Category: Also in VV

  • Significant Impact

    A new economic study finds that a flavor ban would force the closure of nearly every brick-and-mortar vape shop in the U.S.

    More than 13,000 vape shops would close. Over 150,000 jobs would be lost. The U.S. economy would lose more than $22 billion, including more than $15 billion in taxes. These are the potential catastrophic economic outcomes if e-liquid flavors are banned, according to the results of a recently released study commissioned by the Vapor Technology Association (VTA), a vapor industry advocacy group.

    The study, conducted by the analysis firm John Dunham & Associates (JDA), analyzed sales of flavored vapor products in the independent vapor distribution chain. It found that approximately 91.6 percent of sales of vapor products are e-liquid flavors other than tobacco. That number only dropped to 85.7 percent when menthol was included alongside tobacco flavors.

    The JDA study concluded that “if a flavor ban was implemented, the independent vapor segment of the market would cease to exist in any meaningful way since the vast majority of the 13,480 independent vapor shops in the country (which currently generate 58,430 full-time equivalent jobs) would likely have to close. No business can continue to exist were it to lose 90 percent of its revenue.”

    This study’s findings are significant because, if accurate, they are within the parameters of the White House’s Office of Management and Budget (OMB) rules that state that any regulation that significantly impacts the economy must undergo an extensive regulatory assessment process. One of the factors used to establish whether a proposed rule makes a major impact is that it would have an overall negative impact of at least $100 million on the economy.

    “Proposals to ban the sale of all nicotine vapor products that are not tobacco flavored would have impacts on both sales and on the economy far in excess of this guideline,” according to the study. “The same is true of proposals to ban all but tobacco, menthol and mint-flavored vapor products. This would mean that under most normal circumstances, these proposals would need to follow all of [the] OMB’s regulatory guidelines.”

    Executive director of the VTA, Tony Abboud, said that the updated economic impact analysis proves that a flavor ban is not the right policy for the vapor industry. “Fortunately, there are many smarter ways to attack the issue of youth vaping outlined in our comprehensive plan 21 & Done! without eliminating the independent vapor distribution chain, made up of more than 14,000 small businesses around the country that are competing every day with Big Tobacco,” said Abboud.

    The recently released study is an update to the 2018 Vapor Industry Economic Impact Study released earlier this year. The study estimates the economic contributions made by the vapor industry, which includes e-liquids, coils, box mods and other vapor products to the U.S. economy in 2018. JDA conducted the research, which was funded by the VTA. According to the study, researchers used standard econometric models first developed by the U.S. Forest Service and now maintained by IMPLAN Inc. Data came from industry sources, government publications and Infogroup.

    “The study measures the number of jobs in the vapor industry, the wages paid to employees, the value-added and total output,” according to the first study. “In addition, it measures the economic impact of the suppliers that support the vapor industry as well as those industries supported by the induced spending of direct and supplier industries.”

    According to the updated study, using data based on a survey of the three largest distributors in the independent vapor distribution chain, 85.7 percent of sales at vape shops are of flavored vapor products and just 6.4 percent are tobacco flavors.

    “These data should be more representative of the total market than scanner data (which are discussed below) since well more than half of all vapor sales are of open systems (or e-liquids) and are made at dedicated vapor and tobacco retailers,” the study states. “Using these breaks, [if] the federal government [decided] to ban both flavored and menthol products, the immediate loss would be 91.6 percent of retail sales.” According to the study, were this to occur, adults who prefer these products could react in one of three ways:
    • Stop vaping altogether or switch to another tobacco product;
    • Switch to vaping tobacco-flavored products; or
    • Continue to vape flavored and menthol products but purchase them over the black market or flavor products at home.

    “JDA’s modeling suggests that a large portion of consumers would react by purchasing unregulated products over the black market or make their own flavored e-liquids. However, government-sponsored research (that does not include this option) concludes that there would be a large shift toward tobacco-flavored products,” the study claims. “Based on these data, it would be likely that the current 6.4 percent share of tobacco-flavored products would increase to about 8.5 percent of pre-ban sales. Overall, sales would fall to roughly $779.7 million.”

    The JDA study found that there were several government-funded studies that found that flavored vapor products didn’t hold a strong market share. However, the government studies are based on data collected from gas stations, convenience stores and grocery stores. The data is collected and distributed by Nielsen, a global measurement and data analytics company. These retail chains do not readily sell open system devices, which make up much of the flavored e-liquid market.

    The flawed Nielsen data is then used in research conducted by the Centers for Disease Control and Prevention (CDC), and the federal agency reports that about 10.2 percent of the analyzed vapor products were flavored, roughly 37 percent were menthol and the remaining 52.8 percent were tobacco flavored.

    “This essentially reflects chain retailer sales of closed vapor systems (so-called e-cigarettes) over the period from 2012 to 2016,” according to the recent study. “The Nielsen data that this research relies on comes from contracted retailers’ scanner systems. The vast majority of vape shops and tobacco shops would not be included in the data.”

    Based on the CDC paper, about 52.2 percent of open system (e-liquid) product sales were flavored while 25.2 percent were menthol. Most tobacco stores and specialized vape shops focus more on e-liquid sales than the conventional chain stores that are included in the Nielsen data. This suggests that the analysis performed here is extremely conservative since conventional retailers represent only about half of the market for vapor products, according to the study.

    “Bans don’t work; they never have,” said Abboud. “However, 21 & Done! proposes real solutions, including raising the [purchase] age to 21, implementing 21 specific marketing restrictions, requiring third-party age verification technology at retail and a ‘three strikes and you’re out’ penalty scheme for retailers.”

  • Gima to exhibit at IECIE

    Gima to exhibit at IECIE

    Gima TT will present its technical solutions for the vapor industry at the IECIE show (booth #7G58)  in Shenzhen, China, April 14-16.

    Gima TT is part of IMA Group, a designer and manufacturer of processing and packaging machinery for pharmaceuticals, cosmetics, food, tea and coffee, with 5,500 employees and 41 production sites worldwide, and a €1.5 billion turnover in 2018.

    Gima TT was established in 2009 to offer the tobacco industry a fully electronic machine concept that is easy to maintain, user friendly and, above all, flexible. Gima TT launched its first cigarette packaging line in 2012.

