Author: Staff Writer

  • Three More Companies Granted Stays in MDO Lawsuits

    Three More Companies Granted Stays in MDO Lawsuits

    Credit: Pixelbliss

    The 11th Circuit Court of Appeals granted the stays to Diamond Vapor, Johnny Copper and Vapor Unlimited. The ruling was in conjunction with Bidi Vapor’s stay. The 11th Circuit handles petitions for review from vaping businesses based in Florida, Georgia and Alabama. All four companies are based in Florida.

    The decision allows the companies to continue selling their tobacco harm reduction products while the lawsuits remain active. A three-judge panel heard motions from the businesses and granted the stays by a 2-1 vote. The stays don’t guarantee that the companies will succeed in their challenges to the FDA denials, but they are an encouraging sign, according to Azim Chowdhury, a partner with Keller & Heckman law firm. He said courts usually grant stays only if the plaintiff’s case has a good chance of “succeeding on its merits.”

    More than 30 companies have now sued the FDA and many of those appeals will be heard in federal courts over the next few weeks. No decisions have yet to be handed down, and early decisions could affect later ones, according to several attorneys. If there are conflicting decisions in multiple courts, the FDA’s PMTA process could eventually wind up being sorted out by the Supreme Court, according to Chowdhury.

  • Massachusetts: Flavor Ban Pushes Sales Next Door

    Massachusetts: Flavor Ban Pushes Sales Next Door

    Credit: Aboltin

    Massachusetts’ ban of flavored tobacco products is not the success its proponents make it out to be, according to Ulrik Boesen of the Tax Foundation.

    While a study published in JAMA Internal Medicine found that the sale of flavored tobacco in Massachusetts decreased more than in 27 control states in the wake of the state ban, the authors failed to consider the impact of cross-border trade.

    According to Boesen, increased sales in neighboring New Hampshire and Rhode Island almost completely made up for the decrease in Massachusetts.

    “The end result of the ban, in fact, is that Massachusetts is stuck with the societal costs associated with consumption, while the revenue from taxing flavored tobacco products is being raised in neighboring states,” Boesen wrote on the Tax Foundation’s website.

    Looking at the New England region as a whole confirms that the flavor ban did not work as intended, according to Boesen. “Sales moved around rather than disappeared, and the ban evidently did not impact consumption,” he wrote. “Total sales for the region decreased by slightly more than 1 percent comparing the 12 months preceding the ban to the 12 months following the ban—largely comparable to the national sales trends.”

    Last year, a study by the New England Convenience Store and Energy Marketers Association (NECSEMA), found excise tax lost income in Massachusetts from selling fewer menthol cigarettes alone amounted to $62 million in the first six months of the ban. No specific figures were given for electronic nicotine delivery systems in the release for that study.

    The previous study also found that losses simply transferred to Massachusetts’ neighboring states. Cigarettes excise tax stamp sales dropped 23.9 percent in Massachusetts while New Hampshire gained $28,574,340 or 29.7 percent. Rhode Island gained $12,100,000 or 18.2 percent in excise taxes.

    The previous study’s estimated Massachusetts loss including the sales tax is $73,008,000 while Rhode Island saw a gain of $14,066,740.

    As the U.S. Food and Drug Administration and other states consider Massachusetts’ example, Boesen urges lawmakers to think twice before banning flavored tobacco products. “The experience out of Massachusetts has not been a success story and other states should be wary of conducting their own expensive experiments,” he wrote.

  • Court of Appeals Stays Bidi Vapor Marketing Denial Order

    Court of Appeals Stays Bidi Vapor Marketing Denial Order

    The U.S. Court of Appeals for the Eleventh Circuit has stayed the marketing denial order (MDO) issued by the U.S. Food and Drug Administration to Bidi Vapor in September 2021. The FDA had previously issued an administrative stay to Bidi Vapor, however, the agency rescinded that stay in December.

    The Feb. 1, 2022, ruling allows Bidi Vapor and Kaival Brands to market and sell all of its Bidi Stick electronic nicotine-delivery systems (ENDS), including its tobacco, menthol and flavored products, while Bidi Vapor continues with its merits lawsuit compelling the FDA to place Bidi Vapor’s premarket tobacco product application (PMTA) for the flavored ENDS back under scientific review.

