Tag: Canada

‘Quebec Lobby Groups Blind to Illicit Trade’

Photo: Thorsten
Imperial Tobacco Canada is taking anti-tobacco groups to task for their silence about the boom in illicit sales following Quebec’s ban on flavored e-cigarettes.
“You cannot claim ‘Mission Accomplished’ by simply passing regulations,” said Eric Gagnon, vice president of corporate and regulatory affairs for Imperial Tobacco Canada, in a statement. “The regulations must work. And these ones don’t. Flavored vapor products are still being sold in Quebec. The problem is that they are now being sold illegally.”
Quebec banned flavored vapes Oct. 31, 2023, following years of pressure by anti-tobacco groups. According to Imperial Tobacco Cananda, the same groups refuse to acknowledge that there is a problem with the regulations and will not call on the government to fully enforce the regulations.
“It’s time that the Coalition Quebecoise pour le controle du tabac and other so-called health groups acknowledge that there is a problem with the regulations and push to fix it,” Gagnon said. “If the real objective of the regulations was to ban flavors, where are these health groups now that flavored vapor products are being sold illegally?”
Imperial Tobacco Canada noted that some of the lobby groups have ties to the provincial government and receive funding from them.
“It is time for the public to see the real intentions behind these anti-tobacco lobby groups,” said Gagnon. “They hide behind the virtue of public health, but their recent silence demonstrates that their only real objective is going after tobacco companies, even if this means pushing consumers to illegal products.”
“It is astonishing to see that Quebec’s anti-tobacco lobbyists prefer turning a blind eye to illegal flavored vaping products rather than recognizing that this is a failed policy and working with us to demand concrete enforcement measures to Minister Dube,” said Gagnon. “This says a lot about the real intention behind the individuals leading these organizations.”
May 2, 2024
Canada Relaunches Flavor Ban

Photo: DD Images
Canada is set to enact a three-year-old flavor ban, according to Vaping360. The regulations were first published in June 2021 in the Canada Gazette but then never went into effect. Now, however, Health Minister Mark Holland has reinvigorated the ban.
Holland previously worked at Heart and Stroke, where he was the national director of children and youth. “I was with Heart and Stroke when we dealt with the issue of vaping,” he said, “and there were many voices at that time, when information was uncertain, who said, ‘Let this exist as a cessation tool. Don’t take action.’ The result of that, unfortunately, was that the tobacco industry was able to addict a whole new cohort of young people—who had no exposure to nicotine—to something that’s absolutely deadly for their health. It has had very injurious outcomes for our health system.”
Vaping proponents warned that the measure could backfire. “As presented, Minister Holland’s proposal will not achieve the desired public health objectives and could, on the contrary, seriously harm a significant number of Canadian adult ex-smokers, the Vaping Industry Trade Association (VITA) wrote in a press release.
“This appears to be a personal legacy project for the Minister of Health, supported strongly by his former peers at the Heart and Stroke Foundation, the Canadian Cancer Society, the Canadian Lung Association and some smaller anti-smoking NGOs [nongovernmental organizations],” said VITA Managing Director Thomas Kirsop.
The ban would give manufacturers a list of fewer than 100 allowable flavoring ingredients that can only be used to create e-liquid in tobacco, mint and menthol flavors. Sweeteners of any kind would be banned. The regulations will also “prescribe sensory attributes standards to prevent a sensory perception other than one that is typical of tobacco or mint/menthol.”
April 11, 2024
Canada to Crack Down on Pouches

