Author: Timothy Donahue

FDA Issues Civil Penalties to 21 Small Business Owners

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The U.S. Food and Drug Administration has issued complaints for civil money penalties (CMPs) against 21 brick-and-mortar retailers for selling unauthorized Esco Bars e-cigarettes.
In a press release, the agency stated that it had previously issued each retailer a warning letter for their sale of unauthorized tobacco products. However, follow-up inspections revealed that the retailers had failed to correct the violations.
The agency now seeks the maximum penalty of $20,678 from each retailer.
The complaints announced today represent the first set of CMPs FDA has filed for the sale of unauthorized Esco Bars e-cigarettes. “These retailers were duly warned of what could happen if they continued selling these unauthorized e-cigarettes,” said Brian King, director of the FDA’s Center for Tobacco Products (CTP). “They should have acted responsibly to correct the violations, but they chose not to do so and now must face the consequences of that decision. FDA won’t sit back and tolerate inaction to comply with the law.”
Currently, $20,678 is the maximum civil money penalty amount FDA can seek for a single violation from each retailer, consistent with similar CMPs sought against retailers for the sale of unauthorized Elf Bar products in Sept., Nov., and Dec. of 2023.
The retailers can pay the penalty, enter into a settlement agreement based on mitigation factors, request an extension of time to file an answer to the complaint, or file an answer and request a hearing. Retailers that do not take action within 30 days after receiving a complaint risk a default order imposing the full penalty amount, according to the release.
“Today’s CMP actions are just the latest in the continued, comprehensive push by FDA to take action across the supply chain to remove unauthorized e-cigarettes, particularly those that are popular among youth, from the marketplace,” the release states. “As of Jan. 30, 2024, FDA has issued more than 440 warning letters and 88 CMPs to retailers, including brick and mortar and online retailers, for selling unauthorized tobacco products.
“In addition to actions involving retailers, FDA has issued more than 660 warning letters to firms for illegally manufacturing and/or distributing unauthorized new tobacco products, including e-cigarettes.
“The agency has also filed civil money penalty complaints against 48 e-cigarette firms for manufacturing unauthorized products and sought injunctions in coordination with the U.S. Department of Justice against seven manufacturers of unauthorized e-cigarette products.”
January 30, 2024
Kaival Brands Appeals MDO of Tobacco Bidi Stick

A recent marketing denial order issued for a tobacco-flavored Bidi Stick only applies to one Bidi device. The company, Bidi Vapor, currently has 10 other flavors still in the U.S. Food and Drug Administration’s premarket tobacco product application (PMTA) process.
Bidi Vapor’s “Classic” tobacco-flavored Bidi Stick ENDS device is the only product affected. Kaival Brands, parent to Bidi Vapor, holds the worldwide license to distribute products made by Bidi Vapor.
In response to the MDO, Bidi Vapor filed a petition requesting that the U.S. Court of Appeals for the 11th Circuit review the MDO, which Bidi Vapor believes was, among other things, “arbitrary and capricious, in violation of the Administrative Procedure Act.” Bidi Vapor will also be seeking a stay of the MDO pending the outcome of the litigation.
“Bidi Vapor disagrees with the FDA’s decision and is taking immediate action accordingly,” said Niraj Patel, the founder and CEO of Bidi Vapor and Chief Science Officer and founder of Kaival Brands. “In the meantime, it is important to note that the decision only affects the ‘Classic’ or tobacco-flavored Bidi Stick. The remaining ten Bidi Stick flavors are still under FDA scientific review and remain in distribution in the United States through Kaival Brands, subject to the FDA’s enforcement discretion.”
Bidi Vapor has a history of successful outcomes when contesting adverse FDA decisions, having received a favorable 11th Circuit ruling in August 2022 that set aside the original MDOs received for its 10 non-tobacco flavored products, according to a press release.
“While we are disappointed with the FDA’s decision, we are in close contact with Bidi Vapor and laser-focused on selling the Bidi Vapor products that we are permitted to,” said Barry Hopkins, executive chairman of Kaival Brands. “Like Bidi Vapor, we are fully committed to the legal and responsible use of our products. Moreover, we are committed to increasing Kaival Brands’ revenues by strengthening our existing business and also diversifying our product portfolio, as evidenced by the intellectual property we acquired in May 2023 from GoFire, Inc.”