    In a market characterized by increasingly complex products, tobacco companies require unprecedented levels of customization. Gima TT’s Flex-Line meets the requirements of the modern market, offering quick installation, ease of operation, convenient maintenance and an opportunity for users to reduce their spare parts inventory.  

    Drawing on the expertise of its parent company, Gima TT also offers packaging solutions for next-generation products (NGP).

    The company is able to design and supply complete lines for all types NGPs, both with tobacco (such as heat-not-burn products) and without (such as e-cigarettes).

    Its solutions for the vapor industry include assembly of components, filling (powders, e-liquid, nicotine salt, oil, etc.), primary packaging (blistering, flow wrapping, etc.) and a number of secondary packaging options.

    with a speed ranging from 25 to 100 products per minute, Gima TT’s entry-level EC-Pilot is ideal for customers seeking efficiency and cost-effective filling operations for powders and liquids. The EC-Pilot can handle multiple pod/cartridge formats with minor adjustments, features precise filling to avoid product wastage and is equipped with online capping for both press-down and twist caps with quality check of the final product. The machine can be optionally equipped with a filling tank preheating system.

    For more information, visit www.gimatt.it.

  • Changing tack

    Changing tack

    Big Tobacco is moving in on the vaping industry–but in a different way from before.

    By Tom Buckland

    It is unsurprising that Big Tobacco has traditionally been no fan of vaping products since their commercial introduction nearly 15 years ago. E-cigarettes represent, after all, a direct competition to Big Tobacco’s product. What’s more than that, they hold the potential to destroy the tobacco industry as a smoking-cessation aid.

    It seems likely that the tobacco lobby is behind some of the misinformation that has been spread about vaping for many years, including misleading reports that suggest vaping is dangerous. It is certainly true that the rise in the popularity of vaping has already damaged cigarette sales. In the final quarter of 2017, U.S. cigarette sales decreased by 6 percent at the same time as the sales of the Pax Juul e-cigarette rapidly increased.

    However, it seems like the Big Tobacco companies are now taking a different approach and rather than attacking or undermining the vaping industry, they are looking to strengthen it and at the same time gain a stake in the industry for themselves.

    In December 2018 it was announced that major Big Tobacco player Altria has invested $12.8 billion in e-cigarette company Juul. This move means the tobacco company now has 35 percent ownership of the e-cigarette and vape pen manufacturer and supplier, which has seen staggering popularity since its first products were released a few years ago. This came just two months after Altria announced it would no longer produce its own vaping device, the Mark Ten, citing concerns about an “epidemic” of vaping among teenagers. They seem to have back flipped in December, when Altria CEO Howard Willard announced the investment and said, “We have long said that providing adult smokers with superior, satisfying products with the potential to reduce harm is the best way to achieve tobacco harm reduction.”

    This was probably the most decisive investment in vaping by Big Tobacco, but it was by no means the first. In July 2017, British American Tobacco invested $2.5 billion in its “non-conventional cigarette portfolio,” including acquiring vape producer Vype. Around the same time Philip Morris International, the company that owns Marlboro among other tobacco producers and suppliers, announced a major research & development shift to focus on the development of alternatives to cigarettes. U.K.-based cigar giant Imperial Brands, meanwhile, has invested strongly in its “next-generation product” division which produces a range of vape products under the Blu brand.

    Despite the level of Big Tobacco involvement in the production and marketing of vaping products, smaller e-cigarette companies retain a strong presence in the industry—for now at least. There remain a number of e-juice producers, largely offering “gourmet” e-liquid products as an alternative to well-known products produced by the big brands.

    Big Tobacco’s involvement with vaping is not limited to investment and production of vaping products. They are also becoming vocal in the pro-vaping advocacy space. A current campaign which is lobbying the European Commission to treat vaping products differently from tobacco was recently revealed to have financial backing from Imperial Brands.

    In Australia, Big Tobacco is being very active in the current debate to legalise vaping (e-cigarettes are banned in the state of Western Australia, and restricted in other states). Philip Morris, came out in February to advocate for the legalisation of vaping devices in Western Australia. The company told Australian legislators who are examining the issue that the e-cigarette ban should be lifted in order for the state to “catch up” with other countries.

    The moves of Big Tobacco into the vaping industry, which span at least three continents, likely represent a widespread change which we will see across the board. We can likely expect to see Big Tobacco investment in e-cigarette companies to expand substantially, at the same time as lobbying for more favourable regulations. What impact this will have on the vaping industry remains to be seen, but it is probably safe to say that the growing presence of tobacco players will make many uneasy.

    Tom Buckland is the head of content at Vapemate, a company that help smokers to quit smoking.

  • Vapor emissions reassessed

    A study has found that the levels of three compounds in e-liquid emissions were hugely lower than those reported in a previous study, according to a ScienceDirect.com story relayed by the TMA.

    The replication study, conducted by a team of researchers led by Dr. Konstantinos E. Farsalinos at the Onassis Cardiac Surgery Center and the University of Patras in Greece, is scheduled to be published in the May edition of the journal Food and Chemical Toxicology.

    It tested three e-liquids from a previous study (in standard and sweetened versions) using the same device and puffing patterns, and found a 589-fold decrease in the levels of formaldehyde (8.3–62 μg/g), acetaldehyde (12.1–26.0 μg/g) and acrolein (5.4–19.4 μg/g) from those reported as part of the earlier study.

    The earlier study had identified aldehyde emissions up to 10,000-times higher in flavored e-liquids than in unflavored e-liquids.

    But the latest study found that aldehyde emissions from all flavored e-liquids were 79.0–99.8 percent lower than those associated with smoking.

    And they were lower than commonly measured indoor levels and occupational and indoor safety limits.

    The researchers said the devices tested emitted very low levels of aldehydes, and that while some flavorings might contribute to aldehyde emissions, the absolute levels were minimal.

  • American Cancer Society issues support of vapor

    In a position statement issued today, the American Cancer Society (ACS) says that for smokers who will not or cannot quit smoking using other methods, switching to the exclusive use of electronic cigarettes is preferable to continuing to smoke combustible products.

    Although the support given to the use of e-cigarettes is much qualified; coming as it does from the ACS, it is nevertheless hugely significant.

    The position statement on e-cigarettes was approved by the ACS’ board of directors and will be used to guide the society’s tobacco control and cessation efforts in relation to these products.

    Under the heading, Scientific Summary, the statement said in part that, based on currently available evidence, using current-generation e-cigarettes was less harmful than was smoking cigarettes, but that the health effects of long-term use were not known.