Image: Imperial Tobacco Canada
Canada Health Minister Mark Holland promised to crack down on nicotine pouches, issuing a warning to tobacco companies that he claimed are marketing the products to children, according to City News Everywhere.
“I would say to the tobacco companies that continue to look for ways to use loopholes to addict people to their products, get away, stay the hell away from our kids,” Holland said during a press conference.
He accused Imperial Tobacco of using a loophole to get its oral nicotine pouch, Zonnic, approved by Health Canada, branding the product as a quit-smoking aid. Health Canada’s approval did not include a minimum age limit. Holland claims that this product is now being used to hook another generation on nicotine products.
Imperial denied claims of using a loophole to gain approval; the company stated it simply applied to Health Canada and received approval.
Holland plans to restrict access to Zonnic as well as restrict flavors and marketing.
“To me, it is absolutely essential that we see these products move behind the counter,” Holland said.
“Whatever dark corner the tobacco industry crawls and creeps into to go after our children, wherever they go, whatever loophole they think they can find, they will meet me like an iron wall,” he said.
“To single out Zonnic for practices that are widespread across the industry is not only unfair but also smacks of hypocrisy, suggesting an anti-tobacco company bias rather than a genuine concern for public health,” said Eric Gagnon, vice president of regulatory affairs at Imperial Tobacco Canada.
Gagnon noted that Imperial Tobacco Canada is open to discussing Holland’s proposed restrictions, but he believes that they should apply to all stop-smoking products, including nicotine gum. He also noted that the company has moved to place Zonnic behind counters, despite not being required to do so, but he feels that flavors are helpful to those trying to quit smoking and that Zonnic should be available everywhere that cigarettes are sold.
Health Canada issued a consumer safety alert the same day as the health minister’s press conference regarding Zonnic: “They should not be used recreationally, by nonsmokers, by people under the age of 18 or by others at risk of nicotine’s toxic effects.”
Tobacco control advocates have applauded the health minister’s plans. “We’re thrilled that Minister Holland is taking steps to stop this cycle and protect youth,” said Doug Roth, chief executive of Heart and Stroke, which Holland worked for between 2011 and 2015.
March 21, 2024
Health Groups Urge Pouch Prescriptions

Photo: DW labs
Leading health organizations are urging Canadian lawmakers to crack down on flavored nicotine products and make nicotine pouches available upon prescription only.
In a full-page ad in The Hill Times, Action on Smoking and Health, the Canadian Cancer Society, the Canadian Lung Association, the Quebec Coalition for Tobacco Control, Heart and Stroke, and Physicians for a Smoke-Free Canada assert that flavors play a key role in attracting kids to nicotine products and call on the federal government to ban flavors, including mint and menthol, in e-cigarettes.
The ad also calls for action to protect minors against the sale and promotion of nicotine pouches by making them a prescription-only product. Under the current federal rules, nicotine pouches authorized under the Natural Health Products Regulation can be legally sold to minors in convenience stores and promoted on television, billboards and social media, including by means of lifestyle advertising.
“Several additional options are available to the health minister, like temporarily suspending the sale of nicotine products, which would also allow federal, provincial and territorial authorities to strengthen relevant laws and regulations. For example, nicotine pouches could be subject to many of [the] same provisions regarding promotion that apply to tobacco and vaping products,” said Cynthia Callard, executive director of Physicians for a Smoke-Free Canada, in a statement.
The ad is in part a response to the success of Imperial Tobacco Canada’s Zonnic pouches, which Health Canada approved for sale in 2023. The health groups rebuffed the company’s insistence that its pouches are intended for adult smokers who want to quit. “Unlike other manufacturers of nicotine-replacement therapies, this company deliberately chose to distribute its product through convenience stores and promote them with lifestyle messaging and images of young adults,” said Flory Doucas, co-director and spokesperson of the Quebec Coalition for Tobacco Control.
February 21, 2024
BC Restricts Pouch Sales to Pharmacies

