in Canada, partnering with Kretek International Canada for distribution.    

    “We have enjoyed working closely with the outstanding team at Kretek Canada,” said Brendon Scott, co-owner of Ferio Tego. “Canada has a robust premium cigar market with tremendous retailers and passionate consumers, and we’re excited to offer our brands in this market.”

    The initial launch will feature its Elegancia, Summa, Timeless Sterling, and Timeless Prestige lines, all manufactured in the Dominican Republic. Additional company offerings from Nicaragua and Honduras will be available later in 2025.

    “The complexity, style, and origins of our blends make them quite distinctive,” said Michael Herklots, co-owner of Ferio Tego. “Our neighbors in the north have sought out our blends over the years, so we’re pleased to finally deliver them to their local tobacconists with the help of Kretek Canada.”   

    This is the third international expansion for the company over the last two years following successful releases in Asia and the United Arab Emirates.

  • Study: Youth More Vulnerable to Nicotine Addiction

    Study: Youth More Vulnerable to Nicotine Addiction

    People in their late teens and early 20s may be more susceptible to nicotine addiction than middle-aged adults, according to a new study in mice from researchers in the Penn State Department of Biobehavioral Health. The results provide evidence that the effects of drugs on the body—both medication and misused substances—change over the lifespan in ways that clinicians and researchers need to consider when developing and prescribing treatments, the researchers said.

    Doctoral student Carlos Novoa and his adviser, Thomas Gould, Jean Phillips Shibley Professor of Biobehavioral Health and head of the department, led the study. The researchers demonstrated that nicotine lowers the body temperature of young adult mice more quickly and reduces their movement more significantly than middle-aged mice. These results indicate how the effects of nicotine change as people age, according to the research team.

    “Sometimes, people think of development as something that occurs until we reach a certain age—like 18 or 25—and then stops,” Gould said. “But people continue to develop and change across their entire lifespan, and this affects how our bodies respond to medications and other chemicals, including nicotine. This research adds one piece to the puzzle of all the factors—age, biological sex, genetics, and many others—needed to create effective medical treatments and policies for all people.”

    The results of the study appear in Behavioral Pharmacology.

  • Washington’s Proposed Flavored Product Ban Takes Hit 

    Washington’s Proposed Flavored Product Ban Takes Hit 

    The Washington State House Committee on Consumer Protection & Business narrowly advanced House Bill 1203 by an 8-7 vote yesterday (Feb. 18), setting the stage for further legislative debate on a proposal to ban flavored tobacco, nicotine, and vapor products statewide.

    If passed, the bill would prohibit the sale, display, and advertisement of flavored tobacco, nicotine, and vapor products, including those marketed with terms like “cool,” “chill,” “ice,” or “fresh.” The bill also targets so-called “entertainment vapor products,” which include vape devices with interactive features such as music or video display capabilities. It also mandates a statewide public awareness campaign, led by the Department of Health, to educate the public on the risks of flavored nicotine products. Retailers would be required to post clear signage notifying customers of the ban, and violators would face stiff penalties enforced by the Liquor and Cannabis Board.

    While the bill moved forward, the debate in committee reflected deep divisions over the proposal, and even its main sponsor, Rep. Kristine Reeves, admitted the bill needs more work. Rep. Chris Corry voiced strong opposition, arguing that adults should have the right to make their own choices.

    “I think that this bill, while I understand the underlying merits…it’s a little paternalistic for us to say which products they can and can’t have,” Corry said. He also warned of unintended consequences, citing examples from other states where similar bans have fueled underground markets.

    The bill now moves to the House Ways and Means Committee for further consideration but is not expected to pass this year.

  • Altria CEO Talks Markets, FDA

    Altria CEO Talks Markets, FDA

    Altria Group, Inc., today (Feb. 19) participated in the Consumer Analyst Group of New York (CAGNY) conference in Orlando, Florida. Billy Gifford, Altria’s Chief Executive Officer, and Sal Mancuso, Altria’s Executive Vice President and Chief Financial Officer, presented and discussed, among many topics, how the company’s traditional tobacco business supports future strategies, long-term growth aspirations, and the general state of the industry.

    Gifford offered the following thoughts:

    On the evolution of the U.S. nicotine market:

    “The potential for tobacco harm reduction in the U.S. is significant, and we believe the opportunity remains in its early stages. Of the nearly 55 million nicotine consumers in the U.S., we estimate that only a third exclusively use a smoke-free format today. However, consumers are transitioning to smoke-free alternatives at a faster pace than ever before.”  

    “Nicotine consumer preferences are rapidly changing. Today’s nicotine consumers want smoke-free products that offer the potential of reduced harm and social friction, and are available in a variety of flavors. In fact, with more products in the market, coming closer to meeting those needs, nicotine volumes increased for the second consecutive year in 2024. And grew by a compounded annual growth rate of about 2% over the past 5 years.”

    “Smoke-free volume growth is now more than offsetting cigarette industry volume decline, demonstrating that consumers are seeking alternatives to cigarettes rather than leaving the nicotine space entirely. The growing adoption of smoke-free products is encouraging and directly aligned with our vision and the growth aspirations of our smoke-free businesses.”

    “Research supports that no single product format or flavor will satisfy all nicotine consumers. To advance harm reduction our strategy is to deliver a portfolio of products across today’s most promising innovative smoke-free platforms: oral nicotine pouches, heated tobacco, and e-vapor.”  

