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FDA Webinar on Pending Product Standards

Photo: Postmodern Studio

The U.S. Food and Drug Administration’s Center for Tobacco Products (CTP) will hold a live webinar, titled “FDA’s Rulemaking Process and Upcoming Tobacco Product Standards,” on Feb. 10 from 2 p.m. to 3 p.m. Eastern Time.
The webinar will address the FDA’s planned tobacco product standards to prohibit menthol as a characterizing flavor in cigarettes and to prohibit characterizing nontobacco flavors in cigars; the FDA’s rulemaking process and how stakeholders can submit comments on proposed rules; and available cessation resources and tools.
The webinar will feature a presentation from the FDA’s Office of Minority Health and Health Equity, the CTP’s Office of Health Communication and Education, and the CTP’s Office of Regulations. There will also be a question-and-answer session.
The FDA will respond only to questions submitted by Feb. 4. To submit a question, please register for the webinar and complete the appropriate field on the registration form.
The FDA stresses this webinar is not intended to communicate contents of the proposed rules or details about the timeline for their release.
The webinar is live and free of charge, but prior registration is required by Feb. 9.

February 1, 2022
Israel: Knesset Finalizes Vapor Tax

Photo: Spiroview Inc.

The finance committee of Israel’s Knesset has approved a slightly modified version of the tax on vaping hardware and e-liquid that was imposed last November, reports Vaping360.
Although the committee reportedly eliminated a separate tax on disposable products, Israel will still have the highest vape tax in the world. Effective immediately, all vaping products will be subject to a tax equaling 270 percent of the wholesale cost, plus NIS15.6 ($4.94) per milliliter of e-liquid.
Both the finance and health ministries aimed to tax vaping products at the same rate as cigarettes. Maintaining that vaping is just as dangerous as smoking, the health ministry initially sought an even higher tax. According to Israel Hayom, Finance Committee Chairman Alex Kushnir “reduced the conversion formula by 30 percent compared to what the Ministry of Health wanted.”

February 1, 2022
Superior Solution
FEELM CEO Frank Han

Using a new ultra-slim bionic film ceramic coil, the FEELM Air represent a considerable improvement over previous closed-system devices.
By Timothy S. Donahue
The vaping industry won’t reach its full potential until its products can deliver nicotine to the body as effectively as a combustible cigarette. The new FEELM Air fully integrated vaping solution brings the industry one step closer to that goal. The FEELM Air offers several improvements on previous closed system vaping devices, including the next generation of FEELM’s industry-leading ceramic coils.
FEELM Air brings together three new innovations for its ultra-slim bionic film (USBF) ceramic coil, calling the new coil the world’s thinnest ceramic coil vape pod solution. During a launch event in London on Jan. 18, representatives of FEELM and the flagship atomization technology brand’s parent, Smoore International, detailed several of FEELM Air’s technological breakthroughs in the vaping experience, including ultimate design, reliability, flavor and an exceptional interactive experience.
There are three major improvements to FEELM’s latest coil technology that are the cumulative achievements of a team of 500 scientists and nearly seven years of research, according to FEELM. “FEELM Air is the outcome of cross-disciplinary research and a revolution to [the] ceramic coil,” said Frank Han, president of FEELM, at the opening remark of the launch event. “It replaces the single-layer film with a seven-layer bionic ultra-slim film. The thickness of the film is reduced from 80 micrometers to 2 micrometers, which is 40 times thinner than the last generation.”

The overall improvements of FEELM Air are attributed to a new generation of USBF ceramic coils, which incorporate a seven-layer composite heating film made of bionic material for the first time in the vaping industry. FEELM representatives said that each layer leads to an equally enhanced functionality.
The second innovation in the USBF coil is its use of a nanoscale vacuumed film-forming technique to help the heating film distribute heat more evenly across the coil for accurate temperature distribution. The final innovation is a microporous bionic structure that provides smooth ventilation as well as a strong e-liquid locking layer to prevent any leakage.
Additional improvements to FEELM’s USBF coil allow the overall FEELM Air to bring major breakthroughs to the vaping experience, including an integrated micro-electromechanical system (MEMS), the industry’s highest level of energy efficiency and its smallest linear motor, according to FEELM.
“It has the world’s first seven-layer composite heating film made of bionic material. Most of the existing ceramic coils are single layered, and now we have a seven-layered composite heating film,” a FEELM representative explained. “It can improve the harm reduction and improve the energy efficiencies, and each layer will lead to a corresponding functionality improvement.”
FEELM Air improves the overall harm reduction performance by 80 percent of previous generation ceramic coils. The numerous major breakthroughs the new device provides include:
The hybrid composites heating layer and the nanoscale protection layer provide corrosion resistance, thereby reducing the emission of heavy metals by 78.6 percent. The temperature control layer with its thermal conductivity can reduce the emission of aldehydes and ketones by 80.7 percent due to localized overheating.
In terms of energy optimization, FEELM Air boasts the world’s highest energy efficiency of 1.3 mg/W by virtue of three layers of composite materials. The nano silver electro layer can reduce invalid energy consumption while the porous thermal resistance layer can effectively reduce heat loss.
The patented microporous flavor lock layer improves average flavor release by 33 percent. It’s terraced temperature zone and multilayered atomization allow for a tailored flavor release in different temperature zones and produces aerosols in smaller particle size for consumers to taste the flavor thoroughly and allow for a lower lung absorption than previous generation coils.
FEELM Air also uses a second generation of the company’s “puzzle leak-proof” technology that decreases leakage rates by 237 percent. It introduces an upgraded capillary structure and an innovative choke valve to prevent condensation alongside a superabsorbent lock layer that can effectively prevent e-liquid splashing.
The innovative FEELM Air also uses the world’s smallest linear motor, which offers a unique shock-wave mode that allows users to include delicate vibrations that allow consumers to feel the resonance in every puff. The power consumption of vibrations per charge is as low as 0.06 percent (equal to two puffs).
The FEELM Air also has the industry’s first superpower management system, TOPOWER, which allows for eight hours of vaping with only a 10 minute charge. The energy density is increased by 20 percent, and the battery life is increased by 30 percent over previous generations, according to FEELM. The device also adopts an integrated MEMS, which functions as a reliable airflow switch, to improve the sensitivity of the device while preventing mis-activation.
“Ever since the launch of the world’s first black ceramic atomization coil with metallic film in 2016, FEELM has changed the whole competitive landscape, ushering in a new era of ceramic coil. It has largely enhanced harm reduction with accurate heating temperature control and revolutionized vaping experience with smooth and pure taste till the last puff,” said Han. “More importantly, FEELM has effectively addressed the industry’s pain points of leakage and dry hits.”
To keep up with the enhanced vaping experience the FEELM Air provides vapers, the company announced the launch of its second generation of the FEELM taste evaluation model during the FEELM Air launch event. To better understand taste experiences while vaping, FEELM introduced its first taste evaluation model in December 2020 that gave FEELM researchers the ability to describe the taste of atomization scientifically. Composed of four dimensions—flavor, strength, note and vapor—and 51 specific indexes, the model establishes a system to evaluate the human senses of mouth, tongue, nose and throat.
“Now, it’s five dimensions and 65 indexes. It’s more complicated in evaluating aroma, aftertaste, taste/mouthfeel, impact and vapor property. We built up an in-house sensory evaluation team. We have experts with certain backgrounds in tobacco science and vaping taste evaluations,” a FEELM representative said. “The team’s experience in the science of evaluating flavors ranges from five years to 13 years. They are the experts in evaluating vape ingredients.”