Photo: StratfordProductions
British Columbia has restricted the sale of nicotine pouches to drug stores, forcing users to consult a pharmacists prior to purchase, reports CBC.
“By limiting access to these products and ensuring they are dispensed by trained health-care professionals, our goal is to prevent their misuse, especially among young people for recreational purposes,” said Health Minister Adrian Dix.
The Canadian Cancer Society applauded the move, noting that while youth smoking rates in B.C. are down, other methods of nicotine consumption are up significantly.
“With the introduction of flavored nicotine pouches last year, youth once again can become addicted to these new tobacco industry products,” it said in a statement.
BAT subsidiary Imperial Tobacco Canada, manufacturer of the Zonnic nicotine pouch brand that was authorized for sale by Health Canada in October 2023, said British Columbia’s move would make it harder for smokers to quit.
“It is mindboggling that the only cessation product in BC that is currently stored behind the counter in convenience stores with retailers requiring age-verification is being targeted by today’s announcement,” said Eric Gagnon, vice-president, corporate and regulatory affairs at Imperial Tobacco Canada, in a statement.
“If today’s announcement was truly about protecting youth against nicotine, we question why Premier Eby isn’t putting the same restrictions on the other cessation products that contain nicotine and are available over the counter without proof-of-age,” he added.
In November, federal health minister Mark Holland said regulators had been “duped” and vowed to close the loophole that allowed Zonnic to be sold openly.
“There are very serious questions about what the tobacco industry is doing here and what their intention is. And it would seem that their intention is to addict new young people to nicotine, which is disgusting,” Holland said at the time.
Zonnic does not contain tobacco, and because the pouches contain less than four milligrams of nicotine each and are not inhaled, they do not fall under existing federal or provincial tobacco or vaping legislation.
February 12, 2024
Quebec Urged to Crack Down on Flavored Vapes

Eric Gagnon, Vice-President of Corporate and Regulatory Affairs at Imperial Tobacco Canada, urges the government to buckle down on enforcing its law during the press conference. (Photo: Imperial Tobacco Canada)
Imperial Tobacco Canada is urging the government of Quebec to crack down on illegal flavored vaping products.
Three months after the law banning flavors in vaping products came into force, flavored e-cigarettes remain available at a large number of retail outlets that either infringe on the law or are using a variety of tactics to circumvent the law, according to Imperial Tobacco Canada, which is part of British American Tobacco.
“We are aware of the growing concern with the proliferation of products that circumvent the regulations, resulting in the creation of an illicit market,” said Imperial Vice-President of Corporate and Regulatory Affairs Eric Gagnon in a statement.
“We recently identified over 200 sales outlets that sell non-compliant vaping products. These stores have not adjusted to the new regulations and continue to offer a wide range of flavored products, including those that exceed the maximum permitted quantity of 2 ml.”
According to Imperial, these stores now also sell flavor enhancers as a way to circumvent the new regulation. “Given that these enhancers are not intended to be vaped, they can pose serious risks to consumers who use them,” the company wrote in a press note. “It is also because of a similar illegal market that a wave of lung diseases spread between 2019 and 2020 in the U.S., claiming 68 lives.”
Imperial says that instead of meeting its objective of tackling vaping among young people, the government has created a thriving illicit market.
During a Jan. 21 appearance on the talk show Tout le monde en parle Health Minister Christian Dubé blamed tobacco companies for the situation.
Imperial Tobacco Canada said it strongly refutes the allegations. “As a responsible company that fully complies with the regulations in place, we denounce these abuses and reiterate our call for stronger enforcement of the law,” said. Gagnon. “We warned the minister’s office several months ago about the inevitable collateral damage that would result from such a regulation being implemented. Unfortunately, nothing was done, and the situation persists as a result.”
February 2, 2024
Canada Rolls Out New Health Warnings
Canada has started rolling out 14 new graphic health warnings on cigarette packs, reports Yahoo Finance. Manufacturers must ensure the new labels are on packages by Jan. 31, and retailers are required to stock the packs by April 30, according to Health Canada.
The new labels feature smoking-related illnesses such as tongue, stomach and neck cancer, as well as gangrene. Canada pioneered the concept of graphic health warnings in 2001 and has frequently updated its image library to prevent the pictures from losing their shock value.
The latest set of photo warnings also build on various other harms of smoking, including heart attack, brain damage and death from stroke as well as impotence due to reduced blood flow to the penis.
Another set of 14 photo warnings is expected to appear on cigarette packages in two years.
Last year, the government also required cigarette manufacturers to print health warnings on individual cigarette sticks. Cigarettes now include messages, such as “poison in every puff,” in English and French.
Canada aims to slash smoking rates from about 10 percent to less than 5 percent by 2035.
January 19, 2024
Canada Targets Zonnic Marketing ‘Loopholes’