January 29, 2024
Kaival Brands Group Announces Reverse Stock Split
Photo: Kaival Brands Innovations Group
Kaival Brands Innovation Group, the parent to Bidi Stick vaping products, announced a 1-for-21 reverse stock split that became effective at the opening of trading today, Thursday, January 25.
It’s not the first time the company has made such a move. In 2021, when the company applied to list on NASDAQ, the company implemented a 1-for-12 reverse split of its common stock, effective before the opening of the market on July 20. As a result of that reverse split every 12 shares were exchanged for one share of the common stock.
Kaival Brands’ Common Stock will continue to trade on the Nasdaq Capital Market under the symbol KAVL. The new CUSIP number for the Common Stock following the Reverse Stock Split will be 483104402.
The company’s board approved the Reverse Stock Split. The material effects of the Reverse Stock Split are:

Every 21 shares of the issued and outstanding Common Stock has been combined into one (1) share of Common Stock.
The number of outstanding shares of Common Stock has been proportionally reduced from 58,661,090 shares to approximately 2,793,386 shares.
The Reverse Stock Split will not reduce the total number of Kaival Brands’ authorized shares of Common Stock.
The ownership percentage of each Kaival Brands stockholder will remain unchanged, other than as a result of fractional shares. No fractional shares of Common Stock will be issued in connection with the Reverse Stock Split. Stockholders that would hold a fractional share of Common Stock as a result of the Reverse Stock Split will have such fractional shares of Common Stock rounded up to the nearest whole share of Common Stock.
The number of shares of Common Stock available for issuance under the Company’s equity incentive plans and the Common Stock issuable pursuant to outstanding equity awards and common stock purchase warrants immediately prior to the Reverse Stock Split will be proportionately adjusted by the ratio of the Reverse Stock Split. The exercise prices of such outstanding options and warrants will also be adjusted in accordance with their respective terms.
“Among other considerations, the Reverse Stock Split is intended to assist in bringing Kaival Brands into compliance with the $1.00 minimum bid price requirement for maintaining the listing of its Common Stock on the Nasdaq Capital Market, and to make the prevailing prices of the Common Stock more attractive to a broader group of institutional investors,” a press release states.
Stockholders owning shares via a broker, bank, trust or other nominee will have their positions automatically adjusted to reflect the Reverse Stock Split, subject to such broker’s particular processes. Such stockholders will not be required to take any action in connection with the Reverse Stock Split.
January 25, 2024
Ohio Veto Override Bans Local Tobacco Rules
Credit: Lucitanija
Local governments in Ohio cannot enact tobacco and nicotine rules. Those regulations must come from the state level.
The Ohio Senate on Wednesday voted to override Gov. Mike DeWine’s veto on a provision prohibiting local governments from enacting regulations on the sale of tobacco — including by banning flavored vaping products.
The policy, which will go into effect in three months, means that newly enacted flavored tobacco bans in Columbus, Worthington and other central Ohio cities cannot be enforced.
Republican state lawmakers have tried multiple times to prohibit local governments from restricting the sale of tobacco, only to be thwarted by DeWine’s vetoes.
In 2022, he struck down such a proposal. Last July, he struck the provision from the rest of the state budget, saying that local bans were “essential” to curb nicotine use, especially among children, without a statewide ban in place.
January 25, 2024
Most Defendants Dropped From NJOY Vape Suit

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A U.S. District Court in California has dismissed a lawsuit filed by NJOY, the vape subsidiary of Altria Group, against multiple manufacturers, distributors, and retailers of disposable vapes. However, the case against IMiracle, the manufacturer of Elf Bar, has not been dismissed.
NJOY filed the lawsuit last October. The company alleges that the companies named in the suit are selling products illegal in California and the United States. NJOY asked for a nationwide injunction that would prevent future importation and sale of the products, and compensatory and punitive damages paid to NJOY.