    ‘The … ACS recognizes our responsibility to closely monitor and synthesize scientific knowledge about the effects of all tobacco products, including e-cigarettes and any new products derived from tobacco,’ the statement said. ‘As new evidence emerges, the ACS will promptly report these findings to policy makers, the public and clinicians.’

    The statement, under the heading, Clinical Recommendations, went on to say that the ACS had always supported smokers who were considering quitting, no matter what approach they used; there was nothing more important that they could do for their health.

    ‘To help smokers quit, the ACS recommends that clinicians advise their patients to use FDA-approved cessation aids that have been proven to support successful quit attempts,’ the statement said. ‘Many smokers choose to quit smoking without the assistance of a clinician and some opt to use e-cigarettes to accomplish this goal. The ACS recommends that clinicians support all attempts to quit the use of combustible tobacco and work with smokers to eventually stop using any tobacco product, including e-cigarettes.

    ‘Some smokers, despite firm clinician advice, will not attempt to quit smoking cigarettes and will not use FDA approved cessation mediations. These individuals should be encouraged to switch to the least harmful form of tobacco product possible; switching to the exclusive use of e-cigarettes is preferable to continuing to smoke combustible products. Of course, these individuals should be regularly advised to completely quit using all tobacco products.

    ‘The ACS strongly discourages the concurrent (or “dual”) use of e-cigarettes and combustible cigarettes, a behavior that is far more detrimental to a person’s health compared to the substantial health benefit of quitting smoking.’

    Under the heading, Policy Recommendations, the statement said that the ACS strongly recommended that every effort be made to prevent the initiation of e-cigarettes by youth. ‘The use of products containing nicotine in any form among youth is unsafe and can harm brain development,’ the statement said. ‘Furthermore, evidence indicates that young e-cigarette users are at increased risk for both starting to smoke and becoming long-term users of combustible tobacco products.

    ‘The ACS encourages the FDA to regulate all tobacco products, including e-cigarettes, to the full extent of its authority, and to determine the absolute and relative harms of each product. The FDA should assess whether e-cigarettes help to reduce tobacco-related morbidity and mortality, and the impact of marketing of e-cigarettes on consumer perceptions and behavior.

    ‘Any related regulatory regime should include post-marketing surveillance to monitor the long-term effects of these products and ensure the FDA’s actions have the intended health outcome of significantly reducing disease and death.’

    The full statement is at: https://www.cancer.org/healthy/stay-away-from-tobacco/e-cigarette-position-statement.html.

  • Major vapor distributor launches new division for alternative market

    The alternative market has been instrumental in the development of vapor products. With more than half of U.S. states having at least legalized marijuana for medical purposes, retailers are finding value in offering alternative smoking devices to their customers. Phillips & King, a major vapor distributor, announced today the launch of PK>FWD, a new division focused on curating and distributing top-selling alternative smoking accessories.

    The new division was created to address the evolution of the tobacco industry by offering retailers top-quality alternative accessories and products. PK>FWD’s new website (www.pkfwd.com) and buying guide are designed to specifically service headshops and smoke shops, but PK>FWD was also developed for the traditional tobacconists looking to grow their business in the alternative category.

    “Phillips and King has been in the tobacconist business for over 110 years, and specifically servicing the headshop and smoke shop categories for over 10 years. We have a long history of being ‘the’ company people turn to for quality offerings and industry insights. We know what sources to turn to, what products to sell, and what items are in demand at the consumer level,” says Sergio Montolfo, general manager of Phillips and King. “We’ve seen the alternative category grow exponentially over the last 10 years, and are pleased to be on the forefront of the continued evolution with our new category-specific buying guide and website. We are making a significant marketing and sales push within our company to support the alternative categories, and to help our customers grow their businesses using our expertise and incredible selection of products they can count on.”

    With a catalog of over 21,000 available items, the PK>FWD website and Buying Guide offer top-sellers from high profile brands like Formula420, PAX, Greenhouse, Chong’s Choice, Raw, Prima, Cornerstone Class, GRAV Labs, and White Rhino. The large selection of products appeal to diverse customer bases, featuring everything from high-quality glass and vaporizers, like the newly available Firefly 2, to everyday accessories like rolling papers, grinders, storage, and humidification, according to a press note.

    “We are constantly evaluating our product portfolio, making sure that we are presenting items that are interesting, eye-catching, and useful to our customers- and to our customer’s customers,” says Jason Carignan, CMO of Kretek, parent company of Phillips and King “PK>FWD makes it simple for progressive-minded retailers to find and sell items that will make a difference to their bottom line, in both traditional sectors and new markets. It is the next evolution of our business. And of our customers’ businesses.”

    In addition to being a well-trusted one-stop shop, PK>FWD also offers personal service with online ordering capabilities, same-day, free shipping on qualifying orders, and over 50 dedicated salespeople, according to the press note.

  • Keeping cool

    Keeping cool

    E-cigarettes can explode. How to prevent tragedies from happening.

    By Maria Verven

    Man loses eye. Woman loses teeth. Teen hospitalized after his e-cigarette explodes.

    Maria Verven is a 35-year PR veteran and owner of Verve P.R., a marketing firm focused on the vapor industry.
    Maria Verven is a 35-year PR veteran and owner of Verve P.R., a marketing firm focused on the vapor industry.

    Exploding e-cigarettes are becoming headline news. And in an industry already under fire and soon to come under the U.S. Food and Drug Administration’s (FDA) draconian regulations, these headlines aren’t doing our industry any favors.

    On the one hand, science keeps giving us ample evidence that e-cigarettes (personal vaporizers or mods) are significantly safer than smoking. Even the highly respected Royal College of Physicians has endorsed e-cigarettes as a substitute for smoking, asserting that vaping is likely to generate “significant health gains in the U.K.” (Also see “Mind the gap,” page xx.)

    And the number of e-cigarette users has risen dramatically; the U.S. Centers for Disease Control and Prevention reported that the smoking rate among U.S. adults fell to 15 percent last year—the biggest one-year decline in more than 20 years. The reason for the drop is most likely because many people went beyond the headlines and made an intelligent choice between smoking and vaping.