    With the judicial stay decision going in favor of Bidi Vapor, the company expects many distribution partners to reestablish their previous sales volumes, with potentially new distribution chains added as well.

    “We expect this judicial stay will result in a rebounding of Bidi Stick sales,” said Niraj Patel, president and CEO of both Kaival Brands and Bidi Vapor, in a statement. “Many wholesale and retail partners had discontinued or slowed purchases of the Bidi Stick until we heard back from the courts on the likelihood of our merits case succeeding. This is what our wholesale and retail partners have been waiting for.”

    “We believe that Bidi Vapor has developed substantial, robust and reliable scientific evidence through, among other things, surveys, behavioral studies and clinical trials establishing support that the product is appropriate for the protection of the public health,” Patel said. “Following on FDA’s initial administrative stay of the MDO, we believe that this recent judicial stay is a good indication that the court finds some merit in Bidi Vapor’s arguments and puts Bidi Vapor’s PMTA one step closer to being properly and fully evaluated by FDA. We are extremely pleased with the court’s decision on this judicial stay order and continue to expect to be successful on the merits case as well.”

    “The company believes that this decision signals a new milestone in the path toward providing adult smokers 21 and older with a viable alternative to combustible cigarettes. Distributors, wholesalers, retailers and adult consumers are all anxious to see positive outcomes not just for Bidi Vapor, but for the vaping industry as a whole. We believe in science-based regulation of ENDS and hope the courts will require FDA to adhere to the law as it reviews Bidi Vapor’s PMTAs,” Patel said.

  • South Africa Public Comment Period on Vape Tax Ends Soon

    South Africa Public Comment Period on Vape Tax Ends Soon

    South Africa
    Credit: Tim Johnson

    South Africa’s National Treasury (SANT) says the public comment period on its proposals to impose a specific excise tax on both the non-nicotine and nicotine e-liquids for vaping products will end on Feb. 7, 2022. The SANT published a draft discussion paper in December 2021 on the proposed taxation of electronic nicotine delivery systems (ENDS) and electronic non-nicotine delivery systems (ENNDS).

    Traditional tobacco products in South Africa are subject to excise duties at a rate of 40 percent of the price of the most popular brand in each tobacco category, according to Longevity. When applied to e-cigarettes, users could pay excise duty ranging from ZAR33.60 to ZAR346.00 ($22.50) per product, depending on the nicotine content and size of that product. The average excise rate for e-cigarettes is proposed at ZAR2.91 per mL and apportioned in a ratio of 70:30 between nicotine and non-nicotine elements.

    Basically, users could pay ZAR2.03 per mL of e-liquid containing nicotine and 87 cents per mL of e-liquids that contains no nicotine, if the draft proposals are accepted and become legislation. Products with a higher nicotine content will attract a higher rate of duty compared with lower nicotine products.

    Manufacturers and importers who become liable for the proposed excise taxes on e-cigarettes will need stringent certifications by accredited laboratories, which use either South African National Accreditation or International Laboratory Accreditation Co-operation (ILAC) approved methodologies.

    According to 2021 study commissioned by the Vapor Products Association of SA, the vapor industry in 2019 contributed ZAR2.49 billion to South Africa’s GDP while paying ZAR710 million in taxes. More than 350,000 South Africans use vapor products.

  • Israel: Knesset Finalizes Modified Version of Vapor Tax

    Israel: Knesset Finalizes Modified Version of 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.”

  • Halo Granted USPS Exemption for Mailing Vape Products

    Halo Granted USPS Exemption for Mailing Vape Products

    Pure Labs, parent to the Halo brand of vaping products, is now approved by the U.S. Postal Service (USPS) to ship e-liquid and other vaping products to compliant businesses through the brand’s Master Distributors; Syndicate Global Distribution and Halo Wholesale Direct, according to a press release.

