Author: Timothy Donahue

  • Activists Welcome Thailand’s Plan to Legalize Vaping

    Activists Welcome Thailand’s Plan to Legalize Vaping

    Asa Saligupta

    Tobacco harm reduction advocates have welcomed Thailand’s plans to legalize and regulate vapor products.

    “Countries which have chosen to legalize and regulate e-cigarettes have seen a fall in overall smoking rates and have much better control over youth vaping. It’s exciting for Thailand, and in fact the world, that the government is now set to overturn its ban on the sale of vape products,” says Asa Saligupta, director of ENDS Cigarette Smoke Thailand (ECST).

    According to Saligupta, Thailand’s harsh ban and penalties on vape sales has meant too many smokers have been stuck with cigarettes, while young people buy e-cigarettes in the underground economy with no control over the purchase age or product safety standards.

    “We’ve seen the legalization and regulation of vaping in places like the United States, United Kingdom and New Zealand work very well. I’m delighted the Thai government is now listening to the science with the adoption of effective tobacco harm reduction (THR) policies now increasingly imminent,” he says.

    The ECST director says Digital Economy and Society Minister Chaiwut Thanakamanusorn, government officials, public health experts and advocates have all been key to finally addressing Thailand’s failed tobacco control policies.

    He says that, despite the minister adopting an evidence-based approach, local conservative health groups continue to unfairly target him and publicly scaremonger.

    “It was a big breakthrough last year when the minister told local media that vaping is safer for people trying to quit smoking. Since then, he has walked the talk—looking at ways vaping can be legalized. He fully understands it offers smokers a less harmful alternative to deadly cigarettes and protects non-smokers from the dangers of second-hand smoke.

    “Consumer groups like ours have worked hard to encourage our politicians and officials to follow the significant international public health evidence. It has been a long journey, but we’re pleased with the progress the government’s working group continues to make on legalizing e-cigarette sales,” says Saligupta.

    Nancy Loucas

    International research also shows countries which have adopted progressive policies around vaping have seen their smoking rates fall twice as fast as those countries that haven’t.

    Nancy Loucas, executive coordinator of The Coalition of Asia Pacific Tobacco Harm Advocates (CAPHRA), says that by lifting its long ban on vape sales, Thailand will join about 70 countries that have legalized vaping.

    “Around the world, vaping is saving millions of ex-smokers’ lives and can save many more if safer nicotine products are embraced, not demonized,” says Loucas. “Thailand’s 10 million smokers have long deserved a readily and legally available alternative to cigarettes. The country’s sky-high smoking rate is totally unacceptable but thanks to the work of ECST and others, it’s about to be seriously addressed.”

    According to Loucas, Thailand has become increasingly isolated internationally with its harsh policies. Vapers currently risk arrests, sanctions and even imprisonment.

    “By legalizing that sale of vapes, Thailand will join countries like the Philippines and Malaysia which are also waking up to the fact that vaping bans inevitably fail, leading to unnecessary smoking-related illnesses and deaths,” says Loucas.

  • Eye of the Tiger

    Eye of the Tiger

    Photo: byrdyak

    Turning Point Brands is embracing next-generation tobacco and alternative products by taking calculated risks.

    By Timothy S. Donahue

    It’s hard to argue the success of Turning Point Brands (TPB). In business since 1988, during the past decade, the company has been turning the typical tobacco business model on its head. It is involved in almost all aspects of the industry, generating nearly $450 million in sales every year. From its iconic brands like Zig-Zag to its more recent investments in the growing legal cannabis industry, TPB is turning heads.

    Headquartered in Louisville, Kentucky, USA, TPB’s business includes three operating segments. Its main line of revenue comes from its “smoking” segment, which includes the rights to the Zig-Zag brand in the U.S. and Canada, according to Scott R. Grossman, TPB’s vice president of corporate development. Zig-Zag is one of the oldest, most recognized “other tobacco products” (OTP) and cannabis accessory brands. “Founded over 150 years ago, Zig-Zag holds the No. 1 share of both rolling papers and wraps in North America, and its products can be found in more than 200,000 retail outlets,” says Grossman. “Given that Zig-Zag generates roughly 40 percent of TPB’s revenue and a majority of our operating income, the brand and its growth initiatives are a major focus for us.”