During the event, Han also announced a brand refresh for FEELM. The new brand concept is composed of five words: feel, engine, exploration, lifestyle and memory, echoing the five letters of the brand’s name. He has also unveiled the new logo, which has the contour of a ceramic coil in the shape of a window. It symbolizes “FEELM’s ‘window to ultimate sensation,’” said Han. “The ‘open window’ stands for the infinite pursuit of a better sensory experience, representing FEELM’s commitment to ultimate sensation.”
The FEELM Air may be the bridging device that brings vaping magnitudes closer to the nicotine delivery and sensory experience combustible cigarette smoking offers, only in a format that Public Health England has said is 95 percent safer. It’s too early to tell, but the FEELM Air may motivate an even greater number of cigarette smokers to switch to vaping than previous devices.
“Vaping devices loaded with FEELM atomizers have been exported to over 50 countries in Europe, America, East Asia, Africa and Oceania with an accumulated sales volume of over 3 billion pieces,” Han said. “FEELM has never stopped the constant exploration for ultimate sensation. By virtue of FEELM Air, equipped with the ultra-slim bionic film ceramic coil, FEELM is ready to drive another paradigm shift in the global vaping industry, leading the second sensory revolution of ultra-slim devices and ceramic coils.”

Timothy Donahue is the assistant editor of Tobacco Reporter. Since joining our team in January 2013, he has become not only an expert on the traditional tobacco business but also a well-respected voice in the rapidly developing vapor industry. Tim spends much of his time on the road, attending conferences and interviewing industry representatives. His networking skills, work ethic and quick mind are valuable assets to our diverse audience.
February 1, 2022
The Evil Twins

Photo: Taco Tuinstra

Prohibition and illicit trade
By Clive Bates
The remote Himalayan Kingdom of Bhutan was the poster child of tobacco control for many years. It appeared that Bhutan had drawn the obvious conclusion from decades of scientific research and had finally done the right thing. In 2004, the kingdom banned the sale of all tobacco products. Tobacco control activists were delighted.
Jump forward to 2020, and the picture is not so rosy. In a joint report by the government and the World Health Organization office in Bhutan, “The Big Ban: Bhutan’s Journey Toward a Tobacco-Free Society,” Health Minister Dechen Wangmo, sets out the situation: “The black market, one that emerged after the ban, is the number one challenge that Bhutan is faced with when it comes to tobacco control. The Global Youth Survey 2013 reports an increase in the number of school children between ages 13 and 15 using tobacco products. It increased from 24 percent in 2006 to 30 percent in 2013.”
According to the WHO, Bhutan has high levels of ongoing tobacco use despite prohibition. The WHO representative to Bhutan, Rui Paulo de Jesus, provides a candid explanation: “So long as the demand within the country persists, it will continue to fuel the illicit market that has expanded since the ban of its sale in early 2000. Unfortunately, as studies indicate, Bhutanese youth are at the center of this growing illegal trade in tobacco and its products.”

Prohibition as a Perturbation
Unusually for the WHO, the words above contain some essential truths about tobacco policy and prohibitions. The first and most important insight is that while demand for a product persists, a prohibition will just change how the product is supplied. A prohibition does not make a product disappear, even if that’s what politicians and policymakers would like. Instead, a prohibition is a perturbation of a dynamic market: a disruption that reconfigures the behavior of suppliers and consumers, changing who supplies the product, what products are available and under what terms. Prices can go up to reflect the costs and risk of illicit supply. Alternatively, prices can fall as no tax is paid on illicit goods. Illicit commerce is unregulated and ultimately controlled by violence rather than by consumer protection or contract law. An unregulated illegal market creates real dangers to consumers. The 2019 outbreak of severe and often fatal lung disease was caused by adding a harmful additive, vitamin E acetate, to illicit cannabis (THC) vapes as a cutting agent. Arguably, this disaster would never have happened had cannabis vaping products been widely available legally and without excessive taxation.