    But on the other hand, a growing number of people perceive e-cigarettes to be just as harmful as or even worse than cigarettes. A STAT-Harvard poll released last October reported that nearly two-thirds (65 percent) of adults in the U.S. believe e-cigarettes are harmful to the health of people who use them. In a 2010 poll, by contrast,  most smokers (85 percent) said they believed e-cigarettes were less dangerous than traditional cigarettes.

    The public perception of vaping is clearly going in the wrong direction. Due to headlines like the above, there could easily be hundreds of thousands of smokers too afraid of an explosion to make the switch.

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    Why e-cigarettes explode

    E-cigarettes are powered by lithium-ion batteries, which contain electrolytes. When overheated, this type of battery can spontaneously combust. While these batteries are also used in cellphones and laptops, these devices don’t pull as much current as do e-cigarettes, so there have been very few incidents. Besides, they’re not objects of a much-maligned and grossly misunderstood industry like the e-cigarette industry.

    According to the U.S. Fire Administration, fires and explosions from e-cigarettes are rare, especially considering the number of users. Their 2014 report cited 25 e-cigarette incidents between 2009 and August 2014, resulting in nine injuries and two serious burns. However, by the time of their 2014 report, an estimated 2.5 million Americans were using e-cigarettes or personal vaporizers.

    The vast majority of e-cigarette explosions happen while the batteries are charging—usually because the user is charging the device with an “alternate” device and not the one designed for it. Only 20 percent of incidents happened when the user was vaping or when the e-cigarette was in their pocket or hand.

    “The shape and construction of e-cigarettes can make them more likely than other products with lithium-ion batteries to behave like ‘flaming rockets’ when a battery fails,” the Fire Administration report stated.

    Despite this, industry experts assert that these products don’t pose a risk when used correctly.

    “When used and charged properly, e-cigarettes pose no more of a fire risk than other products that use lithium-ion batteries,” said Gregory Conley, president of the American Vaping Association.

    “While these incidents are taken very seriously, millions of former smokers continue to use these products as intended. Proper care and safety dictate that people use the correct type of charger and follow manufacturer guidelines,” stated the Smoke-Free Alternatives Trade Association (SFATA).

    “Education of the customer is probably the most important thing we can have to make sure the customer understands what they could do wrong to make the product dangerous,” said Spike Babaian of Vape NY in an interview with Good Morning America.

    making-of-a-provari-2

    A quick safety guide

    Media reports don’t tend to cover why or how these devices exploded, devoting attention to the more sensational aspects of the victim’s injuries.

    While there’s very little argument that e-cigarettes are safer than traditional cigarettes, users do take risks when they tamper with or modify their devices.

    Some e-cigarette models and makes are more potentially hazardous than others, but most people would be surprised at which ones are more likely to explode. The majority of cases actually involved rechargeable cigalikes and not mods or personal vaporizers.

    Cigalikes often have a built-in USB port to charge the device. Most often made in China, their poor-quality electronic designs and components rarely if ever undergo quality testing. Users run the risk of overcharging the battery, which can ultimately cause the system to fail and the battery to explode.

    Here are five guidelines for proper use:

    1. Buy from a reputable manufacturer. Ideally, stick with a device made in the U.S. The reason is simple: Quality standards are practically nonexistent in China. While more expensive, U.S.-made devices are subjected to much more rigorous quality testing.
    2. Follow battery guidelines for usage, storage and charging. Do not use incompatible batteries and chargers; only use the battery charger and power adapter that come with the battery. Don’t plug your device into computers or other USB-capable devices.
    3. The best and safest devices use batteries that can be removed from the unit when charging. Batteries can also vent when in your pocket or purse and can quickly short out and cause a fire. Store your battery in a storage container and don’t leave a battery near metal objects.
    4. Don’t stack multiple batteries. The e-cigarette mod explosions have involved units with two batteries stacked for higher voltage. Ensure your unit has both electronic and physical safety features built in.
    5. Protect the device from extreme temperatures such as excessive heat or cold, and don’t get the unit or battery wet. Avoid dropping the device or putting the battery in contact with metal objects such as coins, keys or jewelry.
    6. Don’t overcharge the battery or leave it plugged in unattended when you’re asleep or away from the home. While the chargers have a cutoff and are supposed to stop charging when fully charged, they’re made in China, where, again, there is a lack of quality control. If the cutoff circuit fails, the battery will overcharge.

    provape-team

    Is higher power always better?

    Some vapers and “cloud chasers” like to push the limit in order to satisfy their desire to create large plumes of vapor. But in modifying their devices, they take extra risks. The SFATA implores consumers to consult with established resellers to ensure proper configuration. Reconfigurations such as multiple batteries and coils can tax a battery’s capacity and cause the battery to “vent” or overheat.

    “If you notice your battery getting hot or swelling, get it out of the mod to break the circuit and get it away from you,” said industry expert Nick “Grimm” Green. “A warm battery or mod is the first sign that something is not right.”

    Even ProVape, the largest vapor hardware company in the U.S. and maker of the ProVari, does not support devices with multiple batteries. “Any device that stacks two or three batteries is a big safety risk,” said David Flagg, ProVape CEO.

    “ProVape makes larger, single-battery devices that are both safe and satisfying. The average user doesn’t need 100+ watts to get off of cigarettes,” he said. “The first ProVari was a 12-watt device that successfully helped over 400,000 people get off of cigarettes.”

    Flagg said that anytime you have 150 watts near your mouth, there’s much higher risk of a faulty component, especially when the product is from China, where there’s little to no quality control. “They may claim their product is 150 watts but when it’s tested, it’s producing much less power. The battery label may state that it’s a 1,500mAh when it’s really only 900mAh.”

    When multiple cells become unbalanced, one battery can start overcharging the other cells and cause a thermal runaway. In short, a single-cell device is always going to be the safest.

    Flagg said ProVape also doesn’t sell higher-power devices (100+ watts). Not only is such power unnecessary, according the firm, but it is also less safe. “This high power level can overstress batteries and overheat e-liquids, which could release more chemicals,” said Flagg.

    Designed by aerospace and military engineers to the highest standards, and made in the U.S., ProVaris are subjected to at least three months of rigorous quality testing before they’re allowed to go on the market, according to Flagg. Each individual unit is inspected more than 20 times before shipping.

    What the future holds

    The biggest unknown is how device manufacturers will be able to comply with the FDA’s regulations for the e-cigarette industry issued in May. Unless the grandfather date is changed, any device made before Feb. 15, 2007, will have to be subjected to an arduous and prohibitively expensive (for most) premarket tobacco product application (PMTA) with no guarantee of FDA approval.