Image: Imperial Tobacco Canada
Canadian Health Minister Mark Holland announced that the health department will address “loopholes” surrounding Zonnic, a flavored nicotine pouch product from Imperial Tobacco Canada, reports the Canadian Broadcasting Corp.
Health Canada previously approved the sale of Zonnic without any advertising or sales method restrictions.
According to Holland, “the behavior and intentions of the tobacco industry have raised serious concerns as they appear to want to addict new young people to nicotine, which is appalling, and we want to address this issue.”
In November, six national health organizations called on the government to immediately regulate the advertising and sale of flavored nicotine products; Zonnic is not included in any existing federal or provincial tobacco or e-cigarette legislation as it does not contain tobacco, contains less than 4 mg of nicotine and is not inhaled.
Holland reportedly takes responsibility for the oversight and plans to review the approval process for nicotine products.
Imperial Tobacco Canada must conduct annual self-reports and “identify any appeal or abuse of their products among young people,” Health Canada stated.
“Marketing targeted at young people will be considered deceptive advertising and may trigger post-listing compliance action,” the Canadian Ministry of Health stated. Decisions regarding product sales locations and age restrictions are determined by individual provinces and territories, according to Health Canada.
In response to earlier criticism, Imperial Tobacco Canada said that it has already taken measures to prevent youth access to its products.
December 1, 2023
The Potential of Pot

Photo: Konrad
Despite regional setbacks, global cannabis sales are still getting higher.
By Stefanie Rossel
Global cannabis sales continue to grow, albeit at a slightly slower pace than before, facing headwinds in comparatively mature markets, such as Colorado or California. Euromonitor International expects the value of the global legal cannabis market to grow from $41 billion in 2022 to $98 billion by 2027. Despite increasing access and acceptance, the stigma around cannabis remains and regulatory uncertainty prevails.
The main growth drivers are innovation, investments from tobacco companies and consumer perception. Cannabis caters to the needs of consumers unnerved by economic, environmental and political uncertainties along with the spread of armed conflicts. Indeed, data from Israel’s ministry of health shows a spike in demand for a medical marijuana program one month into the war with Hamas. Meanwhile, the government of Ukraine—another country at war—is preparing to legalize medical cannabis.
Euromonitor expects noncombustible cannabis products to gain share as consumers become more concerned about their health. Further legislation of adult-use cannabis would have significant implications for other fast-moving consumer goods, according to the market intelligence providers, with innovations in cannabis involving topicals, beverages or edibles.
Alert to opportunity, the major tobacco players have already ventured into the sector. Philip Morris International has invested in Vectura Fertin Pharma, a contract development and manufacturing organization specializing in gums, pouches, tablets and other solid oral systems for the delivery of active ingredients. According to news reports dated July 2023, PMI is also planning to take over Syqe Medical, an Israeli company, which manufactures a metered-dose inhaler for pain reduction using medical marijuana.
BAT, for its part, has stakes in 13 cannabis startups. In April, the company entered a joint venture with Charlotte’s Web Holdings, a cannabidiol (CBD) producer based in Denver, Colorado, USA. Since 2021, it also holds a minority stake in Organigram, Canada’s second-largest licensed cannabis producer. In early November 2023, BAT boosted its interest in the company through a cad124.6 million ($90.15 million) investment. Last year, it invested $37.6 million in a leading German cannabis company called Sanity Group.
Imperial Brands acquired a stake in Auxly in 2019, while Altria is represented in the cannabis market through Cronos of Canada.