    TPB’s second segment is “smokeless,” which is predominantly the Stoker’s brand, a leading player in the moist snuff tobacco and chewing tobacco markets. The company also owns the Beech-Nut brand and a diverse collection of other chewing tobacco products. Another compelling segment of the TPB operation is its new generation of products (NewGen), which covers the company’s electronic nicotine-delivery system (ENDS) and cannabis brands.

    NewGen includes an assortment of brands serving multiple industry segments, such as TPB’s business-to-business (Vapor Beast) and business-to-consumer (International Vapor Group) distribution platforms and its new product engine, Nu-X Ventures. The company has online platforms under brand names such as VaporFi, South Beach Smoke and DirectVapor. TPB also owns the e-liquid brand Solace and within its NewGen segment includes recent minority investments in the emerging cannabinoid space, including brands such as Old Pal, Dosist, Docklight and Wild Hemp.

    TPB was one of the first traditional tobacco companies to publicly announce its foray into the legal cannabis market. That decision came under the leadership of TPB’s former president and CEO, Larry Wexler, who retired from the company and was succeeded by Yavor Efremov on Jan. 11. “Larry took the company public in 2016 as an OTP business, and over the next five years, he successfully drove significant initiatives to drive value, including the investment in new talent to drive TPB forward,” says Grossman. “We’ve been strategically focused on introducing new products to serve both B2B and B2C customers across on-premise retail and online channels.”

    Yavor Efremov

    Bump in the Road

    Being a business with major assets in ENDS comes with challenges. TPB was one of the first major companies to receive a marketing denial order (MDO) from the U.S. Food and Drug Administration after the agency’s Sept. 9, 2021, deadline to decide on premarket tobacco product applications (PMTAs). Convinced that the FDA’s decision was unjustified, TPB immediately filed a legal challenge. Before the lawsuit made its way through the courts, the FDA rescinded the MDO it issued to TPB. The term “Fatal Flaw” was used by the FDA for PMTA submissions that lacked certain studies. The term has been at the center of nearly all lawsuits filed against the FDA for its handling of the PMTA process.

    “The Fatal Flaw standard is obviously one that departs from the pre-September 2020 guidance. In fact, it’s in direct conflict with that guidance. It’s helpful that [our MDO] was rescinded and that the agency admitted it had not reviewed certain [TPB] studies,” explains Paul Blair, TPB’s vice president of government affairs, adding that TPB made the decision to file suit because there was information that the regulatory agency overlooked in its review process. TPB wasn’t unique in that respect; however, the agency didn’t look at specific study data for several businesses.

    “[The rescission] is an important recognition that our denial was not related to nitpicking over data. The science we submitted about transitioning combustible cigarette consumers to our products in particular … It was an oversight. And that’s helpful not only as we try to navigate the process moving forward but also because it doesn’t seem it was an attack on the body of our application generally,” explains Blair. “We maintain that we provided data that is sufficient for the agency to authorize the marketing of our PMTAs. It’s fair to say, though, there’s not a publicly announced standard for the approval process, whether it’s for open system products, closed system products, flavors and, honestly, even tobacco and traditional flavored products.”

    That’s what Blair believes the FDA is doing now; the agency is probably reviewing its communications plan on how to reassess the PMTA process and come to some conclusions on deciding on a standard for authorizing products. Traditionally, the FDA would engage in good faith conversations with businesses trying to get products approved and offer some clarity on what information the agency needs. According to critics, the FDA’s Fatal Flaw analysis for ENDS products proved this isn’t the case anymore.

    Paul Blair

    Embracing Change

    Unlike most traditional tobacco companies, TPB isn’t shy about its cannabis investments. The company’s management team and its board have embraced legalization, according to Grossman. Currently, 37 U.S. states have legalized medical cannabis and 18 have approved it for recreational use. During the past few years, the company has invested in several cannabis operations. In 2021, TPB completed an $8 million strategic investment in Old Pal Holding Co., a cannabis lifestyle brand, and an $8.7 million strategic investment in Docklight Brands, a consumer products company led by its anchor brands Marley Natural and Marley CBD. In 2020, TPB entered into a long-term distribution and profit-sharing arrangement with Wild Hempettes, the Texas-based manufacturer of Wild Hemp Hempettes brand smokable CBD, and made a $15 million strategic investment in the global cannabinoid company Dosist.