    The FDA’s regulations specifically recommend that manufacturers include plans for addressing the likelihood of use and foreseeable misuse leading to overheating, fire and explosion during operations, charging, storage and transportation for distribution.

    Plus, if the aerosolizing apparatus includes the battery, the FDA recommends that amperage and battery mAh rating, battery type, voltage output, and testing certificates for the battery be included in the PMTA.

    Temperature control at this point is only temperature “guessing,” Flagg said. “If the device is not properly controlling temperature, you may be overheating or cracking the e-liquid in a higher-power device, causing further harm.”

    “People who switch from tobacco cigarettes to [personal vaporizers] shouldn’t have to worry about their safety,” Flagg said.

  • Sounding the alarm

    Sounding the alarm

    Having severely curtailed its tobacco industry, Canada is now going after the vapor business.

    By Luc Martial

    Luc Martial is a 25-year veteran of the tobacco wars in Canada, having held key postings in the tobacco control and national health communities, the federal government (Health Canada), and the industry. As a government relations expert and lobbyist, Martial continues to argue and fight for public accountability in governments.
    Luc Martial is a 25-year veteran of the tobacco wars in Canada, having held key postings in the tobacco control and national health communities, the federal government (Health Canada), and the industry. As a government relations expert and lobbyist, Martial continues to argue and fight for public accountability in governments.

    Fourteen years ago, I sounded the alarm, warning that Canadian governments were about to ban the display of tobacco products at retail. The market in Canada was about to go dark. Such a political initiative made no tobacco-control sense: At the time, 50 percent of each tobacco package was already covered by government-mandated graphical health warnings. (Today, the health warnings in Canada cover at least 75 percent of the pack surface; Quebec mandates 98 percent.)

    Prominently positioned within 40,000 points of sale across the country, these warnings had previously been touted as an important public health communication tool, allowing governments to warn potential new consumers against smoking, discourage current smokers from continuing and support those trying to quit.

    The industry, unfortunately, did not react swiftly or concertedly. Perhaps it couldn’t imagine that governments would abuse their authority to the point of publicly undermining their own public health agendas. But just walk into any corner store in Canada today and you’ll see just how far governments can go when left unsupervised.

    So what does this have to do with the vapor industry? Well, quite simply, as far as Canada is concerned e-cigarettes and associated products are the new tobacco. And governments are about to do to the vapor industry what they did to the tobacco industry.

    In Canada, the vapor industry is facing both federal and provincial governments, intent on overregulating their products and activities. It is worth noting at the outset that Canadian governments have a low tolerance for accountability. Public consultations have been marketed to the masses as due diligence and fair play, but to any experienced stakeholder, such consultations are just window dressing. Canadian governments have the authority—and predisposition—to arbitrarily destroy any industry they dislike.

    EMERGING MARKET AND LAW

    E-cigarettes, as a product category, first saw the light of day in Canada in 2007. They were sparsely sold outside of regular distribution channels and perceived mostly as a gimmick. But things changed quickly. Two years after the introduction of e-cigarettes into Canada, the federal government issued a public advisory, warning that vapor products had not been verified for safety by Health Canada and that the public should be apprehensive about ingredients such as propylene glycol and nicotine.

    Nonetheless, between 2009 and 2012, the e-cigarette industry in Canada grew exponentially. Innovations in vaporizers and related accessories, such as batteries, tanks and e-liquids, were well-received. Businesses, including general retail and specialty vape shops, increasingly found commercial value in distributing these new products.

    As for consumers, they came in droves. With and without nicotine, e-cigarettes allowed people to quit smoking tobacco where other cessation devices had failed. As a long-standing tobacco control expert, I was quick to recognize the potential of e-cigarettes in providing an alternative to minors who otherwise would experiment with combustible cigarettes. But you don’t have to be a tobacco control expert to figure that out—it’s common sense.

    By 2013, the government estimated that 9 percent of Canadians aged 15 and over—2.5 million people—had tried e-cigarettes. Many users were existing tobacco smokers, and only 25 percent of those surveyed reported that their most recently used e-cigarette dispensed nicotine. Consumers were turning to e-cigarettes as a way to never start smoking, reduce their tobacco consumption or quit altogether (2013 Canadian Tobacco, Alcohol and Drugs Survey).

    Interestingly enough, e-cigarette products were never marketed as health or smoking-cessation devices. That promotional momentum was purely self-generated among consumers. Adding to the popularity of these products, some physicians started reporting high smoking-cessation success rates among e-cigarette users.

    So how did the federal government respond? Underwhelmingly supportive. Instead of recognizing the promise presented by e-cigarettes, the government chose to create fear about using and selling these products. Federal government inspectors began arbitrarily issuing cease-and-desist letters to domestic distributors, general retailers and specialty shops. To their credit, many vape shop owners challenged the government, refusing to either cease or desist.

    Although the federal government ensured that no e-cigarettes or accessories containing nicotine were imported into Canada, domestically sourced product remained and prospered.

    Despite a March 2015 parliamentary review and regulatory action report, the federal government has yet to introduce a regulatory framework for e-cigarettes. But make no mistake; serious and stringent federal regulations are set to emerge. Fearing the “renormalization” of tobacco—through mimicry—along with a gateway effect, the Canadian government is considering regulating the new category under existing tobacco or pharmaceutical frameworks.

    As for provincial governments, their recent regulatory efforts have not only compared e-cigarettes to traditional tobacco products but even paired them with combustible cigarettes. Effectively, seven out of Canada’s 10 provinces now have convoluted laws regulating e-cigarettes/vaporizers and their accessories. Provinces have either defined e-cigarettes as tobacco or developed product-specific legislation.

    Current regulations include: prohibiting sales to those under age 19; banning the use of e-cigarettes in public places, restaurants, bars and outdoor patios; banning e-cigarette use in cars if a person under age 16 is present; banning displays and product signage in general stores; restricting displays and  product signage in adult-only stores; banning product sampling and instructional demonstrations; and banning promotions, advertisements and marketing activities overall.