Despite the growth of the market, Canadian companies are struggling to profit from legal cannabis.
(Image: JHVEPhoto)
Successful Experiment
Presently, two markets are of particular interest for investors in the cannabis space: Canada, which in October celebrated the fifth anniversary of legal recreational cannabis; and Germany, which was supposed to legalize cannabis in November.
Canada’s government had committed itself to reviewing its Cannabis Act after three years, but the Covid-19 pandemic delayed that exercise. In October, the government published a summary of feedback provided by industry, healthcare and community groups. Its conclusions were sobering. Despite the growth of the market, companies across the supply chain are struggling to profit from legal cannabis. Legal producers are burdened by significant regulatory fees, distributor markups and taxes in a hyper-competitive market. The illicit market, meanwhile, still represents 40 percent of the business.
In their rush to compete with illegal products, sellers of legal cannabis have dropped their prices dramatically, selling products for as low as cad3 per gram instead of the cad10 per gram originally envisaged by the government. Due to advertising and packaging restrictions, communication with consumers, even to inform them about different varieties of cannabis and their effects, is nearly impossible. As a result of such challenges, several first players have exited the market or reduced manpower.
Legalization has also impacted public health: The Canadian Institute for Public Health noted that cannabis-related emergency department visits and hospitalizations increased 14 percent between 2019 and 2021. Despite its shortcomings, Deepak Anand, principal of Vancouver-based ASDA Consultancy Services, deems legalization a success. “Legalization has resulted in about a 50 percent reduction in illicit market sales,” he says, quoting a recent survey in which 48 percent of cannabis-using respondents stated that they purchased all their products at a licensed retailer.
“Retailer availability and proximity is an important metric in increasing overall market penetration and facilitating access,” says Anand. “No one expected the illicit market to disappear on day one or year five of legalization. The fact that we are at almost 50 percent reduction says a lot about the progress made.”
Altogether, 64 percent of Canadians supported legalization, according to the probe. The survey also showed that people aged 45 and older increased their cannabis intake the most of all age groups following legalization, whereas those under 17 reduced their consumption.

