Chinese e-cigarette maker Relx Technology has picked Citigroup Inc. for its planned initial public offering in the U.S., people with knowledge of the matter said.
Credit: RELX
The Shenzhen-based company, which counts Sequoia Capital among its backers, is seeking to raise as much as $1 billion in a share sale next year, said the people, who asked not to be identified as the information is private. Relx Technology may add more banks at a later stage, according to one of the people, according to an article in Bloomberg.
Deliberations for the potential IPO are at an early stage, and details such as size and timing may change, the people said. A representative for Citigroup declined to comment. A spokesperson for Relx Technology said “the market rumors are not true,” without elaborating.
Chinese companies are choosing to list in the U.S. at a rapid pace despite Congress approving legislation that could force firms to withdraw from American exchanges in a dispute over audit inspection rules. Mainland and Hong Kong firms have raised $14.8 billion through U.S. initial public offerings this year, the second-best year on record, data compiled by Bloomberg show.
The IPO plan comes on the heels of fellow e-cigarette device maker Smoore International Holdings Ltd.’s much sought-after Hong Kong debut share sale. Smoore raised HK$8.19 billion ($1.06 billion) in July after pricing its IPO at the top end of a marketed range. The share price has soared more than 300%.
How did the Loveland City Council go from discussing teen vaping to a ban on dozens of products legal for adult purchase? To get to the root of this controversy, I’ll refer to two positions regarding choice and responsibility.
The first position: As an adult, I can think for myself and make informed decisions. My body, my choice.
The second position: Adults are not capable of making good choices. We need to protect people from themselves.
We acknowledge alcohol and tobacco abuse lead to health issues. Yet society has decided to handle these products through health education and access restrictions, while respecting adults’ personal choices. Bans create black markets, and history has demonstrated suppliers will always find ways to provide what consumers want. Decreasing demands works better than decreasing supply.
Don Overcash / Credit: Loveland, Colorado
On Dec. 4, the House of Representatives voted for national marijuana legalization. The law doesn’t claim marijuana is free from health concerns, but that informed adults should be free to make a personal choice. Local governments will create access restrictions to protect kids, as they do with alcohol and tobacco.
Campaigns to ban or promote certain products often have catchy names and slick marketing strategies, and they are nationally organized and locally deployed for maximum effect. And there is nothing wrong with executing a well-developed plan.
However, the truth is often lost in the battle for public favor. The proven way to win is to use emotion, along with facts and logic selectively chosen to justify a position. Obfuscation is common. Campaign workers get paid to win. This is the nature of competition in the marketplace of ideas, each side using their power to shout their position. Citizens must sort out what is true and false.
Former New York City Mayor Michael Bloomberg and others have championed many “protect people from themselves” initiatives, including regulations on salt, firearms, vaping, tobacco, and even soft drink serving sizes. Bloomberg also supports the nonprofit “Tobacco-Free Kids.” Perhaps a margarita ban is on the horizon, given the drink’s combination of alcohol, sugar, and salt.
Most of these issues are handled by national or state bodies, such as the FDA, to avoid the unintended consequences and confusion that might result from a patchwork of local bans. Non-federal government bodies do have a role to play, however, in the distribution and sale of select products such as alcohol, tobacco, and — if nationally legalized — marijuana.
When the vaping topic first came before the Loveland City Council, the focus was on limiting access for kids without impeding adults’ freedoms, similar to restrictions on alcohol and tobacco.
I believe council members became wrapped up in anti-tobacco emotion without considering the very real impact a flavored tobacco ban will have locally. While the intent of the ban is to protect our kids, the task force and council have not considered its harsh impact on over 60 Loveland small businesses, their hundreds of employees, and our adult citizens’ freedom of choice. Any serious consideration would reveal these impacts, and council has fortunately delayed further discussion pending a more thorough investigation.
It is apparent this vaping debate has more to do with ideology than Loveland’s kids, given the recent false advertisements accusing three council members by name of being “for Big Tobacco” at the expense of our children. These advertisements were developed and paid for by Tobacco-Free Kids.