Participation in Criminal Supply Chains
The second insight is that young people may see the opportunity to make fast money as foot soldiers in an illicit irregular supply chain. It should be a significant consideration in assessing the case for prohibitions supposedly aimed at “protecting kids.” If adolescents want access to the banned products, then a prohibition policy will likely draw young people into the illicit supply chain and an early experience of criminality. Alternatively, the illegal supply of, say, cannabis could diversify to provide prohibited nicotine products as well. For example, in the United States, the Monitoring the Future survey shows that past 30-day cannabis use among 12th grade students has been around 20 percent for the last 25 years. That means there is a ready-made illicit supply chain for providing tobacco or vaping products to young people, should that prove attractive to cannabis suppliers.

Types of Prohibition
Not all prohibitions are as pervasive and straightforward as Bhutan’s. Let’s consider two further categories. First, many tobacco and nicotine policies have a partial prohibition element. By this, I mean the policies are intended to deter the use of the product rather than to protect the user. For example, a ban on flavored e-liquids has a prohibitionist purpose, but a ban on a toxic ingredient in e-liquids has a consumer protection purpose—an important distinction. Caps on nicotine strength or requiring a prescription to access vaping products are partial prohibitions. In On Liberty, John Stuart Mill famously equated taxes on stimulants to prohibition: “To tax stimulants for the sole purpose of making them more difficult to be obtained is a measure differing only in degree from their entire prohibition and would be justifiable only if that were justifiable.”
The United States and New Zealand have proposals to reduce nicotine in cigarettes to a minimal “subaddictive” level. This is essentially a prohibition of cigarettes dressed up as a sophisticated regulatory intervention. Without adequate nicotine, cigarettes are worthless for most users, and they might as well be prohibited. The practical question is what would happen next: Would users quit altogether, move to illicit cigarettes or, for example, switch to vaping? The least likely outcome is any significant or sustained use of low-nicotine cigarettes.
Second, a particular category needs to be defined for the prohibition of products that are beneficial to the user. The snus ban in the European Union has persisted since 1992 despite a mountain of evidence that snus has had a radically positive impact on public health in Sweden and Norway, where it is widely available. There may be arguments for prohibiting harmful products like cigarettes, even if there are doubts about the practicalities, perverse consequences and ethical implications for adult autonomy. But how can anyone defend the prohibition of much safer products that function as alternatives to cigarettes? Yet, there is now a lavishly funded international campaign to do exactly that. The international respiratory health organization The Union is calling for vaping and heated-tobacco products to be banned in all low-income and middle-income countries. That would cover 80 percent of the world’s smokers. This crazy logic is equivalent to campaigners against sexually transmitted diseases pressing for the prohibition of condoms in the hope that it would deter sex by making it more dangerous.

More Enforcement?
Although the WHO’s representative in Bhutan concisely described the problem, he still followed the eternal prohibitionist playbook and called for more enforcement effort. “WHO shares the country’s concerns, and it appears timely that Bhutan embraces the Protocol to Eliminate Illicit Trade in Tobacco Products the country is yet to ratify.”
But this idea, embracing hi-tech track-and-trace technology, seems implausible in the environment of a developing country and an informal economy in tobacco products. Further, more enforcement muscle brings problems of its own. It is expensive, violent and prone to bribery, corruption and abuse of office. Drug prohibition in the United States is notoriously associated with racism. As the Drug Policy Alliance puts it, “People of color experience discrimination at every stage of the criminal legal system.”

Prohibition by Trial and Error
Perhaps the big policy questions cannot be answered until a prohibition has been tried and experience gained? Beware! The danger is that temporary prohibitions may have irreversible effects. Prohibitionists should turn to the 2020 experience in South Africa in which the government banned tobacco sales with a justification based on a Covid-19 response. Research by independent economists at the University of Cape Town concluded that the legal supply had been replaced by illicit supply with a substantial loss of tax revenue. But now that tobacco users have found illegal suppliers to evade prohibition, what is to stop them from continuing to avoid tobacco taxation?

Responsibility and Accountability
One characteristic of prohibition advocates is a reluctance to assess the consequences of their work. The prohibition policy is their real goal, but the real-world consequences are of lesser concern. For example, the UN Office on Drugs and Crime has dogmatically resisted calls to conduct a thorough assessment of the benefits and detriments of the drug prohibition treaties it oversees. This mindset is already evident in the tobacco and nicotine field. In 2019, India’s federal government imposed a comprehensive ban on vaping products. In 2021, the WHO awarded India’s former health minister, Harsh Vardhan, its highest tobacco control medal “for spearheading the government of India’s legislation to ban e-cigarettes and heated-tobacco products”. However, this award was made without any evaluation of the impact of the prohibition on illicit trade, no consideration of the likely perverse consequences leading to more smoking or any reflection on the ethics of denying India’s 100 million smokers lawful access to much safer alternatives.
Proposals for prohibitions, in all their forms, need a much stricter assessment of the likelihood of illicit trade, perverse but easily foreseeable consequences and the ethics of using the force of law to control individual risk behaviors. That has been a conspicuous failure with illicit drugs and alcohol. Let’s hope that policymakers learn those lessons and don’t repeat the mistakes with nicotine.
Finally, a postscript. Following a temporary lifting of Bhutan’s tobacco ban in 2020 for Covid-19-related reasons, Bhutan’s National Assembly passed the Tobacco Control (Amendment) Bill 2021 and Tax Bill of Bhutan 2021. This lifts the ban and legalizes the selling, buying, possession, distribution and transportation of tobacco and tobacco products. The signature prohibition of tobacco control has officially failed.

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

February 1, 2022
Appropriate for the Protection of Health?