Among the companies charged were manufacturers and distributors of Breeze, Elf Bar, Esco Bar, Flum, Juice Box, Lava Plus, Loon, Lost Mary, Mr. Fog and Puff Bar. Together the brands make up the majority of the U.S. disposable vape market.
The dismissal order was entered on Jan. 18 by Judge Terry J. Hatter Jr. of the U.S. District Court for the Central District of California. The court found that the defendants did not participate in “the same transaction, occurrence, or series of transactions or occurrences,” and therefore were improperly joined in the lawsuit. Because of that, Judge Hatter dropped all parties from the suit except the first named defendant, IMiracle, according to media reports.
The judge entered the orders “without prejudice” allowing NJOY to refile against the dismissed defendants individually or in smaller groups with demonstrable relationships. The court also dismissed NJOY’s claim of unfair competition and its motion for a preliminary injunction barring sales and distribution by the defendants.
The court denied NJOY’s motion to serve IMiracle, the manufacturer of Elf Bar headquartered in Hong Kong, by email, citing an established international process, the Hague Convention, for serving legal notice to foreign defendants.
NJOY’s lawsuit against IMiracle cannot proceed until the Chinese manufacturer is served notice.
January 24, 2024
Cigarette, Vape Sales Slow While Pouches Boom

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Sales of cigarettes and e-cigarettes have declined in the last two weeks, while sales of oral nicotine pouches have seen significant growth, according to analysts at TD Cowen.
They say in a research note that cigarette volumes across multiple channels were down 10 percent in the two weeks ending Jan. 13, a steeper decline than the trailing four weeks and 12 weeks.
Bonnie Herzog, managing director at Goldman Sachs, remain cautious on the U.S. tobacco/nicotine industry in the near term as the tobacco consumer remains under substantial financial pressure.
She stated in an email that many consumers are being more selective in their purchases and turning to more affordable alternatives, such as 4th tier/deep discount cigarettes, modern oral tobacco and, increasingly, illicit or gray market disposable vapor products.
“Shifts in category and consumer spending dynamics have been further exacerbated by flavor ban momentum at the state & federal level (Final Rule expected in March) and uncertainty with regard to the future of the e-cig category and category innovation (with FDA PMTA reviews still pending on big market brands such as JUUL and VUSE Alto, as well as menthol variants more broadly),” Herzog wrote.
E-cigarette sales fell 11.3 percent in the two-week period and 10.7 percent in the four-week period, according to Barron’s.
Sales of smokeless tobacco, including nicotine pouches, meanwhile grew 12.1 percent in the two-week period and 13 percent in the four-week period.
The smokeless category continues to show strong dollar sales growth driven by the Zyn brand, the analysts say.
January 24, 2024
Juul Labs Supports Tighter Rules on Youth Access

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Juul Labs wants tighter e-cigarette regulations to help stave off youth demand while also making the industry safer overall.
In a recent open letter addressed to the Florida House of Representatives and Senate, the maker of JUUL vaping products urged lawmakers to endorse SB 1006 and HB 1007, legislative proposals to regulate the marketplace for legal nicotine vaping products in Florida.
The Senate and House versions of the bill both require state regulators to develop a directory listing of certified nicotine products manufacturers and certified nicotine products. They also subject retail and wholesale nicotine products dealers to inspections or audits; prohibits sale, shipment, or distribution of certain nicotine products into this state; provides criminal penalties; requires entities that seek to sell nicotine products or dispensing devices to obtain wholesale nicotine products dealer permit; provides permit holders must consent to inspections and searches without warrant; provides for seizure and destruction of unlawful nicotine products, according to Florida’s Senate.
In the letter, Juul Labs said it “is on a mission to transition the world’s billion adult smokers away from combustible cigarettes, eliminate their use, and combat underage usage of our products,” according to media reports.
The letter highlighted what the company described as extensive efforts to ensure product quality and compliance with regulatory standards. The letter also emphasized significant investments in product development, regulatory science, and manufacturing quality controls.