Yet every member of the council has clearly supported access restrictions for minors for tobacco, alcohol, and vaping products. The real challenge is how we can do so without impeding Loveland businesses, and without frustrating thousands of Loveland citizens who legally purchase these products. An outright ban is an issue for the FDA.
Councilor Wright bought us some time to consider all factors with a delay until February 2021. I believe an amendment to the proposed ordinance would be in the best interest of Loveland citizens. This amendment would include:
• License requirements for retail outlets.
• A minimum purchasing age of 21.
• An active enforcement policy, including penalties for violation.
• No restrictions on existing flavored tobacco products.
• Limiting sales to age-restricted stores and age-restricted partitions of large stores.
I believe in adults’ freedom of choice and protecting our kids.
Don Overcash is Loveland’s mayor pro-tem. He represents Ward IV on the City Council.
It’s been eight years since James Dunworth of the Ashtray Blog released his first “Vape Predictions.” The annual blog post started with just Dunworth making his own predictions but has grown into some of the leading players in the industry contributing.
This year, Dunworth asks 18 experts their views on the vaping industry outlook for 2021. The varied group of participants includes scientists, analysts, independent vaping media and business leaders. The outlook isn’t great. It’s also not the worst case scenario. AS could be expected, many of the experts see more regulation, taxation, flavor bans and bad science.
For the European Union, Clive Bates, who writes his own blog The Counterfactual and is the former director of Action on Smoking and Health said he believes the region will start to see more onerous regulations in 2021. “I’d be worried about broad flavours bans, ingredients regulation, plain packaging, restrictions on online sales and marketing,” he stated. “Also, possibly more onerous approval processes.”
In the U.S., the world’s largest vaping market, all eyes are on the U.S. Food and Drug Administration’s (FDA) premarket tobacco product applications (PMTA) that were due to the regulatory agency on Sept. 9. Niki Zhang, marketing director, for Smoore Technology, parent to the Vaporesso brand, states that the PMTAs will impact local manufacturers in terms of their product range, sales, and marketing.
“The FDA requires vape manufacturers to implement thorough scientific studies to prove their products are appropriate for the protection of public health, bringing vapers safer products and a better vaping experience,” states Zhang. “In the short term, only a few vape manufacturers can meet the scientific requirements, complexities, and expenses of the PMTA, which means there will be fewer products available. But, in the long run, vape manufacturers will be able to bring more quality and effective products into the market.”
The Malaysian government wants to reduce the number of smokers in the country by 15 percent by 2025. They are hoping to accomplish the goal through regulation and taxation, however, not by exploring less-risky nicotine products.
According to an article in The Sun Daily, previous measures such as raising taxes and the price of tobacco in a bid to reduce consumption had not only been ineffective, but also catapulted the growth of the illegal cigarette market.
During the third virtual Scientific Summit on Tobacco Harm Reduction 2020 in September, public health expert professor Sharifa Ezat Wan Puteh, was quoted saying that the tobacco harm reduction strategy could be used as an alternative solution. However, it would face many hurdles as it was still not well-received by Malaysians in general.
She said there were still concerns over the efficacy of non-tobacco nicotine products on top of the notion that e-cigarettes could increase smoking gateways among youths, adding that there was also the issue of no proper monitoring of tobacco alternative products, electronic nicotine delivery systems (ENDS) and heat-not-burn (HnB) products, such as IQOS.
At the moment, rules and regulations only cover the selling of nicotine products and are categorised under the Poison Act 1952. This clearly states that the supply and sale of any preparation containing nicotine is only allowed by licensed pharmacists and registered doctors for the purpose of treatment.
Sharifa was speaking as a panellist during the summit’s discussion titled “Tobacco Harm Reduction in low- and middle-income countries”, where she told the panel the government was taking a harder stand with its plan to introduce the standalone Tobacco Control Act to replace the Control of Tobacco Products Regulations 2004, which seeks to tighten control on all types of tobacco products.