Photo: 22nd Century Group

The FDA’s focus on nicotine is coming at the expense of true harm reduction.
Cheryl K. Olson
I was gobsmacked last December when the U.S. Food and Drug Administration issued modified-risk tobacco product (MRTP) authorizations for two reduced-nicotine combustible cigarettes, 22nd Century Group’s VLN King and VLN Menthol King. Both contain non-GMO tobacco that’s very low in nicotine (VLN). If 22nd Century Group can reduce the disastrous health effects of smoking by offering low-nicotine combustible cigarettes, that’s great. What took me aback was the implicit message from the FDA on its priorities.
VLN products such as these were supposed to be part of a smoking harm reduction landscape—one that includes approaches proven to reduce the risks of illness and death among cigarette smokers, such as vaping, heat-not-burn and smokeless tobacco. But this ideal, data-driven society in which addicted smokers bob gently down the famous continuum of risk via the path they prefer (perhaps starting with VLN cigarettes, perhaps with another product and ultimately landing at their low-risk nicotine maintenance or tobacco-free destiny) isn’t where we’re living.
Such a Candide-like world would feature a rainbow of reduced-risk products that match the needs of individual smokers and smokers and people who influence them (such as doctors) fully aware of these products and of how and why they’re lower risk. They’d also know that traditional approaches to quitting (hello, “cold turkey” and nicotine-replacement therapy) have proved depressingly ineffective, especially among heavily addicted, low-income, longtime smokers: the folks who need our help the most.
The FDA claimed to envision such an environment when Scott Gottlieb, then the agency’s commissioner, stated in 2017 that “Nicotine lives at the core of both the problem and, ultimately, the solution to the question of addiction and the harm caused by combustible forms of tobacco. … So, how can we take a new and comprehensive approach to nicotine?”
Gottlieb continued, “Armed with the recognition of the risk continuum, and the reality that all roads lead back to cigarettes as the primary cause of the current problem, we need to envision a world where cigarettes lose their addictive potential through reduced nicotine levels. And a world where less harmful alternative forms, efficiently delivering satisfying levels of nicotine, are available for those adults who need or want them.”
Instead, the FDA prioritized very low-nicotine cigarettes and dropped the ball on that last, essential part: the “less harmful alternative forms.” Those products, despite considerable and growing scientific evidence of their real-world effectiveness, have been left in limbo.

A Passing Grade on the Wrong Test
What exactly happened? An MRTP is simply a request to the FDA that a tobacco-related company be allowed to make some specified changes in how it describes a product or set of products to the general public through its packaging, marketing, advertising and other forms of promotion and communication.
In this case, 22nd Century Group wanted to state that each of its products contains “95 percent less nicotine,” “helps reduce your nicotine consumption” and “VLN smells, burns and tastes like a conventional cigarette but greatly reduces your nicotine consumption.” They provided the scientific evidence to back up those claims.
Among the hurdles for a successful MRTP authorization is that the manufacturer demonstrates that the product is “appropriate for the protection of the public health,” or APPH. In other words, that the requested modifications do or have the potential to do more good than harm if approved. That’s a core question that needs to be addressed in any tobacco-related application or authorization request to the FDA.
The Tobacco Control Act of 2009 begins with the words, “To protect the public health ….” That shows the clear focus and intent of the legislation. While the phrase “appropriate for the protection of the public health” appears several times in the act, it’s frustratingly vague and subject to interpretation.
What’s clear, however, is that the FDA should prioritize those aspects of smoking that are the most harmful to individual and public health. While reducing nicotine intake is appropriate for the protection of the public health, it should be nowhere near the top of the list.

It’s Not the Nicotine That Kills
Morbidity and mortality among smokers, including cancers and heart disease, are caused by the “tars” and other byproducts of combustion—what researchers often call harmful and potentially harmful constituents (HPHC). Because it’s addictive, nicotine is also considered an HPHC. As Michael Russell famously put it, “People smoke for the nicotine, but they die from the tar.”¹
In its February 2020 presentation on its products to an FDA Tobacco Products Scientific Advisory Committee panel, 22nd Century Group clearly states, “VLN cigarettes yield essentially the same HPHCs as conventional cigarettes. The benefits of VLN accrue from reduced cigarettes per day and reduced abuse liability.” That’s consistent with their authorization request since they’re only claiming a reduction in the amount of nicotine.
Think about that for a moment. The premise that reduced nicotine in combustible cigarettes will reduce harm is based on an assumption that the number of cigarettes smoked will decrease. That’s because the other HPHCs—the substances that lead to illness and death—are the same in the very low-nicotine and the regular cigarettes. Will they?

Compensatory Smoking
Maybe. Maybe not. It’s an empirical question that requires research with these specific products. Researchers studying smokers who switched to earlier generations of low tar and low nicotine cigarettes, known as low-yield cigarettes, found that many engaged in what’s known as compensatory smoking.
According to the Centers for Disease Control, “Most people who smoke are addicted to nicotine. They may compensate when smoking low-yield cigarettes in order to take in more nicotine.”⁵
A historical review of tobacco industry approaches to marketing low-yield cigarettes concluded, “Unfortunately for the industry, smokers did not care much for the taste of reduced tar cigarettes and, as expected, the lower nicotine levels became a problem as well. Smokers were not receiving the same nicotine ‘satisfaction’ and therefore began to compensate for the reduction in nicotine by smoking more cigarettes, thus increasing their health risk.”²
These earlier studies were conducted on combustible cigarettes with significantly higher levels of nicotine than the VLN products. Some well-respected smoking harm reduction experts such as Clive Bates theorize that the nicotine levels in this generation of cigarettes is so low that compensatory smoking will not be a problem. But how, then, is this different from the low success cold turkey approach? Also, what about dual use? There is nothing to prevent a smoker from using both types of products.