    The approval allows both Syndicate Global Distribution and Halo Wholesale Direct to ship Halo products, categorized as electronic nicotine delivery systems (ENDS), as a business and regulatory exception to the PACT (Prevent All Cigarette Trafficking) Act.

    The original PACT Act (2009) was amended by Congress on December 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. “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 #1 tobacco-flavored e-liquid brand”.

  • Korea: E-Cigs Gain Ground as Combustibles Stagnate

    Korea: E-Cigs Gain Ground 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.

  • Philippine Vaping Bill Heads to President Duterte’s Desk

    Philippine Vaping Bill Heads to President Duterte’s Desk

    Photo: Oleksii

    The Philippine House of Representatives and Senate have ratified a vaping bill that critics describe as too industry friendly. The legislation will now be forwarded to President Rodrigo Duterte for his signature.

    Among other provisions, the bill transfers regulatory powers from the Food and Drug Administration to the Department of Trade and Industry (DTI) and lowers the legal purchase and consumption age for vapor products from 21 to 18. The DTI is also in charge of setting technical standards for the safety, consistency, and quality of these smoking alternatives.

    Philippine College of Physicians (COP) President Maricar Blanco-Limpin said he was particularly concerned about the lower vaping age. “We have been telling all the legislators that making these more available at a younger age is making these e-cigarettes and heated tobacco products more available to all including the non-smokers,” she told CNN Philippines.

    Limpin said vape products could lead to health concerns and the “mandate to protect the health of the country falls under the FDA, not the DTI.”

    If the President signs the measure, Blanco-Limpin said the COP would consider all actions, including bringing the issue to the Supreme Court.

     

  • FDA Seeking Applicants for New CTP Director

    FDA Seeking Applicants for New CTP Director

    Credit: Sean Locke Photography

    The U.S. Food and Drug Administration is now accepting applications for the position of director, Center for Tobacco Products (CTP). The current director, Mitch Zeller, plans to retire in April.

    The CTP director is responsible for planning, managing, directing and coordinating major tobacco program objectives to implement the Tobacco Control Act and related regulations.

    This senior-level FDA position advises the FDA Commissioner, senior FDA officials and others on all matters involving tobacco product regulation that have an impact on policy development and execution and long-range program goals. The director develops and executes the strategies for compliance outreach, enforcement, regulations and guidance formulation, science-based application review and other product regulation activities.

    The individual selected for this position will represent the agency and establish/maintain relationships in meetings and conferences with top level FDA and Health and Human Services officials, national industry representatives, members of Congress, counterparts from federal, state, local and foreign governments.

    Candidates must complete their applications by 11:59 p.m. on Feb. 25, 2022.

  • Lil Hnb Supplier Inducted Into Korea Brand Hall of Fame

    Lil Hnb Supplier Inducted Into Korea Brand Hall of Fame

    Photo: KT&G

    KT&G’s Lil heat-not-burn device has been named as an excellent e-cigarette brand in the Korea Brand Hall of Fame for the fourth consecutive year.

    Supervised by South Korea’s Industrial Policy Research Institute, the Korea Brand Hall of Fame is an annual award event that selects the brands most loved by consumers.

    Launched in 2017, Lil has been well received by the consumers, who bought more than 1 million units in the first year.

    After this initial success, KT&G released line extension such as Lil Plus, Lil Mini, Lil Hybrid and Lil Solid. By 2021, the cumulative sales of Lil exceeded 4 million units in Korea alone.

    Lil performed well internationally, too. In January 2020, KT&G signed a supply contract with Philip Morris International, for overseas marketing and sales of Lil, which subsequently secured a bridgehead for expansion in the global cigarette market.

    KT&G started selling Lil in Russia, Ukraine and Japan in 2020, followed by product launches in Central Asia and Europe. In November 2021, KT&G launched Lil in Guatemala. Today, KT&G exports Lil to 23 counties.

    “We built the brand Lil on the identity of ‘practical minimalism’ together with systematic technological innovation,” said Lim, Wang-seop, head of KT&G’s next-generation product business unit, in a statement. “We’ll make the brand recognized by the world consumers through developing the products that meet their needs and tastes.”