Tag: New York

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.”

February 21, 2025
N.Y. Lawmakers Want to Ban Zyn for its Flavors

New York lawmakers have introduced a bill in the legislature that would ban flavored oral nicotine pouches such as Zyn, which recently received FDA approval. The pouches do not contain tobacco and are the fastest-growing product on the U.S. tobacco market, but lawmakers are comparing their flavors to flavored vape cartridges that were banned in the state in 2020 because they are attractive to children.

“You always have to keep on top of this industry,” said Assemblywoman Linda Rosenthal, who is sponsoring the bill. “Because as we extinguish some of the availability to youth in particular, the industry comes up with more ways to entice people to be addicted to nicotine and their products.”

The legislation — which is sponsored in the Senate by state Sen. Brad Hoylman-Sigal — asserts that minors could turn to nicotine pouches as flavored vapes become harder to find under New York’s ban.

Zyn is manufactured by Swedish Match, a subsidiary of Philip Morris International, which maintains that Zyn is intended and marketed only for those 21 and older, and that the vast majority of Zyn’s clientele are not new nicotine users, but adults switching to a safer delivery method.

“Almost everyone has come from another product,” Brian Erkkila, Swedish Match’s director of regulatory science, said. “That’s who the product is designed for. If you think about the flavors our product comes in, they come in flavors that have been in smokeless tobacco products like moist snuff and dip, for decades. These aren’t new flavors. They’ve been around for a long time.”

Alan Mathios, a professor at Cornell University who studies the economics of tobacco regulation, called the potential ban shortsighted and said it could lead to the proliferation of illicit products, make the market more difficult to regulate, and have the opposite result in terms of keeping them away from underage users.

“A lot of menthol smokers really like their menthol,” Mathios said. “If they don’t have an alternative menthol product, they’re unlikely to move away from cigarettes. So even if you do see some youth movement into menthol-flavored pouches, you have to weigh that against the role that menthol-flavored products play in helping adults switch.”

February 12, 2025
BAT Moving Listing Would be ‘Distraction’

BAT CEO Tadeu Marroco dismissed the idea of moving the company’s listing to New York from London, stating that it “would create a lot of distraction internally,” according to the Financial Times. Marroco also noted that he wasn’t sure “the benefit would be as evident as some suggest.”
In 2023, Rajiv Jain, chair and chief investment officer of U.S. investment group GQG Partners, which at its peak owned 4 percent of BAT stock, urged BAT to switch its primary listing to the U.S. Jain argued that Philip Morris International, which GQG Partners also owns a stake in, trades at a much higher earnings multiple.
GQG Partners sold out of BAT in July 2023 due to BAT’s refusal to move its listing.
Marroco said in regards to the possibility of moving the company’s listing, “I don’t think that in this period of time, we should be focused on this.” He noted that he has “many other things” he needs to do and that “There is nothing to suggest that … it’s a no-brainer to go to the U.S.”
While Marroco acknowledged that London’s capital markets are struggling to attract and retain listings, he noted that there are advantages to staying in the U.K.
“If you have a shareholding of a U.K. [listed company] and you are located outside, you don’t pay withholding tax on your dividends, which is different from the U.S.,” he said.
“Hopefully, we can see that in 10 years’ time, we don’t have this type of discussion. Today, there’s a lot of emotion that relates to it because of the frustration of some that are leaving.”
BAT recently announced a sale of part of its stake in ITC to restart BAT’s share buyback program. “What’s most important for me is that having restarted the buyback, this should be a consistent feature in terms of our capital allocation,” said Marroco.
“We have a massive business in the U.S. that we can use to sell [new products],” he said. BAT’s U.S. cigarette sales have fallen, driven by consumers switching to cheaper brands and cigarette alternatives such as heated-tobacco products. By 2035, BAT aims to have 50 percent revenue from alternative products.

March 18, 2024
Distributors Accused of Racketeering

Credit: Vitalii Vodolazskyi

New York City has filed a lawsuit in federal court charging four vaping product distributors and six persons associated with the companies for illegally selling flavored vaping products other than tobacco in the city. It is possible more companies will be added to the suit.

The civil lawsuit, filed Monday in the U.S. District Court for the Southern District of New York, claims the defendants violated “nearly every federal, New York State and New York City law applicable to the marketing, distribution, and sale of flavored e-cigarettes, the sales of which are prohibited under laws enacted by all three jurisdictions.”

Named in the suit are Magellan Technology Inc., Ecto World LLC (Demand Vape), Mahant Krupa 56 LLC (Empire Vape Distributors) and Star Vape Corp. Also named were Matthew Glauser, Donald Hashagen, Russell Rogers, Nikunj Patel, Devang Koya and Nabil Hassen. The suit also mentions Puff Bar, Elf Bar and Hyde products, however, those manufacturers were not named in the suit.