    The oral nicotine market:

    “The oral tobacco category continues to grow, led by nicotine pouches. We estimate that industry volume grew 8.5% last year and included nearly 8 million consumers. In the last 3 years, nicotine pouch consumers have more than tripled and now comprise 3.5 million of those 8 million consumers.”

    “Since 2019, the oral tobacco products segment saw an increase of 2.4% CAGR.”

    Altria’s oral nicotine pouch, On!

    “We’re encouraged by On!’s ability to retain loyal purchasers and expand the consumer base at a higher retail price. Consumer loyalty for On! continues to build. At the end of last year, 800,000 consumers regularly purchased On!, an increase of more than 40% versus the prior year.”

    Smokers switching from combustibles:

    “We believe the science is compelling. Evidence from a large consumer-use study among adult smokers not planning to quit showed that nearly 75% of those who used Ploom had meaningful reductions in cigarette consumption, with nearly one-third completely switching from cigarettes.  

    “We observed that menthol-flavored sticks had a higher switch rate relative to tobacco-flavored sticks. Consumers who switched from combustible to Ploom significantly reduced their exposure to harmful chemicals. Given the low risk of underage use and the strong benefits of switching for adults, we believe Ploom presents a compelling case for authorization by the FDA and we remain optimistic about its potential in the U.S.”

    E-vapor:

    “Our data show consumers transition from cigarettes to e-vapor at over three times the rate of transition from other smoke-free categories. This is an encouraging sign and consistent with our belief that most smokers are looking for satisfying, inhalable alternatives to cigarettes.”

    “Today’s vapors are seeking products that are flavored, come in a convenient form, and offer high-value for a reasonable price.”

    The illicit market:

    “In the absence of FDA authorization of flavored product choices, consumers have turned to the illicit flavors disposable market. We estimate that the e-vapor category grew by about 30% in 2024, driven entirely by illicit products that now represent more than 50% of the category. As we’ve said repeatedly, illicit product growth is concerning. It’s the primary source of underage usage, and with no control of how products are marketed or sold, it is attracting unintended audiences to the nicotine category. In fact, 40% of new entrants to the category in 2024 we not prior smokers. At the same time, the category’s growth is proof that a smoke-free future is possible. Most consumers and society expect a marketplace consisting of an array of FDA-authorized products led by responsible players throughout the value chain. We need a regulatory system that fosters innovation, not one that stifles and slows innovation to the advantage of the illicit market.”

    Altria’s Vision program:

    Achieving our Vision requires four critical elements:

    1. Underage tobacco use continues to decline or remain low
    2. Consumers require accurate information about nicotine
    3. The entire industry operating within a fully enforced, science-based regulatory environment
    4. A variety of satisfying, FDA-authorized products available for adult consumers

    FDA regulation and reported staffing cuts:

    “We need more authorization. The adult cigarette consumer, about half are ready to move to smoke-free if they can find a product that they enjoy and find satisfying. Only 2% of the products have authorization.”

    “We have a good working relationship with the FDA, but as you know they’ve been slow. We hope with a reduction in headcount they will look at their process and make them more efficient. As you see in e-vapor, the consumer is looking for products. They want to go to smoke-free alternatives and we think that’s important for harm reduction to succeed in the U.S. We need more authorizations and at the same time, we need enforcement.”

    “It may slow it down temporarily but at the same time, we would hope the increased efficiency and processes would improve.”

    Click here to view the entire presentation.

    For more than 50 years, CAGNY has been connecting investors, management teams, and the media dedicated to the consumer industry. It asserts to be “the largest not-for-profit of its kind” and hosts various events throughout the year, highlighted by the CAGNY conference in Boca Raton, Florida.

  • Trump Administration’s Cuts Reach FDA Tobacco Product Employees

    Trump Administration’s Cuts Reach FDA Tobacco Product Employees

    The Trump administration’s attempts to reduce the size of the federal workforce have reportedly extended to the Food and Drug Administration (FDA) this weekend, as recently hired employees who review the safety of food ingredients, medical devices, and other products were fired.

    On Friday, the U.S. Department of Health and Human Services announced plans to fire 5,200 probationary employees across its agencies, which include the FDA, National Institutes of Health, and the Centers for Disease Control and Prevention. Probationary employees across the FDA received notices Saturday evening that their jobs were being eliminated, according to three FDA staffers who spoke to The Associated Press on condition of anonymity.

    The total number of positions eliminated is still not clear, but the firings appeared to focus on employees in the agency’s centers for food, medical devices, and tobacco products — which includes oversight of electronic cigarettes.

    The FDA employs nearly 20,000 people but has been strained since a wave of departures during the COVID-19 pandemic, with a reported 2,000 uninspected drug facilities that haven’t been visited since before the pandemic. It has also been criticized for not moving faster to catch recent problems involving infant formula, baby food, and eyedrops. A former FDA official said cutting recent hires could backfire by eliminating staffers who tend to be younger and have more up-to-date technical skills, whereas the FDA’s current workforce skews toward older workers who have spent one or two decades at the agency.

    “You want to bring in new blood,” said Peter Pitts, a former FDA associate commissioner under President George W. Bush. “You want people with new ideas, greater enthusiasm, and the latest thinking in terms of technology.”