    The most outrageous abuse of authority can be found in Quebec, Canada’s second-most populous province. Arguably the most anti-tobacco and anti-business jurisdiction in Canada, Quebec’s politicians in November 2015 introduced amendments to their tobacco law that set a dangerous precedent for all industries. Despite the clear differences between the product categories, Quebec defines e-cigarettes as tobacco. With the exception the tobacco flavoring ban thus far, all tobacco rules now apply to e-cigarettes, as well. One of the law’s provisions effectively excludes retailers from an exemption previously afforded to all industry stakeholders. This exemption? The ability to promote and advertise product within the trade. As outrageous as it may seem, it is now against the law in Quebec for manufacturers or distributors to: (1) show their products to retailers, either at trade shows or during in-store visits; (2) provide promotional samples to retailers; (3) send promotional information or advertising directly to retailers; or (4) allow retailers to access company websites to view and order product. It is also against the law for manufacturers or distributors to advertise and sell e-products through the internet, or to promote the category using social media. If a manufacturer or a distributor is located in Quebec it becomes illegal for them to advertise in a foreign or domestic magazine that is distributed in the province.

    If e-cigarettes are such an obvious benefit to smokers who want to quit and an ideal alternative for youth who would otherwise start smoking, then why are governments acting this way? The answer is that what’s currently happening is not about health or safety—it’s about politicians and anti-tobacco groups. Anti-tobacco groups rely on government funding derived from their attacks on all things remotely associated with tobacco, making e-cigarettes a perfect new target. By depicting these products as a potential threat to Canada’s tobacco control agenda, they are generating new wind for their sails. Out comes their playbook of orchestrated fear, statistical pump and dump, government manipulation and a martyred battle against Goliath. Consequently, to protect their reputations and funding, governments and anti-tobacco groups have every interest in publicly describing e-cigarettes as a gateway to tobacco.

    Left unsupervised and unchallenged, Canadian governments can be expected to introduce ever-increasing and unwarranted regulations against the vaping industry.

    WHAT TO DO?

    The vapor industry has an advantage not usually afforded to others. It knows who the enemy is and has seen its playbook. It should act swiftly and concertedly, before things go too far. To help prevent things from getting worse, stakeholders should consider the following actions:

    • Be present, everywhere, and insist on keeping everyone honest.
    • Sustainably expose malfeasance within governments and anti-vaping groups.
    • Work toward securing product-specific legislation for e-cigarettes, removing vaping products from tobacco regulatory frameworks.
    • Monitor, question and—if necessary—expose government surveys on the vaping industry to ensure accountability.
    • Provide a face to the industry by publicly promoting your consumers and their stories. As for those who quit smoking or avoided starting with the help of e-cigarettes—collect, maintain, distribute and promote their stories to every politician in Canada and the media. Their personal testimonies will likely prove the most effective tool for protecting the vaping industry.

    Welcome to the show.

     

     

     

  • All-American vape

    All-American vape

    Seven quick questions—and answers—about marketing U.S. e-liquids in Germany

    By Stefanie Rossel

    ASA Europe is a pioneer in bringing American e-liquids to Germany. The company, which has been exclusively distributing U.S. e-liquid brands in Germany since June, has its head office, warehouse and a vape shop in Mainz, Germany, near Frankfurt. ASA Europe is a wholesaler for vapor products and runs an online shop. In mid-September, it opened another vape store in Cologne; further shops are scheduled for launch in Frankfurt, Wiesbaden, Mainz and Berlin in the coming months. Vapor Voice spoke with Erdal Zorsoeker, the company’s managing director.

    Vapor Voice: You only recently entered the vaping business—how did this come about?

    Erdal Zorzoeker: We started out with a number of shisha stores in the Rhine-Main area. Germany is a very strong market for water pipe smoking; interestingly, shisha and vaping are closely related in the mindsets of German consumers. Twenty to 30 percent of our shisha customers also asked for vaping devices, so we decided to give it a go. We think that vaping is the market of the future and view it as a serious competitor to combustible cigarettes.

    You are focusing on supplying German vapers with U.S. brands only. Why?

    German consumers are very much interested in U.S. vape brands. In contrast to German e-liquids with their rather classic flavors, juice varieties from the U.S. are much more unusual and complex and often consist of blends—coming, for example, as creamy-milky flavors, such as our “Muffin Man” or “Milkman” flavors, which are currently particularly popular with advanced vapers. Furthermore, American brands have a certain image: In pre-regulation times, there was significant demand for larger e-liquid bottles, to which U.S. brands catered with their 180 mL bottles. Altogether, I’d say that the U.S. vape market is three to four years ahead of the German market.

    Talking about regulations, is it difficult to sell U.S. brands in the German market?

    It is complicated to import liquids containing nicotine into the EU, and it is also very expensive due to high customs duties. With our partner US Vaping, this is no longer an issue: US Vaping represents some of the leading U.S. e-liquid manufacturers and has set up a production site in Paris, France, where they manufacture original U.S. brands flavors in compliance with EU regulations. From May 20, 2017, the revised Tobacco Products Directive [TPD2] will require all e-liquids to be sold in the EU as consumer products to have a maximum strength of 20 mg/mL; nicotine liquid containers can be no larger than 10 mL for refillable and 2 mL for disposable e-cigarettes and must be child- and tamper-proof. Health warnings, instructions for use, a list of all ingredients, the specific product’s nicotine content, and information on addictiveness and toxicity must be displayed on the packaging. We expect to see market consolidation among e-liquid manufacturers in the EU after May 2017; there will be more emphasis on the quality and processing of the flavors. Currently, vape stores are allowed to manufacture their own liquid in small-scale production; this won’t be possible anymore after TPD2 has been enforced.

    So which products do you have on offer, and who are your customers?

    We offer a range of vaping devices from InnoCigs, Joyetech, Smok, Eleaf, Uwell and others and have recently intensified our cooperation with manufacturers of premium U.S. hardware. Our value-for-money segment retails at around €20 ($22.41), but most of our hardware are high-quality devices that cost around €80 and are suitable for use with the premium e-liquid brands we offer—with an 80:20 ratio of vegetable glycerin and polypropylene glycol, their viscosity doesn’t allow for use in a lower-quality vaping device. As e-liquid brands, we carry such well-known U.S. names as Mad Hatter, One Hit Wonder or Junkie Juice with various flavors and nicotine contents. We are in negotiations with U.S. manufacturers outside the consortium who work in a similar fashion, i.e., with production facilities in the EU, so our e-liquid range is growing. Liquids with a nicotine content of 0 and 3 mg are among our best sellers, whereas those containing 12 or 18 mg are less sought after. Many of our customers are ex-smokers who want to quit with the help of vaping, but there are also newcomers who prefer non-nicotine juices. Many also switch from shisha smoking to vaping.