The lawsuit alleges the defendants committed mail and wire fraud, alongside violations of New York City’s Administrative Code, New York State Public Health Law, and the federal Tobacco Control Act. The city also accuses the companies of violating both the federal Racketeering Influenced Corrupt Organizations (RICO) Act and the Prevent All Cigarette Trafficking (PACT) Act.

The suit centers on disposable flavored vapes. However, the suit alleges that is seeking relief for any type of flavored e-cigarette product on the market. This would suggest the suit could grow into anyone entity that has sold flavored vaping products in the city.

“Although this action speaks principally about (flavored disposables), the favorite type of electronic nicotine delivery system among youth and the most intentionally directed to that market, the City seeks relief for defendants’ violation of laws applicable to e-cigarettes regardless of the type of device with which the violation is committed,” the suit states. “Any non-FDA approved [the FDA authorizes for marketing; it does not approve products] e-cigarette containing a flavored e-liquid is governed by the laws under which the City’s claims are brought and the City seeks relief with respect to all such devices.”

The city says it “seeks to recover monetary damages and civil penalties from the defendants, potentially totaling millions,” according to a press release. The suit also alleges the sales of disposable flavored vapes created a youth use crisis. The suit alleges the largest increase in youth use ever. The claim is unsupported by any facts.

“By distributing devices that provide larger than normal doses of nicotine in a mild aerosol formulated to reduce or eliminate the harshness of burning tobacco and tasting pleasantly of fruit, candy or desserts, [flavored vaping device] manufacturers and distributors have triggered the largest increases in youth nicotine use ever seen,” the suit claims.

The lawsuit states the city will seek triple the damages awarded at trial under the RICO guidelines.

July 11, 2023
Black Activists Split on Menthol Ban

Photo: New Africa

Black activists in New York are split on whether a menthol ban will be beneficial or harmful to the community, reports Gothamist.
One group, consisting of family members of those killed by police, including George Floyd’s brother and sister-in-law and Eric Garner’s mother, Gwen Carr. Garner was killed by police on Staten Island who were enforcing cigarette regulations.
“My son was a victim because allegedly he was selling ‘loosie’ cigarettes,” Carr said. “That’s what they’re going to do when they ban these cigarettes.”
“No more victims and no more violence,” she said, “and no ban on the menthol cigarettes.”
Another group gathered 30 minutes later and a block away supporting the ban. The group consisted of 40 clergy leaders and activists as well as Hazel Dukes, president of the NAACP New York State Conference and former president of the National NAACP.
“Our children are dying. Our kids think menthol is great. They think it’s bubblegum,” Dukes said. “Big Tobacco, you are getting out of our community.”
The proposed ban would expand current measures to include menthol-flavored products; a city council bill has been sponsored by 20 members and a state proposal from Governor Kathy Hochul is up for a vote.
According to New York public health officials, half of all adult smokers use menthol cigarettes, 86 percent of Black smokers smoke only menthol cigarettes, and 72 percent of Hispanic smokers smoke only menthol cigarettes. Black and Hispanic smokers make up a disproportionate number of smoking deaths in New York, according to state and federal data.
“Prohibition doesn’t work,” said Sylvia Miranda, executive director of the National Latino Officers Association. “The best way is through a medical model, not a criminal model.”
Supporters of the ban say it would specifically target retail sales and not personal consumption while critics fear the ban would ramp up policing in Black communities.
“Contrary to what the opposition is saying, read my lips: NYPD will not be involved,” said Council Member Rita Joseph, the main sponsor of the city council bill banning menthol-flavored tobacco products.

March 13, 2023
‘Tax Hike Will Kill Jobs and Boost Smuggling’

Photo: Tobacco Reporter archive

New York’s cigarette smuggling problem will get even worse if the state implements an additional levy of $1, as Governor Kathy Hochul envisions, according to a Wall Street Journal article.
The WSJ reports that more cigarettes are smoked in New York than are legally bought, suggesting considerable levels of tax evasion and avoidance. New York imposes a statewide pack tax of $4.35 per pack. New York City imposes an additional $1.50 per-pack excise tax.
Union workers have expressed discontent with the planned ban and tax hike. “Our union brothers and sisters in the tobacco industry are at risk of losing their jobs, benefits and pensions due to Governor Hochul’s proposed ban on menthol/flavored tobacco and tax hike,” Mike Smith, president of Local 810 International Brotherhood of Teamsters, said. According to Smith, 500 out of 4,000 drivers, warehouse workers and salespeople represented by Local 810 would lose their jobs if the ban is approved.
“While we understand the intent of the legislation is not to eliminate Teamster jobs or destabilize Teamster pension funds, the unfortunate reality is that those will be certain results,” Thomas Gesualdi, president of the Teamsters’ Joint Council No. 16 representing 25 locals and 120,000 members, said in a letter to Hochul early in February.
“I understand the impetus of the policy is to get people to stop smoking, which is a good thing,” Assembly Majority Leader Crystal Peoples-Stokes said. “But I think it shouldn’t be this selective. It goes way too deep … and would be a mistake, so I will be working to have it excluded.”