Speaking on the sidelines, she told the newspaper the new act will deem nicotine products, including vapes and HNB devices, as tobacco products and will be enforced as such and likely to be totally banned. “This means only vape with non-nicotine e-juices will be allowed in the market,” she said. “This would only lead to less ‘safer choices’ for hard core smokers to transition to safer practices and options.”
She added that combustible cigarettes have been known to be more hazardous not only to the smoker themselves but also to those around them as opposed to the alternatives like vapes and HnB due to the lack of tobacco combustion. This, she said, was compounded with the large availability of contraband and illicit cigarettes that are abundant in the market at a low cost.
Sharifa also acknowledged there has been a visible dip in smoking prevalence in the country following its rigorous anti-smoking strategy nationwide. However, she said it could not be taken wholeheartedly since the authorities were unable to determine whether former users had switched to contraband cigarettes, vapes, HnB or that they had truly quit smoking.
“No proper study has been concisely implemented to look at the nature, but nicotine replacement therapy (NRT) is very common in Malaysia. However, implementation wise, it does have its concerns of access, lack of availability, and standardisation across urban and rural areas, and lack of trained health personnel in rural settings,” she said. “Many studies have shown that all types of nicotine products such as vapes, ENDS and NRT rate is curtailing persistent smokers are almost similar.”
The vapor industry continues to face several regulatory challenges. One of the most challenging of those is the seemingly never-ending battle against flavor bans for e-liquids. As most any vaper will tell you, flavors are instrumental in keeping former smokers from returning to combustible cigarettes. However, flavors are also what many industry regulators and anti-vapor advocates say lure youth to try vaping.
During Vape Live, a three-day virtual trade show and seminar hosted by Ireland-based Vapouround magazine, flavors and flavor bans in the United States, the world’s largest vapor market, were trending topics. Carlo Infurna Wangüemert, a vapor market analyst with ECigIntelligence, a regulatory research resource for the e-cigarette and tobacco alternatives industry, discussed recent market trends and the factors that are influencing the U.S. vapor market.
Wangüemert said that several factors are affecting the U.S. market: the e-cigarette or vaping use-associated lung injury (EVALI) scare, the Covid-19 pandemic and the U.S. Food and Drug Administration’s (FDA) premarket tobacco product applications (PMTAs). He said that Covid-19 didn’t impact market growth as much as it impacted consumer behavior.
Yael Ossowski / Credit: Consumer Choice Center
“We’ve seen a reduction of purchasing occasions and an increase of basket sizes [during the Covid-19 crisis],” he said. “We’ve also observed consumers buying a lot before the crisis in order to have enough stock in case of lockdowns, and it might also have affected the supply side as many independent shops had to close or have suffered an important drop of sales.”
Concerning supplies, Wangüemert sees the PMTAs drastically reducing the amount of variety on the market as many brands will try to keep their offerings as simple as possible. Before the FDA’s ban on prefilled flavored vape pods, those products represented half of the U.S. vapor market. Now, there is a rise in disposable e-cigarettes and refillable pod systems, according to Wangüemert. He said that this has led to several innovations in flavor output, such as better coils in open pod systems.
“Basically, hardware manufacturers are trying to develop new features and improving the functionality of their devices to make them small but complex enough to cover all vapers’ needs,” said Wangüemert, citing innovations that allow vapers to change temperature or change from mouth-to-lung to direct-to-lung with just one button as examples.
Refillable pod systems are the fastest-growing trend in the vapor industry, according to ECigIntelligence data. This is because they offer a larger selection of flavored e-liquids. Prefilled pods, however, are dropping because the only available flavors, tobacco and menthol, generate less complexity.
“Prefilled pods … show fairly well how regulation can have an impact on the market,” he said. “This ban is fully enforced online as only those two flavors are offered currently. We’ve observed an ongoing drop in the complexity of their flavors. Tobacco is [now] probably the most important flavor in prefilled pods.”