    Do you also have a house brand?

    Our house brand is currently in the making. We presented some prototypes at the InterTabac trade fair in Dortmund, Germany, this September. The flavor styles are based on popular shisha molasses brands; we see a significant market for such e-liquids in Germany since the country is such a big shisha market. We are planning to launch four proprietary brands for Germany for different price segments, which will be independent from our U.S. brands. One of them, a premium brand, is supposed to be introduced in the States, too, building on its German image. Following the launch of the [U.S. Food and Drug Administration] deeming regulations, we are working on getting our house brand ready by November, the date after which all new e-liquids need to submit a premarket tobacco product application.

    In mid-September, you opened a new store in the city center of Cologne. Can you share your experience so far?

    Cologne has a lot of potential for vaping. Eighty to 90 percent of our customers are first-time vapers, though, and have only little experience with vaping devices, hence a lot of explaining is required. Finding adequate sales staff turned out to be a challenge, since vaping is a complex field with rapid developments. Sales staff must be dedicated vapers and stay informed. We are also still experimenting with the right hardware for tasting our liquids and are thinking about installing a test bar.

    How do you promote your stores and products?

    Mostly through social media. We are planning to start in-store activities soon and will stage a competition at next year’s HookahFair meets VaporFair in Frankfurt, the leading exhibition for vaping in Germany.

  • Sweeping the board

    Sweeping the board

    Sophisticated flavors, cutting-edge manufacturing and impeccable ethics have proved to be a winning formula for Five Pawns.

    By Stephanie Banfield

    five-pawns-2

    Visit any major metropolitan area and you’ll likely encounter a variety of e-liquid manufacturers creating an assortment of products for an industry that has experienced massive growth over the past several years. Although thousands of businesses have rapidly sprung up across the United States, one company—Irvine, California, USA-based Five Pawns—has been mastering the art of proper e-liquid manufacturing since the company was founded four years ago. Armed with a unique name and a distinctly different business model and mindset, Five Pawns stands in a league of its own.

    “I think we are definitely a pioneer in the industry, and we’ve definitely chosen to follow a slightly different path than many have,” says the company’s CEO and executive mixologist, Rodney Jerabek. “I don’t at all like the direction that the industry has been going in recent months, but we are continuing to go down our own path and do things our way. That’s been our way since the beginning: to kind of put the blinders on and not pay attention to the noise that’s going on around us and to continue just to do our own thing.”

    Five Pawns’ beginnings date back to early 2012, when Jerabek met with a Chinese businessman in search of a designer he could collaborate with to successfully brand and package a product he had created.

    “In 2012, I started developing the first five flavors that Five Pawns was based on, and I was just doing that at the time for friends and family that I was kind of turning onto this technology,” Jerabek says. “My background was in branding and marketing, and I had a gentleman call me from China who had a disposable electronic cigarette that he was looking to bring to market in the United States.”

    Although Jerabek was not a traditional cigarette smoker himself, he recognized the potential of the products his client presented and dived headfirst into an five-pawns-4endeavor that would ultimately impact the lives of millions. Today, Jerabek is a vaper, and cigars—as well as the occasionally bummed late-night cigarette—are things in his past.

    “When this guy brought over these disposable devices, the light kind of went on in my head that this product has the ability to change people’s lives,” he says. “But I didn’t like not knowing where the liquid was being manufactured and what it consisted of.”

    Impressed by the product’s potential but less than thrilled with the flavor profiles available at the time, Jerabek set out to raise the bar on e-liquids and develop a line unlike any the vapor industry had seen before.

    “Back then, all of the flavors were very one-dimensional, at best,” he says. “You had your green apple, your cherry, your vanilla. I’m a foodie and a single malt scotch and wine collector, and from traveling around the world in my previous life, I’ve got a pretty sophisticated palate. So I started to question why this product needed to be one-dimensional. Why couldn’t it be more like wine or cuisine? Why couldn’t you taste one thing on the inhale and another thing on the exhale, and then have another flavor linger on your tongue like you would get when drinking wines or fine spirits? So that’s when the quest started to create multidimensional and complex flavor offerings—and that’s how Five Pawns was born.”

    Tapping into his knowledge of and appreciation for sophisticated flavors, Jerabek sought out ingredients that could be combined carefully to create e-liquids that played to the five tastes recognized by a person’s palate—a move that would also provide the vapor entrepreneur with the perfect name for his brand-new company.

    “You’ve got sweet, salty, sour, bitter and umami, which is savory, and each of the first five flavors that I introduced to the market played on one of those five tastes known to the human palate,” he says. “A pawn, by dictionary definition, is something that can be used or sacrificed to further one’s purpose. And I looked at the liquid that we were making and looked at that as being the pawn, and looked at the complexity and the sophistication of the game of chess. It’s a very sophisticated game, and these were very sophisticated and complex flavor offerings or blends that we were putting together. So tying chess imagery with five tastes and the pawn, the name just came together.”

    five-pawns-1With a name for the company determined and a one-of-a-kind line of e-liquids being manufactured, it was time for Jerabek and his team at Five Pawns to begin marketing their products to the masses.

    “Social media obviously was a huge launch pad for us,” he says. “And products that I was making at the time for friends and family started to go viral, and people were sending them to their friends around the world. Then, later in 2012, we started shipping to our first authorized retail partners.”

    As Five Pawns’ products gained popularity among vapers, the e-liquid manufacturer’s presence in the market also progressed as the company worked tirelessly to supply the increasing demands of the burgeoning industry.

    “Back then, there were 13 vapor-specific retailers in Los Angeles and Orange County combined, and today there are thousands,” says Jerabek. “I think our timing was impeccable. With only 13 stores being in existence back then, stores started opening up at a very rapid rate, and people wanted to carry the product. Then we started developing international markets in 2013, and we find ourselves today in 60–70 countries and thousands of stores around the globe. It’s just been a great, exciting, wild ride, and I feel like a lot of it was just impeccable timing on our behalf.”

    Taking things seriously

    Five Pawns may be one of thousands of e-liquid manufacturers operating today, but according to Jerabek, the firm’s production methods and standard operating procedures couldn’t be more different from those found within the company’s competition.