    Grossman says that while every investment needs to be able to stand on its own, TPB’s strategy is focused on finding highly synergistic companies that strengthen the current TPB platform. Old Pal is a good example of how its strategy is being deployed—Old Pal sells roll-your-own (RYO) cannabis products with rolling papers inside the packaging. “Zig-Zag has historically been mainly focused on the convenience store channel, so this investment enables TPB to further accelerate growth in under-indexed stores such as dispensaries and head shops while supporting the growth of Old Pal,” says Grossman.

    In August, TPB made its first move into the international market by increasing its stake in ReCreation Marketing, a Canadian distribution company with ties to Canada’s recreational cannabis culture. In December, ReCreation Marketing rebranded as Turning Point Brands Canada. “TPB Canada has a number of proprietary branded products in its portfolio, and we are exploring strategies to leverage that proven model and its portfolio to increase distribution within the U.S.,” says Grossman. “We are one of a select group of established companies—especially public companies—that are actively looking to deploy capital in the cannabinoid space. Historically, we’ve been predominately focused on brands given our expertise, but we’re exploring many verticals within the cannabinoid sector. Our pipeline is very healthy, but at the same time, we have to remain highly disciplined with how we spend our time and capital.”

    It’s not just vaping and cannabis products in TPB’s future. In July, the company acquired certain cigar assets of Unitabac. The acquisition was for a portfolio of cigarillo products and all related intellectual property, including cigarillo non-tip, homogenized tobacco leaf, rolled leaf and natural leaf cigarillo products. “The cigar business is a $2.5 billion wholesale business in the United States. We’ve historically participated in that market, but we didn’t have the scale necessary to be really competitive. The Unitabac acquisition allows us to further extend into the cigar market,” says Grossman. “You’ll see a number of initiatives with that asset rolling out natural leaf products and other cigar assets, both under the Unitabac portfolio of brands as well as extending it to Zig-Zag.”

    Scott Grossman

    Facing Uncertainty

    The FDA will soon have a new leader (Biden’s appointee, Robert Califf, had yet to be confirmed at press time). The FDA’s Center for Tobacco Products (CTP) will also have a new leader; its current director, Mitch Zeller, plans to retire in April. Blair says that the individuals in those positions will have a significant role to play in determining how the agency and CTP will work with stakeholders and communicate policies about how those regulations will go into effect. The FDA, he says, doesn’t have any previous experience regulating vaping products, so there is going to be a lot of action, reaction and learning along the way.

    “It’s not as if Congress explicitly wrote how the approval or denial process might look. In fact, they didn’t write the details,” says Blair. “At least [the FDA is] thinking about the process, and they’re thinking about the consequences. But there is this opportunity beyond vapor product PMTAs in 2022 for a future generation of products to have some certainty because at the end of this, whether it’s because of litigation, because it’s further issued guidance, because it’s approvals or denials, there will be a pathway for companies and a better understanding of how the process works.”

    Blair says that overcoming the challenges of getting a PMTA approved will be stepping stones toward determining how the company approaches the future regulation of other products, such as cannabis. He says there is a real opportunity for TPB to play a critical role in the future of cannabis regulation and policy. “I think our action is going to be guided by our business’ experience as a regulated tobacco business. There are other tobacco businesses that have cannabis interests or investments, but there aren’t many that are willing to publicly engage in the way that ours is as an advocate for legalization, as an advocate for appropriate regulations. There needs to be a balance of consumer protection with entrepreneurship and opportunities in the investment space.”

    Grossman says the future of TPB is to align itself with the growth of the cannabinoid industry and possibly make more direct cannabis investments outside its current portfolio. “We are concentrated on trying to learn and execute on a variety of cannabinoid initiatives,” he says. “Although we’ve historically focused on brands, we are deeply embedded in the sector and are actively studying many verticals across value-added products and services, brands and distribution. We believe the U.S. cannabis market will exceed $50 billion over the next five to 10 years, which we clearly think will benefit TPB over the long term.”

  • Hawaii Bill to Ban Flavors, Synthetics Moves Forward

    Hawaii Bill to Ban Flavors, Synthetics Moves Forward

    Credit: 5m3photos

    A bill in Hawaii’s House of Representatives (HB 1570) proposes to prohibit the sale of flavored tobacco and synthetic nicotine products. HB 1570 would also prohibit companies from mislabeling e-liquid products as nicotine-free and marketing electronic smoking devices to appeal to anyone under the age of 21. 

    Retailers who violate the proposed rule would face a $500 fine for a first offense and between $500 and $2,000 for a second violation, according to KITV.