What’s the Real Harm?
But this distracts from the fundamental problem. The FDA’s focus is on the wrong chemical: nicotine. It’s often the first or only chemical most people can name when describing tobacco. That’s one of the reasons why the addictive quality of nicotine is so often conflated with combustible tobacco’s relationship with heart disease and cancer.
Several studies of physicians’ knowledge about the clinical effects of nicotine find misperceptions are frustratingly common. Roughly four out of five doctors surveyed incorrectly linked nicotine to cardiovascular disease (83.2 percent), chronic obstructive pulmonary disease (80.9 percent) and cancer (80.5 percent).⁹ They should know better.
This distortion of the role of nicotine among smokers, and some of the people who counsel them when they try to quit or at least reduce their medical risk, can interfere with their motivation to use some of the proven pathways away from combusted tobacco.
This focus on nicotine reduction and the misunderstanding of its risks may be precluding addicted smokers from switching to products that significantly reduce harm. According to Public Health England, “One assessment of the published data on emissions from cigarettes and e-cigarettes calculated the lifetime cancer risks. It concluded that the cancer potencies of e-cigarettes were largely under 0.5 percent of the risk of smoking. Comparative risks of cardiovascular disease and lung disease have not been quantified but are likely to be also substantially below the risks of smoking. Among e-cigarette users, two studies of biomarker data for acrolein, a potent respiratory irritant, found levels consistent with nonsmoking levels.”
My frustration is that the FDA, through its priorities and recent actions, is inadvertently reinforcing misinformation that interferes with the goal of protecting the public health by focusing on nicotine reduction at the expense of true harm reduction.
Last year, I interviewed former industry scientist Justine Shaw Jackson for another Tobacco Reporter column; she spoke of the need to give people nicotine “without all the nasties in the smoke.” That phrase stuck in my head, creating a mashup of her words and Russell’s insight: “It’s not the nicotine that kills—it’s the nasties in the smoke.” Let’s embroider that phrase on pillows and send one to every doctor and nurse in the world.

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

February 1, 2022
State of Euphoria

Photos courtesy of Demecan and the German Cannabis Association

Germany’s new government plans to legalize cannabis.
By Stefanie Rossel
With Germany’s new government, a coalition of the center-left Social Democrats, the Green party and the liberal Free Democrats, taking office on Dec. 6, 2021, a long-awaited change moved closer to becoming reality. The country, the parties announced in their coalition agreement, will legalize the sale of cannabis to adults—that is, consumers from the age of 18—for recreational purposes. Although no details were mentioned and no timetable was set, the announcement sent cannabis stocks to new heights.
The Financial Times described the announcement as “game-changing precedent for the global business of growing and selling marijuana” that would be closely watched by other countries. With its proposal, Germany would join a movement of cannabis reform around the world. Canada, Uruguay as well as 19 U.S. states and the District of Columbia have already legalized recreational cannabis. In the European Union, Malta in mid-December became the first country to permit the use and growth of weed for recreational purposes. Sales, however, will remain prohibited.
After legalization, Germany will be the biggest EU cannabis market by far. For the time being, the recreational consumption of marijuana in the country is not explicitly illegal, but sales, imports and cultivation are prohibited. Germany legalized medicinal cannabis in 2017.
With further legalization, the government aims to dry out the illegal market, lower criminal justice expenditures and protect public health. According to the German Cannabis Association, illegal marijuana is often contaminated with sand, sugar, glass or spices. Increasingly, synthetic cannabinoids, up to 100 times stronger than natural psychoactive cannabinoids, are used to dilute the weed.
The proposal also includes preventive measures, such as the creation of facilities where consumers can check cannabis from the black market for harmful additives. Marijuana advertising will be strictly regulated. The coalition has agreed to keep the ban on private cannabis cultivation. Whether foreign nationals will be allowed to buy cannabis in Germany, too, remains unclear. According to the coalition agreement, the measure will be evaluated after four years, especially in terms of youth protection.

Georg Wurth

Details Unknown
What cannabis regulation in Germany will look like exactly remains unclear. The coalition is expected to introduce a cannabis tax; a recent study by Heinrich Heine University Duesseldorf estimates that such a tax could contribute €1.8 billion ($1.14 billion) annually to the state treasury. Legalization would bring in an estimated €4.7 billion per year due to additional revenues from corporate tax, trade tax and value-added tax as well as from savings in prosecution and the judicial system. It could also create 27,000 new jobs, the study found.
Apart from pharmacies, the licensed dispensaries mentioned in the coalition agreement reportedly might include tobacconist shops and perhaps even dedicated coffee shops as in the Netherlands, which tolerates recreational cannabis for personal consumption. The new government is expected to define thresholds for the content of tetrahydrocannabinol (THC), the psychoactive ingredient in cannabis, in the products to be sold. The government might also review Germany’s traffic laws, which currently allow 1 nanogram of THC per milliliter of blood serum.
The legalization proposal, long opposed by previous Christian Democrat party-led governments, has triggered a heated debate in Germany. Physicians specializing in addiction treatment warn that it would boost consumption and encourage related issues, such as dependence, depressive and anxiety disorders, psychoses and developmental delays in young people. Meanwhile, law enforcement officials are skeptical that legalization will erase the black market. A tax, they claim, would make legal cannabis significantly more expensive, thus leading to competition between legal and illegal sources.
Georg Wurth, managing director of the German Cannabis Association, does not share law enforcement’s concerns. “The black market will at least be pushed back,” he says. “Every single euro of revenue that will be generated on the legal market will be retracted from the illicit market, and every percent that moves from the black to the legal market is a progress. I’d rather have a legal and a black market than a 100 percent illegal market. If you take cigarettes as an example, there is also a black market, but there are no plans to prohibit cigarettes in order to rein that in.”
The right pricing will be decisive for deflating the illegal market, Wurth adds. “All three coalition partners are aware that they shouldn’t overplay their hand if they really want to force back the illegal market. I am confident that they will succeed if they find the right approach at pricing. In Canada, it took about two and a half years until half of the cannabis revenues came from the legal market.”
Illicit cannabis currently retails at €10 per gram in Germany. Interestingly, this is also the sales price for medicinal cannabis in pharmacies. “Cannabis already is relatively inexpensive in Germany,” says Adrian Fischer, co-founder and managing director of Demecan, which supplies medicinal cannabis. “We presume that consumers will be willing to pay a higher price for legal cannabis for recreational purposes that has a better quality than illegal weed, but the price shouldn’t be much higher than €10. In addition, it has to be guaranteed that there are a sufficient number of points of sale for marijuana. If a consumer must drive 50 kilometers to the next legal dispensary, he is more likely to stick with his dealer round the corner.” If legal cannabis is priced competitively, Fischer forecasts that the German marijuana market will be worth €5 billion in five years.
While the German Cannabis Organization opposes a limit on the THC content, Fischer suggests linking it to certain age limits, as with alcohol. In Germany, drinks with a low alcohol content, such as beer or wine, can be legally purchased from the age of 16 while liquor drinkers have to wait until they turn 18. “Similarly, cannabis with a lower THC content could be made available for 18-year-olds and with a higher THC content for 21-year-olds,” says Wurth.