    “Many of the people servicing this market—and specifically within the last six months—are really not doing things ethically to give the industry a good name,” he says. “We’re seeing a lot of things like copyright infringement, unsustainable pricing, inappropriate marketing, which often times utilize immature or cartoon-like graphics and novelty flavor profiles—things like cotton candy and Sour Patch Kids and gummy bears. Those aren’t flavor profiles that, in my opinion, look good to the FDA [U.S. Food and Drug Administration], convert or person looking to switch.”

    In addition to producing flavors that appear to be aimed at immature audiences, some e-liquid manufacturers simply don’t consider the effect their flavor profiles and marketing tactics have on an industry whose purpose is to attract traditional tobacco smokers to alternative products.

    five-pawns-5“I have an 8-year-old daughter, and four years ago, when I would have a dinner party at my house and sit down with her friends’ parents, the conversation would come up about what I did for a living—and back then it was defending science,” says Jerabek. “Today, it’s defending the image that this industry has placed upon itself, where if you do a Google search on vaping and you look at the imagery, it isn’t exactly something a convert even wants to associate with or make the switch to become. And I think that’s a problem.”

    Jerabek also believes that, unlike Five Pawns, many e-liquid manufacturers aren’t striving for long-term success at a time when it’s imperative for every company operating in the vapor industry to take their production processes seriously.

    “I think that there are many companies today that have no intention of going through regulation and have no intention of doing things correctly in the eyes of the FDA,” he says. “And there are a lot of people out there that are just looking to make money in this kind of get-rich-quick gold rush and not really taking into account the things that are necessary to uphold the image of vaping.”

    Five Pawns, in contrast, has been striving since day one to maintain the highest standards of quality possible and to offer their customers access to what they consider some of the best products on the market.

    “Since the beginning, we have been building our standard operating procedures [SOP] and our manufacturing practices to appease the FDA,” says Jerabek. “Knowing that FDA regulation was inevitable, we have been building for that since day one. So we have a state-of-the-art ISO 8 cleanroom environment and full automation with all of our bottling and labeling. We pour in our cleanroom facility gravimetrically rather than volumetrically, and we can be accurate. We’re still a small-batch manufacturer, so when we’re mixing 5-gallon batch sizes we can be accurate to 1/1000 of a gram with every one of our ingredients that gets poured. So our tolerances are extremely tight, and all of our mixing processes are gyro-metric and orbital, so we can guarantee consistency with the blending and emulsification of all of our liquids.”

    Five Pawns also prides itself on being able to provide traceability for every product that is created within its facility.

    “There’s also a traceability element that comes from our gravimetric blend process, where all of our gravimetric scales are Bluetooth-enabled,” Jerabek says. “All those calculations are recorded onto a server in the event that if we ever had to have a product recalled we can go back to every single ingredient poured in every one of the liquids, and we can identify accountability and traceability of what might have happened or if somebody had made an error. We haven’t had that happen yet, but that’s something that is important from an SOP standpoint with the FDA. And in addition to that, all of our automation on our lines allows us to individually batch record, and we enter lot numbers, born-on dates, bottle numbers, etc., so we’re able to have complete accountability and traceability from that standpoint as well.”

    Ready for regulation

    Because it believes in producing only the best possible products, the Five Pawns team supports reasonable FDA regulation that would force e-liquids manufactured by companies from coast to coast to adhere to a certain set of standards.

    “I think that the industry is definitely in a state of turmoil today,” says Jerabek. “The real passion for me behind this industry, the goal for us, is to get people to switch. And I think that in order to continue to provide that option for people, it’s going to involve some regulation. Five Pawns has always been a proponent of some type of reasonable regulation. And we still don’t know what that’s fully going to entail, but regulation is necessary in this industry based on some of the things that I’ve seen happening over the past six months.”

    To ensure its offerings are able to continue aiding those who are attempting to make the switch from tobacco to vapor products, Five Pawns is making every effort to comply with the regulations governing the vapor industry.

    “We are all in on trying to go through the PMTA [premarket tobacco product application] process, and we have contracted with many companies to kind of hand-hold us through that process and build our application and our files,” Jerabek says. “We are in the process of trying to secure our appointment with the FDA, where we can sit down and present to them exactly what we intend on providing with our application, making sure that we have the correct clinical trials, the correct emissions testing, toxicology data and everything that they need in hopes that they come back and tell us that what we’re looking to provide them is going to suffice.”

    Despite an assortment of challenges the company may face throughout the PMTA process, Jerabek is confident that Five Pawns has what it takes to continue business as usual.

    five-pawns-3“We are pro-reasonable regulation; it needs to be a viable pathway that companies can get through so that applications will be approved,” he says. “Today, it’s very unclear. The FDA has been very ambiguous in terms of what they are going to require. But we are all in with our contracted FDA consultants, and we own all of our own intellectual property. Every one of our flavor blends and our products are developed from the molecule up, so we know every constituent that constitutes our e-liquid blends. That’s going to be of much importance when it comes to the FDA and being able to supply them with the data that they need.”

    Although the complications of complying with the FDA’s regulations are constantly looming in the background, Jerabek has never lost sight of the reason he stepped into the vapor scene in the first place, and he remains passionate about the industry that has the potential to dramatically improve the lives of former smokers.

    “One of my most gratifying memories was when a 65-year-old grandmother walked into our Five Pawns tasting bar and wrapped me up in this big bear hug and said, ‘Thank you, thank you, thank you.’ And I said, ‘For what?’ And she said, ‘I have a relationship with my grandchildren again. When I was a pack- or two-pack-a-day smoker, I always reeked like cigarettes; I had tar and nicotine and the yellow stuff on the ends of my fingers—and my own daughter didn’t want me handling my grandchildren.’ And she said, ‘I’ve been able to switch, and I don’t have those restrictions on me anymore, and I have a relationship with my grandchildren that I’ve never had before,’ and she had tears in her eyes. That kind of feedback is the best feedback. To hear that people have been able to switch to our product, that’s the most gratifying part of what we do. And we’ve just scratched the surface in terms of the amount of people that are using these products. I’m excited to further pursue that and to try to get more people to use these products, whether they are Five Pawns products or they are other vapor products. I just think that it’s such an amazing technology, and I’m just excited for more people to experience it.”