The U.S. market has also seen a surge in nicotine strengths, brought on mostly by the growing popularity of nicotine salts. Wangüemert said that nicotine salt-based e-liquids have been continually gaining ground during the last three years to the detriment of freebase liquids. “However, it is also interesting to point out that the average nicotine strength of nicotine salts is slowly going down,” he said.
Fruit flavors are also steadily rising in the U.S. market, according to Wangüemert. He said that fruit e-liquids, dessert and candy flavors all consume the Top 5 positions in flavors for e-liquid sales in 2020. “For the fruit category, which is mainly tropical fruits, mainly mango, are the ones helping the most in the growth of that category,” he said, adding that beverage flavors are also growing quickly, with lemonades experiencing a substantial amount of growth. “This might also be linked to the popularity of fruits, as lemonades are likely to contain them,” he explained.
Carlo Infurna Wanguemert / Credit: ECigIntelligence
Looking at tobacco and menthol flavors, Wangüemert explained that e-liquids containing tobacco generally have tobacco as the main flavor. However, menthol is much more popular as a complement to other flavors, such as fruit.
“Only 13 percent of the products that contain menthol have menthol as the main flavor. But [for] the other 87 percent, menthol is a complement or a cooling agent, being particularly popular in the fruit category,” he said. “Of course, these 87 percent of e-liquids that contain menthol that do not have it as the main flavor are more subject to potential bans than menthol-only flavors, which have been already excluded. However, our 2019 vape shop survey points out that menthol and tobacco represent just a small percentage of vape store revenues, meaning that flavor bans at the state level or even the consequences of the PMTA might strongly reduce their income and the vaping market in general as the offerings and variety of e-liquids were strongly reduced.”
Also speaking during Vape Live, Yael Ossowski, deputy director for the Consumer Choice Center (CCC), a consumer advocacy group, said that flavor bans in many U.S. states have had a major impact on the growth of the vapor market. States with strict flavor bans have seen major declines, with many vapers in those states returning to combustible products.
This prompted his organization to rank states by vaping regulations and the impact those regulations had on the vapor market. The group looked at how all 50 states confronted flavor restrictions, taxes and whether the state allowed for online sales. The CCC gave each state a number of points depending upon how much consumers were subject to the criteria. States that scored between 0–10 points received an F, 11–20 points received a C and 21–30 points received an A.
The states best suited for vaping were colored green on the corresponding chart while the worst states were colored red and middle-ground states were colored yellow. “For green states, we’ve got South Carolina, Georgia; we’ve got Iowa, Virginia, Florida, Texas and Oregon. You’ll notice, obviously, the red states, the places where we’re dealing with partial flavor bans, high taxes, shipping restrictions, there’s six of them.
Places like California, New York. You have New Jersey, Massachusetts, Rhode Island and Illinois,” said Ossowski. “Now we have our states in yellow. These are places that had a flavor ban in the past, and perhaps they’ve gotten rid of it, or it has not yet come into force. You have some taxation. It’s probably a bit more moderate than definitely those red states. And it has fewer shipping restrictions. People are able to order their vaping products online.”
One of the worst states, New York, has a tax rate of 20 percent of the retail price. Online sales are banned and all flavored products, except tobacco and menthol, are banned. These states, with low rankings, are also prone to other negatives for the vapor market, such as a growing black market, according to Ossowski.
California also has a statewide ban that is supposed to go into effect on Jan. 1, 2020. California also has several cities, such as San Francisco, that have banned vapor products entirely. It should be noted that, in California, flavor bans typically are only focused on nicotine vapor products, not marijuana vapor products. This is especially puzzling since the U.S. Centers for Disease Control and Prevention (CDC) has stated that the EVALI lung disease scare was caused by black market marijuana vapor products, not nicotine products.
“There is a lot of work that has been done by some very enterprising young journalists that kind of details everything with the black market when it comes to flavored vaping products. And that’s only just now burgeoning up in New York,” Ossowski explained. “There could be a lot more on this. We’re going to see. There’s not the biggest mainstream coverage on this.”