    Anyone under the age of 21 in possession of a synthetic nicotine product or electronic smoking device would be fined $10 for a first offense. Any repeats would cost $50 or between 48 and 72 hours of community service.

    After Thursday’s hearing, lawmakers advanced and amended the bill to include quarterly meetings between the Department of Health and students across all schools on the matter. Establishing a vape and e-cigarette take-back program at high school and intermediate campuses statewide was also added to the measure.

    HB 1570 faces several other hearings and readings in the house.

  • PMI to Bypass Import Ban by Manufacturing IQOS in U.S.

    PMI to Bypass Import Ban by Manufacturing IQOS in U.S.

    Philip Morris International plans to manufacture IQOS in the United States to get its tobacco-heating device back on that country’s store shelves, reports Bloomberg.

    The move follows an adverse ruling against the company and its U.S. partner, Altria Group, in a patent dispute with British American Tobacco.

    In September 2021, the International Trade Commission (ITC) upheld an initial determination from May 2021 that IQOS infringes on two patents owned by BAT subsidiary Reynolds American Inc. (RAI).

    The ITC instituted an import ban and issued a cease-and-desist order, barring Altria Group from importing PMI’s IQOS 2.4, IQOS 3, IQOS 3 Duo products into the U.S. By declining to intervene, the U.S. Trade Representative upheld the ITC finding in November, leaving PMI with the options to produce IQOS domestically or tweak the design.

    A design change, however, would require authorization from the U.S. Food and Drug Administration again.

    In an interview with Bloomberg, PMI CEO Jacek Olczak, said the company had planned to manufacture IQOS in the U.S. all along. “From the very beginning of us going to the FDA, we had in mind that IQOS would one day not only be sold in the U.S., but manufactured there, if you take into consideration the size of the market and the opportunity for IQOS,” he said. “It’s just happening sooner because of the ITC decision.”

    In July 2020, the FDA authorized PMI and Altria to market IQOS with certain modified-exposure claims, giving the company a leg up over its rivals.

    PMI has not specified where it will be manufacturing IQOS but said it plans to sell IQOS in the U.S. again in the first half of 2023.

  • Triton Unleashes its Opening Argument in FDA Lawsuit

    Triton Unleashes its Opening Argument in FDA Lawsuit

    In a highly anticipated case for the vapor industry, Triton Distribution made its opening arguments Monday in its battle with the U.S. Food and Drug Administration over how the regulatory agency conducted it premarket tobacco product application (PMTA) reviews. Triton’s lawyer urged a three-judge panel of the 5th U.S. Circuit Court of Appeals in Houston to conclude the FDA could not force manufacturers to provide studies that the agency had previously stated would not be required.

    “The question before the court concerns how exactly the FDA ended up denying Triton’s PMTA—with potential implications for comparable applications by many other denied companies,” said Triton’s attorney Eric Heyer, a partner at Thompson Hine.

    Credit: Sergign

    In August, the FDA rejected applications to market 55,000 flavored e-cigarettes, including Triton’s, and said applicants would likely need to conduct long-term studies establishing their products’ benefits to win approval, according to Reuters. The new requirement for long-term studies differed from earlier FDA guidance and was a “surprise switcheroo,” a 5th Circuit panel concluded in October when it allowed Triton to keep selling e-cigarettes until another panel could hear its appeal.

    In recently released internal FDA correspondence, the agency’s scientific staff conducted “fatal flaw” reviews that only looked for the presence of the newly required long-term studies, and if those studies were not present the agency issued a marketing denial order (MDO). During oral arguments, Heyer said the FDA’s new requirement was “arbitrary and capricious, a position conservative U.S. Circuit Judge Edith Jones appeared to agree with.

    “It seems to me that’s the height of arbitrariness and capriciousness, to say we are the FDA, trust us, which I might say some of us are becoming skeptical about in light of recent vaccine experiences,” she said, alluding to COVID-19 vaccines.

    Heyer argued that the process the FDA established set Triton up for failure because the new requirements were only conveyed after the deadline for when PMTAs needed to be submitted (Sept.9, 2020) had passed. It was only then that the FDA indicated that applicants would likely need randomized controlled trials (RCTs) and longitudinal cohort studies to demonstrate “comparative efficacy.”