Penned by Juul Labs’ regional director for State Government Affairs, Jennifer Cunningham, the letter states that the company wants a better-regulated market. Cunningham cited measures implemented by Juul Labs, including supporting “Tobacco 21” laws to raise the legal age for tobacco product sales to 21, restricting vaping flavors to tobacco and menthol, limiting product purchases per transaction, and promoting retail partner compliance through ID checking and technology advancements.
However, despite these efforts, the letter points out the challenges posed by a burgeoning illegal vape market in Florida, with the state being the primary destination for sales of illicit vapor products in the U.S. The vape maker also expressed readiness to assist Florida legislators in formulating policies that foster a well-regulated market for legal vapor products.
January 23, 2024
FDA Issues MDO for Tobacco-Flavored Bidi Stick
The U.S. Food and Drug Administration has issued a marketing denial order (MDO) to Bidi Vapor LLC for its Bidi Stick classic e-cigarette. The Bidi Stick is a closed-system, disposable, tobacco-flavored vaping device.
“FDA has a key role to protect the public from the dangers of tobacco use,” said Matthew Farrelly, director of the Office of Science within FDA’s Center for Tobacco Products (CTP). “Integral to that role, our tobacco application review process relies on scientific evidence that demonstrates a product provides a net benefit to public health that outweighs the known risks. The science in this application did not show that.”
The company must not market or distribute this product in the United States or they risk FDA enforcement action. The company may submit a new application to the agency for review that addresses these deficiencies.
After reviewing the company’s PMTA, the FDA determined that the application lacked sufficient evidence to demonstrate that permitting marketing of the product would be appropriate for the protection of the public health, which is the standard legally required by the 2009 Family Smoking Prevention and Tobacco Control Act, an FDA press release states. Specifically, evidence submitted by the applicant did not demonstrate an overall net benefit to people who use tobacco products and lacked sufficient evidence to address health risks.
“The Center has made considerable progress in reviewing the massive volume of tobacco product applications submitted to the agency, thanks to the tireless efforts of our dedicated legion of civil servant scientists,” said Brian King, director of the CTP. “The Center remains committed to processing submitted applications as expeditiously as possible while ensuring the utmost scientific integrity of the reviews.”
Kavial Brands, the manufacturer of Bidi Stick, is expected to appeal the decision.
China-based Shenzhen IVPS, the parent to SMOK brand vaping devices, filed an appeal with the New Orleans, Louisiana-based U.S. Court of Appeals for the Fifth Circuit after it received an MDO and was joined in the suit by a Dallas, Texas-based distributor of the SMOK products that were denied marketing.
on Jan. 3, the U.S. Court of Appeals for the Fifth Circuit ruled that the FDA acted “arbitrarily and capriciously” in rejecting the premarket tobacco product applications (PMTA) of Wages and White Lion Investments, doing business as Triton Distribution, and Vapetasia for approval to sell their products in the United States.
The 9-5 decision by the New Orleans-based 5th U.S. Circuit reversed a July 2022 decision by a three-judge panel of that court.
The agency “sent manufacturers of flavored e-cigarette products on a wild goose chase,” telling them what would be needed to approve their products, and then denying all applications, the court said in an opinion by Judge Andrew S. Oldham. The FDA “never gave petitioners fair notice that they needed to conduct long-term studies on their specific flavored products,” Oldham wrote.
January 23, 2024
New PMTA Finish Date is June 30: FDA Status Report

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The U.S. Food and Drug Administration now states that it will complete all covered marketing applications by June 30. In its latest court-ordered status report, the agency stated that continued review is
necessary in light of recent judicial decisions, including the D.C. Circuit’s decision in Fontem US.
“Further, several of these remaining applications present complex scientific issues that require careful review and consideration.
In the Fontem case, the court’s unanimous decision in Fontem US v. FDA upheld the regulatory agency’s denial of Fontem’s application to market flavored vaping products, in line with prior D.C. Circuit precedent but rejected the FDA’s denial of Fontem’s applications for unflavored products.
The agency stated that it was also facing challenges from manufacturers that filed premarket tobacco product applications (PMTAs) that made amendments to their applications after several legal decisions were handed down by courts.