Credit: Consumer Choice Center
One of the main reasons that the CCC compiled the data and ranked the states is that the consumer group doesn’t want other states to follow behind states like California and Illinois by banning or restricting flavored vapor products. Ossowski said that these bans are detrimental to public health.
“It’s very dangerous. And in a way, by making it more expensive and pushing people often to the illegal market, not only are you seeing your price go higher, you’re also making it more difficult for people to acquire the products that they have transitioned away from tobacco to use. And we thought we’d actually be saving their lives and improving their lives. But what we see more often than not is that legislators make it harder,” he said. “They make it more difficult, and they actually put way more cumbersome barriers in the way so that you and I cannot access those products. We really do need to concentrate on laws, on policies, on studies, on figuring out who are the legislative champions that we can turn to in state legislatures or in the federal bureaucracy to be able to ensure that we have better laws that will enable harm reduction, that will enable us to continue to have vaping products for sale.”
South Africa’s ban on vaping and tobacco sales during the country’s hard lockdown earlier this year was unconstitutional, the country’s High Court ruled Dec. 11.
From March to August, the government prohibited sales of tobacco products and alcohol to help stem the spread of the coronavirus. Market leader British American Tobacco South Africa (BATSA) and smaller companies united in the Fair-trade Independent Tobacco Association (FITA) challenged the ban, arguing that a short-term ban on a product whose health risks become evident only in the long run makes no sense.
They also questioned the rationale of the argument around cigarette sharing. Tobacco shortages and high prices of black-market cigarettes would only increase the likelihood of smokers sharing their “stompies,” the tobacco companies said.
The government lifted the ban before the matter had been heard in court, but BATSA decided to proceed with the court action to prevent the ban from being reintroduced at a later stage of the pandemic.
In its ruling Friday, the Western Cape High Court judges who presided over the case said Regulation 45, which Minister Nkosazana Dlamini-Zuma relied upon for the ban, “cannot and does not withstand constitutional scrutiny.”
In court, the government had argued that the ban was aimed at reducing the occupation of intensive care unit beds by smokers. If people didn’t vape or smoke, they would likely not get Covid-19 in a more severe form, it argued. But BATSA maintained the government had not justified the ban in law or science.
Tobacco companies expressed satisfaction with Friday’s ruling.
“British American Tobacco South Africa has been vindicated in its view that the disastrous ban on tobacco sales was unjustified and unconstitutional after the Western Cape High Court ruled in its favor,” the company wrote in a press release.
“The five-month ban on tobacco and vapor products sales was ill-considered, unlawful and has worsened the illicit trade in cigarettes and vapor products in the country.”
“We note and welcome the judgment of the full bench of the Western Cape High Court, wrote FITA in a statement.
“The court further found Regulation 45 to be neither necessary nor that it furthered the objectives set out in section 27(2) of the Disaster Management Act. This, of course, was one of the arguments advanced by FITA in its challenging of the ban on the sale of cigarettes and tobacco-related products, which the full bench of the North Gauteng High Court erred in finding same to be necessary.”
In the wake of the court ruling, BATSA also renewed its call for South Africa to urgently ratify the World Health Organization Illicit Trade Protocol to eradicate the illegal sale of cigarettes. The company stated that ratifying the protocol is “the only way for the country to claw back tax losses resulting from the explosion in illicit trade that occurred during the ban on tobacco and vapor products.”
In July, BATSA estimated that the ban on legal cigarette sales had cost South Africa ZAR4 billion ($241.7 million) in lost excise tax revenues and 30,000 lost industry jobs.
The health warnings for e-cigarettes and other vapor products should be different from warnings on combustible cigarettes, according to a health expert. Indonesian professor and medical expert Tikki Pangestu sought a distinction on the health warnings during the second Philippine Harm Reduction Online Forum held by Harm Reduction Alliance of the Philippines recently.