Adrian Fischer

Important Considerations
The German Cannabis Organization believes the coalition should consider four aspects in shaping regulation. For starters, it should permit private cultivation for personal consumption. “In other countries that have legalized marijuana, such as Uruguay and some U.S. states, this is part of the law,” says Wurth.
Traffic laws are another issue. “Presently, limiting values and criminal proceedings are extremely strict. Cannabis users may lose their driver’s license even though they did not drive stoned, only because they have remainders of cannabis in their blood from consumption days ago that don’t have any effect on their driving behavior anymore,” says Wurth.
He also insists on an amnesty for the cannabis users who are currently listed as criminal offenders. “Their entries have to be deleted,” says Wurth. “In the U.S. states where marijuana is legal, this is regularly being done.”
Lastly, the sale of legal cannabis should remain restricted to specialist shops, according to the German Cannabis Organization. This would also guarantee better youth protection.
However, neither the legalization of cannabis for adults nor prohibition can prevent marijuana consumption among youths, cautions Wurth. “Legalization would nevertheless have a positive impact on youths, even though it cannot principally prevent youth consumption,” he says. “Youths are more susceptible to prevention measures, hence the latter should be stepped up significantly and reformed.
“Currently, police give preventive lessons in schools. They tend to get the message across that youths shouldn’t touch cannabis or else they would end up in the gutter, lose their driver’s licenses, etc. I hope that with the legalization there will also be more investment in better education and credible prevention measures so that youths seek drug counselling help earlier.”
If youths do consume cannabis, Wurth adds, it is safer if their older friends or siblings bring them legal weed from a licensed dispensary rather than potentially contaminated marijuana from a street dealer as is the case now.

Companies currently supplying medical cannabis say they will be able to scale up production rapidly when Germany legalizes recreational cannabis.

Gold Rush
The German illegal marijuana market is estimated at about 400 tons, most of which is imported from Morocco. Since Germany is a signatory to the 1961 United Nations Single Convention On Narcotic Drugs, the country will not be allowed to import or export cannabis for recreational purposes once the substance has been legalized. This means the coalition will either have to negotiate new conditions or stipulate that all cultivation has to take place in Germany.
Presently, only medicinal cannabis is grown in Germany. That business is controlled by three companies: Tilray, Aurora and Demecan. Under supervision of the state-owned cannabis agency, they jointly cultivate 2.6 tons of medicinal cannabis annually to cater to a market that is estimated at 12 tons to 15 tons per year, with demand increasing, according to Fischer. Due to the strict rules and standards, the companies grow the plants in hermetically sealed buildings, with product stored in high-security vaults. The first domestic crop reached pharmacies only last summer; a large amount of medicinal cannabis is still imported.
After legalization of recreational cannabis, manufacturers say they will be able to quickly expand production. Demecan has opened a center for medicinal cannabis in Ebersbach and recently finalized construction of Europe’s largest indoor marijuana production site. It presently has the capacity to produce 1 ton of medicinal cannabis but can supply 50 percent more at short notice, according to Fischer. “Within a year, we could step up capacity to 4 tons and in the mid-term to 10 tons per year. We are prepared to cater to growing demand. Our aim is to cultivate life quality and to ensure patient care, hence it is important to us that legalization of recreational cannabis doesn’t happen at the expense of patients. Therefore, we have built large production capacities to cater to both markets.”
The three providers of medicinal cannabis alone will nevertheless not be able to meet the demand for recreational cannabis, he admits. “To reach this target, legislature must tender licenses for the cultivation of marijuana in Germany relatively quickly and right on time before the actual legalization.”
With medicinal cannabis being a medicine, all aspects of production are subject to the narcotics act and must be compliant with good manufacturing practices and good agricultural and collection practices guidelines. A relaxation of production regulations for the cultivation of recreational weed, Fischer says, could contribute to less costly production.

Medicinal cannabis has been legal in Germany since 2017

Role Models
Wurth expects it to take another one or two years until the law takes effect—and even longer until the first licenses will be allocated, cultivation gets started and the first shops open. “The quickest part of such a law would be the decriminalization of consumers. The U.S. have shown that this can happen immediately.”
In shaping the law, he says, Germany has several role models it could draw upon. “The Netherlands are no example of a legalized market as the coffee shops are only tolerated, and supply is not regulated, so that criminal structures have emerged like everywhere else. But the coffee shops are a good example of allowing consumption on-site, which is not the case in most other countries that have legalized marijuana. As for points of sale, Germany should look to Canada and the U.S.—licensed specialist shops in a limited number; no access for youths; exact declaration of the products, their origins and their CBD and THC contents. Uruguay allows cultivation for personal use; people can even join grower communities to cultivate their weed or have it cultivated.”
In the end, the legalization of cannabis in Germany might go more smoothly, critics fear. In February 2021, the Cato Institute published a study on the legalization of marijuana by some U.S. states. It found that both proponents and opponents overstated their cases. Except for tax revenues, which exceeded some expectations, the report says state legalizations have mainly had minor effects.