Legalization has resulted in about a 50 percent reduction in illicit market sales.
Deepak Anand, principal, ASDA Consultancy Services
Lessons to be Learned
Anand emphasizes that legalization is a process rather than an event and that the experiences of Canada show other countries what works and what doesn’t. Lessons, he says, include the importance of avoiding over-taxation and overregulation of a nascent industry, particularly when one of the goals of legalization is to transition consumption from illicit to licit channels.
What’s more, tax earnings derived from legalization must not be used solely to fill government coffers. “Revenues must be reinvested by providing the industry with data, research and tools to support the nascent industry and transition supply from criminal and illicit channels.”
Governments must also guard against setting the age of access too high or the THC limits too low, according to Anand. Furthermore, they should make sure that social justice reform is baked into any legalization programs.
Anand expects the final report on Canada’s Cannabis Act, which will be tabled before Parliament in March 2024, to take into account industry suggestions on taxation and THC levels, concerns from academics about the lack of research and a call for an overhaul of the medical system.
The Canadian cannabis market, he predicts, will see only the fittest companies surviving. “Strong business fundamentals and financial discipline will be rewarded,” says Anand. ”Companies and teams that focus on the plant and the consumer will thrive as we are seeing in the market currently. Cannabis isn’t going anywhere; it is an industry that is here and will not only stay but also thrive in the future.”
Disappointing Move
Meanwhile in Germany, legalization appears to have lost some of its momentum. Hopes were high when, in 2021, a new coalition government announced it would permit licensed shops to sell recreational cannabis to adults, i.e., those from the age of 18. The move would have made Germany the biggest EU cannabis market by far. With the legalization, the government aimed to starve the illegal market, decriminalize occasional users, lower criminal justice expenditures and protect public health. The expected cannabis tax, experts predicted, could contribute up to €1.8 billion ($1.92 billion) annually to the state treasury.
Two years on, all that remains of the lofty plans is a watered-down version. After realizing that full legalization of recreational cannabis would interfere with the U.N. Single Convention on Narcotic Drugs (1961) and EU legislation, the cabinet on Aug. 16, 2023, approved a bill that would allow adults to possess up to 25 grams of the drug, grow a maximum of three plants and acquire weed as members of nonprofit cannabis clubs. The government said it would also launch a pilot project to test the effects of a commercial supply chain for recreational cannabis over five years—a proposal for which it will need to present separate legislation.
The legislation was scheduled to pass Parliament on Nov. 16, 2023, making cannabis legal from Jan. 1, 2024. However, after meeting fierce opposition from numerous parties, among them conservative policymakers who warned that legalization would encourage cannabis use and create more work for authorities, industry associations and consumer advocacy groups, the final reading was delayed to mid-December.
In a Nov. 6 parliamentary hearing, the German Cannabis Association (DHV) pointed out that the possession cap of 25 grams per year made home cultivation impossible, as it referred to fresh flowers, which tend to lose weight after drying. “Under these conditions, no one will take the trouble to cultivate cannabis,” says DHV Managing Director Georg Wurth. “The limit would be a promotion scheme for the black market.”
DHV also advocates to allow private growers to cultivate more than three plants and criticizes the distance rule, which stipulates that consumption will neither be allowed in cannabis clubs nor within a 200-meter distance of schools, kindergartens, playgrounds or cannabis clubs. “Such a distance—or any obligatory distance—would mean that in populated areas there would be no space left for legal consumption,” he says. “The idea to completely prohibit consumption on the premises of clubs whose only aim is to cultivate cannabis is unrealistic and makes no sense. The envisaged distance rule for cannabis clubs is similarly absurd, as it does nothing for youth prevention.”
Furthermore, the punishments for violations described in the proposed legislation are too harsh, according to Wurth. The bill stipulates imprisonment of up to three years for the possession of 26 grams of cannabis or the cultivation of four plants. Consumption-related offences involve high fines. Smoking pot in a 190-meter radius from a school, for example, could cost the user up to €100,000. The DHV also calls for a legal opportunity to consume self-cultivated cannabis with friends. “After all, the goal is to deprive the black market of as much consumed cannabis as possible,” Wurth says. The association also calls for equal treatment of cannabis and alcohol in road traffic and an alignment of sanctions.
At press time, an amended version of the bill that takes into account stakeholders’ input had not been released. The first part of the planned cannabis reform in Germany is now expected to become effective on April 1, 2024, at the earliest.
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.

December 1, 2023
BAT Ups Investment in Organigram

Credit: Roxxy Photos
Organigram Holdings Inc. has extended its relationship with British American Tobacco. The move boosts the Canadian cannabis producer’s financial strength and positioning it to expand globally.
Organigram said in a statement that BAT is investing a further $90.5 million in the business, building on an initial $160 million injection back in 2021.
Organigram said the investment will allow it to extend its footprint beyond Canada, and also strengthen its financial position for long-term, sustainable growth, according to media reports.
“This investment bolsters an already strong balance sheet and solidifies our position as a leading cannabis company,” said Beena Goldenberg, chief executive of Organigram.
The firm said the deal enables it to invest in growing the topline of its core business, while optimizing operations to deliver on cost-saving efficiencies, thus accelerating earnings growth.
Organigram will use the majority of the investment to create a strategic investment pool, named Jupiter.
Jupiter will target investments in emerging cannabis opportunities that will enable Organigram to apply its industry-leading capabilities to new markets, it said.
November 8, 2023