    The other two judges questioned Triton’s case. U.S. Circuit Judge Gregg Costa asked whether Triton’s products, such as one called Jimmy the Juiceman Strawberry Astronaut, were really targeted to adults. “That’s supposed to be appealing to a 40-year-old?” he asked.

    U.S. Circuit Judge Catharina Haynes questioned why companies like Triton did not have enough time to develop such support for their products’ health benefits for adults given the years they have had to prepare for FDA regulation. The FDA in 2016 deemed e-cigarettes to be tobacco products like traditional cigarettes subject to agency review under the Tobacco Control Act. Manufacturers were ultimately given until 2020 to seek approval to market them.

    If the court disagrees with Triton’s argument, Heyer has requested that the judges “enjoin FDA from taking further adverse action on the Petitioners’ PMTAs for 18 months to allow Petitioners to conduct the necessary studies to prove comparative efficacy,” according to legal documents.

    There is no timeline for a decision in the Triton lawsuit. Judges are expected to take at a minimum weeks, if not months, to make a decision. 

  • Malaysia Proposes Vaping Ban for People Born After 2005

    Malaysia Proposes Vaping Ban for People Born After 2005

    Malaysia’s Ministry of Health (MOH) clarified that its proposed smoking ban for everyone born after 2005 does not only cover cigarettes and tobacco products, but also vape, e-cigarettes, and heated tobacco products.

    Malaysia
    Credit: Peter Nguyen

    Health Minister Khairy Jamaluddin announced at the World Health Organization’s (WHO) executive board meeting in Geneva about Malaysia’s plans to prohibit the sale of cigarettes and tobacco products to people born after 2005 in a bid to outlaw smoking for the next generation.

    This means that Malaysians who are 17 years old today will not be able to legally buy tobacco, vape, or e-cigarettes next year when they turn 18, the current legal age for smoking in Malaysia, or ever, in their lifetime. Neither will subsequent generations be ever permitted to purchase cigarettes and other smoking products. 

    An MOH official said the prohibition covered all tobacco products, including cigarettes, cigars, tobacco leaves, and smokeless tobacco, as well as electronic devices like vape or e-cigarettes and heated tobacco products.

    “Tobacco products, smoking substances, substitute tobacco products, and smoking devices,” the MOH official told CodeBlue.

    Disposable e-cigarettes or vape pens are also sold in Malaysia. Some e-liquids and disposable vapes do not contain nicotine.

    “Wait for RUU,” the MOH official said when asked if the proposed generational ban on the sale of tobacco and smoking products covered zero-nicotine vape liquids. He was referring to the new Tobacco and Smoking Control Act that the government plans to table in the upcoming Parliament meeting, according to the story.

    The government previously announced during the tabling of Budget 2022 plans to tax vape and e-cigarette liquids containing nicotine, essentially legalising vape products that are presently under a grey area of regulation.

    Current tobacco control legislations under the Food Act 1983 do not cover vape or e-cigarettes. However, under the Poisons Act 1952, nicotine can only be supplied by pharmacists or medical practitioners.

  • Thailand Continues to Explore Legalizing E-Cigarettes

    Thailand Continues to Explore Legalizing E-Cigarettes

    Credit: Tuayai

    The Digital Economy and Society (DES) Ministry set up a working group to see if electronic cigarettes can be legalized as an alternative for smokers, reports The Nation.

    Asa Salikupt, from the End Cigarette Smoke Thailand (ECST) network, said the network supports DES Minister Chaiwut Thanakamanusorn’s plan to legalize e-cigarettes and hopes the working group will be transparent, listen to public opinions and allow e-cigarette users to provide information.

    “We believe the legalization of e-cigarettes will help Thailand achieve the goal of reducing cigarette smokers and protecting nonsmokers from the danger of secondhand smoke,” Salikupt said.

    The Excise Department can introduce an e-cigarette tax once e-cigarettes are legalized.

    Maris Karanyawat, also from ECST, said Britain, New Zealand and the Philippines are likely to promote the use of e-cigarettes to help reduce the consumption of harmful substances and help those who cannot quit smoking cold turkey.

    “More than 70 countries have legalized e-cigarettes as it can reduce the number of smokers,” Karanyawat added.

    By banning e-cigarettes, the government is losing tax revenue, people are losing access to safer alternatives and the Tobacco Authority of Thailand is losing a chance to make money, according to Taopiphop Limjittrakorn, Move Forward’s Bangkok MP.