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.

February 1, 2022
Budding Business

Photo: Canadian Greenfield Technologies

The market for processing equipment is flourishing as more authorities legalize cannabis.
By Stefanie Rossel
If you think tobacco is a complex plant to handle, try processing cannabis. The plant consists of more than 100 cannabinoids, with each of them having a different effect on the body. In addition, it contains terpenes, naturally occurring chemical compounds that make certain strains taste or smell different than others.
The herb comes in two different varieties of the Cannabis sativa species: hemp and marijuana. Hemp is usually grown outdoors or in a greenhouse whereas marijuana is cultivated indoors or in a greenhouse.
The major difference between the two, however, is tetrahydrocannabinol (THC), a psychoactive constituent that produces the “high” people feel when they smoke marijuana or eat foods containing it. Hemp contains less than 0.3 percent THC whereas marijuana can have between 5 percent and 30 percent of the compound.
By contrast, the concentration of the nonpsychoactive component, cannabidiol (CBD), which is thought to have various therapeutic benefits, is high in hemp and low in marijuana. The latter species is grown for the highest concentrations of THC and CBD possible, with derivatives ranging from leafy material to THC and CBD extract and products such as candy or drinks. Hemp, on the other hand, is cultivated for CBD and other cannabinoids. It is the basis for CBD extracts, health foods and cosmetics. The stalks of hemp are used to create building materials, plastics, industrial oils, paper and textiles, among other products.
The global cannabis market was valued at $28.266 billion in 2021. With legalization gaining momentum, analysts predict unprecedented growth. Fortune Business Insights expects the global cannabis market to increase to $197.74 billion in 2028, reflecting a compound annual growth rate (CAGR) of 32.04 percent. In the U.S., the world’s leading market, where recreational cannabis is legal in nineteen states and the District of Columbia, the cannabis market was worth $13.5 billion in 2021, according to Grand View Research. Valued at $2.8 billion in 2020, the CBD segment is expected to expand to $13.4 billion in 2028, which corresponds to a CAGR of 21.2 percent. Grand View Research expects sales of hemp-derived CBD to grow even faster, at a CAGR of 23.4 percent post-pandemic due to increasing demand from the pharmaceutical sector and rising health awareness among consumers.

Separating the Green Fraction
Since recreational cannabis was legalized in Colorado a decade ago, a whole sector of dedicated, specialized processing equipment suppliers has emerged throughout the U.S. and Canada. Getting the desired compounds out of a marijuana or hemp plant is a complex, multi-step separation process.
In the case of hemp, it starts with the decortication of the tough woody interior or “hurd” material from the softer, fibrous exterior of the stalk. Depending on the size of their crop, farmers can outsource this procedure to third-party processors or do it themselves with specialized machinery. They can choose from equipment of various sizes, ranging from small mobile machines to industry-scale decorticators, such as the HempTrain, an advanced processing system developed by Canadian Greenfield Technologies Corp of Calgary. Conventional decorticator systems, which are based on a hammermill process, cause damage to the bast fiber and attrition to the hurd and are unable to separate the clean green fraction rich with CBD. The Hemp Train, by contrast, employs high-speed kinematic action, according to its manufacturer.
“The HempTrain is indeed a mini factory,” explains Stephen Christensen, vice president of Canadian Greenfield Technologies Corp. “HempTrains use our patented advanced processing technologies in two different modes: a) to separate dry feedstock into long, structural bast fiber, clean, size-specific hurd, and a nutrient-rich microfiber, and b) to separate fresh/green feedstock into a high-CBD fraction containing bud leaves and a lower CBD fraction containing all other material. Bearing this in mind, the typical target groups would be general hemp processors, or product specific producers—including CBD from industrial hemp or other hemp streams. This is not available from any other technologies.”
The company, which sells its equipment in the U.S. and Canada, is in the process of licensing its technology to an African company to manufacture and distribute its decortication technology and equipment in eight African countries, the U.K. and the Caribbean. Christensen says that currently the U.S., Eastern Europe, Southern Africa and Australia account for the most international interest as these countries have been the most successful in educating their people and governments about the benefits of whole-plant utilization.

Multi-Step Procedure
In the next step, the biomass undergoes an extraction process, during which it is placed inside an extraction vessel with a solvent to remove soluble components.
“There are three primary methods of extracting hemp and cannabis: CO2, ethanol and light hydrocarbons, propane and butane,” explains Fritz Chess, founder Eden Labs, a supplier of cannabis extraction equipment based in Seattle. “All of these methods have their pros and cons. CO2 has the advantage of being a nonflammable, solventless method that also has great marketing cachet. Once the equipment is paid for, it is also the lowest cost method, which means in the long run, CO2 will likely rule the industry. Initial costs for CO2 are much higher than the other two methods—up to 10 times as much.”
Ethanol has the lowest cost of entry, he adds, but involves a multi-step process using large volumes of a flammable liquid.
In many ways, hydrocarbons are the most efficient method, Chess says. “It’s a very fast extraction and requires less post-processing than other methods. Equipment costs are less than the other two methods. The problem is the extreme flammability of these gases adds an enormous burden of safety requirements and regulations, which can negate the cost advantage of the equipment purchase.”
With all three methods, the desired constituents cannabinoids and terpenes, which have value for medicinal and recreational use, can be extracted simultaneously. “Flowers and leaves are the part of the plant that is extracted, with flowers being the most desirable,” Chess points out.
His company has been on the market longer than most other players in the field. It was established in 1994 as a manufacturer of plant botanical extraction but began to include cannabis extraction early on. Meanwhile, the latter generates the majority of his company’s turnover, Chess says. “When proposition 215 passed in California [permitting cannabis] for medical use, cannabis became about 20 percent of Eden Labs’ business. When recreational [use] passed in Washington and Denver, it went to about 80 percent, and the company doubled sales for three consecutive years.”
Eden Labs supplies extraction equipment using CO2 and ethanol but occasionally builds custom hydrocarbon extractors, says Chess. A recent solution by the company combines the advantages of the two solvents CO2 and hydrocarbon, catering to both marijuana and hemp companies. The machines are making use of the higher output achieved by hydrocarbon extraction while at the same time reducing the danger of flammability by diluting the hydrocarbon with CO2. “We have a method combining CO2 and a small percentage of propane, which has the advantages of making a very high-quality extract quickly in a process that is nonflammable. We are currently marketing this design to select customers.”