March 13, 2023
New York Clergy Oppose Menthol Ban

Photo: New Africa

Several clergy members from New York State have signed a letter opposing Governor Kathy Hochul’s proposed ban on flavored tobacco products, reports Spectrum News 1. The clergy members cite civil rights and criminal justice concerns that banning menthol cigarettes in New York would implicate.
“It is unjust to expect communities of color to choose between greater public health protections and basic civil rights,” they wrote in the letter. “We do not accept the premise that we must choose between the two, that these interests are mutually exclusive or that this debate is zero-sum. A working group consisting of social justice advocates and law enforcement leaders, along with other organizations, is the best solution available to bridge the current divide.”
Hochul’s proposal would also raise the per-pack tax on cigarettes by $1 to $5.35.
Clergy believe banning flavored tobacco would lead to unfair outcomes for people of color.
“Our collective primary interest is protecting the public, specifically communities of color, from abuse at the hands of both corporate influences and law enforcement,” they wrote. “We share the same belief as others that we can have a robust and productive debate that prioritizes both public health and criminal justice concerns.”
“To that end, we are requesting that any proposed ban on menthol cigarettes be withdrawn at this time and a working group convened with the set mission to offer recommendations for new legislation,” they wrote. “That working group must take into account all of our collective concerns and address the need for greater public health protections that do not compromise our constitutional and civil rights.”

February 17, 2023
Firms Settle New York Tax Evasion Case

Image: Rawf8

New York’s attorney general office announced a $50 million agreement with Grand River Enterprises Six Nations of Canada (GRE) and Native Wholesale Supply Co. (NWS) of New York to settle allegations of tax evasion in the state.
According to the complaint, the two companies brought millions of cartons of unstamped cigarettes into New York from Canada.
The attorney general’s office contends that NWS purchased cigarettes and tobacco products from GRE, imported them into New York, and distributed the cigarettes to retailers in the state—despite having no license to do so. GRE allegedly knew that the cigarettes it sold to NWS would be sold into New York without going through a New York state licensed stamping agent for prepayment of state taxes and would be neither stamped nor taxed as required by New York law.
“Hardworking New Yorkers pay taxes and so should multi-million-dollar companies,” said New York Attorney General Letitia James in a statement. “Regulating and taxing cigarettes is a critical tool to protect public health from the deadly dangers of tobacco. Today’s agreement enforces New York’s laws and will stop the overflow of unstamped cigarettes into New York.”
In addition to paying the $50 million, the companies agreed to modify their business practices to prevent future sales of unstamped cigarettes in New York.
In a statement, NWS clarified that while the settlement ends the litigation, it is not an admission of wrongdoing.
“In this almost decade-long dispute, the NY Attorney General claimed that sales of cigarettes by NWS to certain Native American Nations situated within the geographic borders of New York state were subject to New York state regulation and taxation. NWS, as well as the manufacturer of those products, GRE, vigorously objected to and adamantly denied such claims. As part of NWS’ Chapter 11 plan of reorganization, NWS allowed those claims to proceed in federal court in New York State.
“The settlement announced today brings an end to that litigation, without any admission of wrongdoing or liability by NWS or GRE. The settlement payments are to be paid solely by NWS and are not denominated as payment of back taxes. They are payments that the parties agreed are payments of disputed claims payable under the trust set up in accordance with the Chapter 11 plan of reorganization.
“NWS and GRE have at all times maintained and continue to maintain that the transactions at issue do not and did not violate any federal or New York State laws, particularly in view of well-established sovereign and treaty rights established with the federal government.”

September 13, 2022
NY May Verify Legal Age With Facial Recognition

Photo: zapp2photo

The New York State Senate is moving forward with proposed legislation that would allow bars and restaurants to use facial recognition or fingerprint scanners to verify customers’ ages before allowing them to buy alcohol, tobacco or electronic cigarettes, according to the New York Post.
“This is the new frontier of age verification,” said state Senator James Skoufis, who is sponsoring the biometrics bill. “It does advance the interests of convenience.”
Skoufis envisions that bars and restaurants could scan fingerprints, faces or retinas of customers who want to be spared the trouble of showing an ID when they return to an establishment in the future. The proposed legislation requires all data to be encrypted and prohibits businesses from selling biometric data to third parties.
“No one’s forced into engaging with this technology, but they would have the choice,” Skoufis said. “There’s no Big Brother involved.”
Age verification based on facial recognition technology is widespread in China, but has yet to catch on in Western countries, where critics have voiced concerns about consumer privacy.

April 25, 2022