Photo: Vchalup | Dreamstime.com
“Health warnings on combustible cigarette packs should not be the same as those on the packaging of e-cigarettes and HTPs (heated tobacco products). This is because e-cigarettes and HTPs have been shown to be 90- to 95-percent less harmful than combustible cigarettes,” said Pangestu, visiting professor at the Yong Loo Lin School of Medicine at the National University of Singapore and former director for research policy and cooperation of the World Health Organization, according to an article in The Manila Times.
The implementing rules and regulations of Republic Acts 11346 and 11467 mandate the Department of Health to issue health warning templates for HTPs and vapor products. Pangestu said the health warnings should be “proportionate to the risk of smoke-free products.”
He suggested that health warnings could state that HTPs or vapes, while not free from harm, are “significantly less harmful” than combustible cigarettes.
“The health warnings could also indicate that smoke-free products are for adults only and should not be used by the youth,” Pangestu said. “There are many factors to be considered in developing regulations but in my view, such regulations must be based on the science and evidence around smoke-free products.”
Officials with the Greenville County school district say the school system will file a lawsuit against the makers of Juul e-cigarettes for “targeting its products to school-age children.”
Credit: Insurance Journal
The Greenville County Schools board of trustees voted on Tuesday to hire the Halligan, Mahoney & Williams law firm in Columbia to represent the district on the lawsuit, according to the Greenville News.
“This week, the Board of Trustees voted to protect the health and safety of students. We agreed to pursue legal action against the makers of Juul e-cigarettes for purposely targeting its products to school-age children and the impact that it has had on the School District and its students,” board chairwoman Lynda Leventis-Wells said in a written statement to The Greenville News.
The lawsuit will join dozens of others filed in northern California as part of multidistrict litigation against Juul Labs Inc. Lexington County School District One filed a lawsuit against the company in October that claims Juul’s strategy was “to create a nicotine product that would maximize profits through addiction.”
Quebec intends to ban the sale of flavored vaping cartridges and e-liquids. The Canadian city also wants to limit nicotine content after a public health report warned of a major increase in youth vaping in the province.
Credit: Aurore Duwez
“With the growing popularity of vaporization products, especially among young people, it becomes imperative to act to prevent a new generation from becoming addicted to nicotine because of these products,” Health Minister Christian Dubé said Wednesday in a statement.
In 2015, Quebec banned the sale of flavored tobacco products and saw a reduction in the number of high-schoolers smoking such products within 30 days. Similar action should be taken with regard to vaping, the public health researchers recommended.
The U.S. Food and Drug Administration (FDA) has given an acceptance letter to the UK-based e-liquid manufacturer Riot Squad for its premarket tobacco product application (PMTA), the company confirmed today.
“We continue to move through the PMTA process and are very happy to get to this stage”, said Ben Johnson Riot Labs CEO. “We remain committed to working with the FDA throughout the process. With our award-winning products and flavors we continue to provide better alternatives to combustible tobacco products and look forward to working in this industry for many more years to come.”
The company confirmed that it had submitted PMTAs for seven flavors in three freebase nicotine strengths (0mg, 3mg and 6mg) and 2 nicotine salt strengths (20mg Hybrid and 48mg). The flavors submitted include:
Pink Grenade
Sub Lime
Tropical Fury
Blue Burst
Cherry Fizzle
Rich Black Grape
Ultra peach Tea
“Receipt of this acceptance letter is a significant milestone, which confirms that Riot Labs products have now met the statutory and regulatory requirements for a PMTA submission, based on Section 910 of the FD&C Act,” a press release states. “The application is now under preliminary scientific review, before going forward to substantive review by the FDA.”
The FDA requires applicants to show their products are appropriate for the protection of public health. Riot Labs began building its PMTA data in 2018. The process has taken over 2 years, with 7 applications and over 1.8 million pages of scientific data submitted, according to Johnson.
Riot Labs was established in 2016 by Johnson who has an extensive background in pharmaceuticals. He set out to build ‘Riot Squad’ into an innovative brand, with the aim of encouraging consumers to find the confidence to give up smoking and engage in a healthier alternative. Riot Squad products are now available in over 86 countries.