Refining Exercise
After extraction, the liquid obtained from extraction, which contains cannabinoids, THC and/or CBD, waxes, fats, lipids and terpenes, must be winterized. During this procedure, proof alcohol is added to the oil to thin it and causes the fats, waxes and lipids to coagulate. The consecutive filtration separates them from the oil.
After that, the liquid undergoes solvent recovery, during which the majority of solvent in the crude cannabis extract is removed and the cannabinoids are separated from the solvent. High-speed evaporators help accelerate the process.
The liquid is then filled into a reactor, chiller, condenser or vacuum pump for decarboxylation, a chemical process that converts THCA and CBDA, the biosynthetic precursors of THC and CBD, into THC and CBD via heating and drying. This procedure can take up to ten hours.
Finally, distillation will further refine the cannabis extract. Through vacuum-assisted evaporation, the cannabinoids are separated from impurities, such as terpenes and plant material. The extract is heated and each of the undesired components separated due to their different boiling points.
As ever more countries legalize cannabis for medicinal and recreational use, Chess has a clear vision of how the market will develop. “As cannabis legalizes globally and an import/export market forms, we expect the same market forces to come into play that used to rule the black market. Tropical regions will once again dominate the market because of the longer growing season and superior product that comes from that part of the world. The expensive indoor grows that currently dominate the market will be priced out of existence.”

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.

February 1, 2022
Halo Exempted From Vape Mail Ban

Photo: will milne

The U.S. Postal Service (USPS) has granted Pure Labs permission to ship its Halo brand of vaping products to compliant businesses through the brand’s Master Distributors, Syndicate Global Distribution and Halo Wholesale Direct.
The approval constitutes a regulatory exception to the mailing restrictions described in the Prevent All Cigarette Trafficking (PACT) Act.
The original PACT Act was amended by Congress on Dec. 27, 2020, to incorporate e-cigarettes and vaping products.
“This is a huge win for Halo and for all of our retail partners,” said Kevin Dietz, director of Halo brand sales, in a statement. “Halo’s tobacco and menthol vape products are in demand by adult consumers throughout the country, and we are excited to have USPS solidify the supply chain. Halo has been here from the start and has numerous ENDS products in the final stage required for FDA authorization, furthering Halo’s commitment to remain America’s No. 1 tobacco-flavored e-liquid brand.”
In December, Turning Point Brands received a USPS exemption to ship vapor products to age-restricted vape shops across the United States through VaporBeast and other websites.

January 31, 2022
Publishing Ban for Industry-Owned Firms

Photo: PixieMe

A group of international respiratory societies has banned researchers associated with tobacco companies from publishing papers in their journals following Philip Morris International’s acquisition of the U.K.-based pharmaceutical firm Vectura, reports Nature. The measure comes on top of the groups’ decade-long publishing ban on researchers directly funded by tobacco companies.
In a joint statement, the groups describe PMI’s purchase of Vectura as “highly unethical and inappropriate.”
Scientists at Vectura produce drugs that treat asthma and chronic obstructive pulmonary disease, including some smoking-related respiratory illnesses. “That is the ultimate conflict of interest,” said Gregory Downey, a pulmonologist at the University of Colorado Denver and president-elect of the American Thoracic Society, which co-signed the statement.
“The issue is that ‘Big Tobacco’ could use, and will use, this technology not only to potentially enhance delivery of tobacco-containing substances and nicotine devices but to addict more people.”
Moira Gilchrist, vice president of strategic and scientific communications at PMI in Lausanne, Switzerland, says the idea that the company would use Vectura’s technology in this way is “false and without basis.”
“We openly welcome and encourage legitimate critique and debate about our business transformation, but when this morphs into actively ostracizing scientists and attempting to prevent the prescribing of proven medicines for patients, we should pause and think of the implications,” Gilchrist adds.
Signatories of the statement include The European Respiratory Society, International Union Against Tuberculosis and Lung Diseases, Asian Pacific Society of Respirology, Asociacion Latino Americana De Torax, and the Global Initiative for Asthma.

January 31, 2022
Korea: E-Cigs Gain as Combustibles Stagnate

Photo: Dzmitry

Sales of cigarettes in South Korea were flat from 2020 to 2021 but demand for electronic cigarettes rose amid the protracted pandemic, reports the Yonhap News Agency, citing data from the finance ministry.
South Korean smokers purchased 3.59 billion 20-cigarette packs in 2021, similar to the number logged the previous year, according to the Ministry of Economy and Finance.
Sales of traditional cigarettes fell 2 percent on-year to 3.15 billion packs last year while those of heat-not-burn tobacco products rose 17.1 percent to 440 million packs.
Compared with 2014, however, cigarette sales declined 17.7 percent last year—a development the government attributed to rising prices and anti-smoking campaigns.
In January 2015, South Korea increased cigarette prices by 80 percent to KRW4,500 ($3.72). The next year, the government required tobacco companies to print graphic images depicting the harmful effects of smoking on the upper part of cigarette packs.
As of 2020, the smoking rate among Korean men aged 19 or older dropped to a record low of 34 percent, down 1.7 percentage points from a year earlier, according to the health ministry.

January 31, 2022