“Many of these amendments contain substantial data and scientific explanation,” the agency wrote. “The amendments range from a few pages to hundreds of pages and were received on a rolling basis, with the most recent 2023 amendment being filed in December 2023.”
Also, on Jan. 3, the U.S. Court of Appeals for the Fifth Circuit ruled that the FDA acted “arbitrarily and capriciously” in rejecting the premarket tobacco product applications (PMTA) of Wages and White Lion Investments, doing business as Triton Distribution, and Vapetasia for approval to sell their products in the United States.
The 9-5 decision by the New Orleans-based 5th U.S. Circuit reversed a July 2022 decision by a three-judge panel of that court.
The agency “sent manufacturers of flavored e-cigarette products on a wild goose chase,” telling them what would be needed to approve their products, and then denying all applications, the court said in an opinion by Judge Andrew S. Oldham. The FDA “never gave petitioners fair notice that they needed to conduct long-term studies on their specific flavored products,” Oldham wrote.
The regulatory agency is under court order to file regular status reports on the agency’s review of pending PMTAs for new tobacco products that were on the market as of Aug. 8, 2016.
For such new tobacco products to be lawfully marketed in the United States, the Family Smoking Prevention and Tobacco Control Act requires the FDA to complete a substantive review of the PMTA for each new tobacco product and issue a marketing granted order authorizing the sale of the product.
The court order stems from litigation filed by health groups against the FDA seeking a court-imposed deadline for finalizing the review of the PMTAs that were filed with the agency by Sept. 9, 2020.
The court-imposed deadline to complete the agency’s review was originally Sept. 9, 2021, which the FDA could not meet due to the extremely large number of PMTAs filed by manufacturers.
The most recent and FDA’s seventh status report was filed on Oct. 23, 2023. Specifically, in these reports, the FDA provides an update on the progress to finalize the agency’s review of pending PMTA “covered applications.”
A “covered application” is for new electronic cigarette/vapor products that were on the market as of Aug. 8, 2016, which had a PMTA filed with the FDA by Sept. 9, 2020, are sold under the brand names of Juul, Vuse, Njoy, Logic, Blu, Smok, Suorin, or Puff Bar, and reach 2 percent or more of the total retail sales volume in NielsenIQ’s various retail e-cigarette sales reports.
The agency also stated that it now expects to take action on 94 percent of covered applications by March 31. The FDA stated that it would file another status report on or before April 22.
January 22, 2024
VTA: CTP Continues ‘De-Facto’ Flavor Ban With MDOs
Tony Abboud, director of the Vapor Technology Association.
When the U.S. Food and Drug Administration’s Center for Tobacco Products (CTP) issued marketing denial orders (MDOs) for Suorin and Blu PLUS+ e-cigarette products, Tony Abboud, executive director of the Vapor Technology Association (VTA), said the decision was just the latest installment of the FDA and CTP’s efforts to implement its de-facto ban on e-cigarettes in the U.S.
“The constant refrain from CTP is that e-cigarette manufacturers are not providing ‘sufficient scientific evidence’ in their PMTAs, yet CTP refused to answer the Reagan-Udall Foundation’s most fundamental criticism of CTP’s entire regulatory process: that CTP has not clearly articulated what is required to prove what is appropriate for the protection of the public health (APPH) or how it is interpreting what is APPH,” Abboud stated in a release.
He stated that the FDA has failed to objectively define the APPH standard while simultaneously using it to deny marketing authorization to critical smoking cessation and harm-reduction products, which is a “gross overreach” for any governmental institution whose mandate is to follow the science.
“Courts have found that the process has become ‘arbitrary and capricious’ in practice, with CTP leadership choosing on a case-by-case basis how the standard ought to be defined,” he stated. “Meanwhile, companies are simply trying to do the right thing by complying with and adhering to the PMTA process set forth by the FDA.”
Abboud stated that the actions of the FDA and CTP do nothing to protect public health or help Americans who smoke. “VTA once again calls on CTP to reverse course on its misguided actions and restore scientific integrity to its regulatory and decision-making process. Enough is enough,” he wrote.
January 21, 2024