Category: News This Week

Small Vapor Businesses to Bear Brunt of U.S. Mail Ban

The outlook for many small vapor companies and online retailers looks bleak following the enactment of new rules that prohibit the U.S. Postal Service (USPS) from shipping e-cigarettes, according to Keller and Heckman’s Azim Chowdhury and Galen Rende.
Writing on The Continuum of Risk law blog, the attorneys discuss the fallout of a recent amendment to the 2009 All Cigarette Trafficking (PACT) Act.
In late December, Congress overturned a veto from former President Trump and voted into law a $2.3 trillion coronavirus relief and government funding bill that contains a provision banning the USPS from delivering vapor products. The USPS was already prohibited from delivering cigarettes and smokeless tobacco products to consumers under the PACT Act. The law passed in December extends the Act’s original definition of “cigarette” to include electronic nicotine delivery systems (ENDS).
Azim Chowdhury
Tobacco and vapor companies may use private services to ship their products to consumers, but the PACT Act requires them to register with the Bureau of Alcohol, Tobacco, Firearms and Explosives and the tobacco tax administrators of the states into which a shipment is made. Delivery sellers are further required to verify the age and identity of the customer at purchase and maintain records of delivery sales for a period of four years after the date of sale, creating substantial administrative burdens.
Critically for the vapor industry, the most popular carriers, Federal Express and United Parcel Service, have recently announced that they would cease all deliveries of vapor products.
The prohibition on the mailing of ENDS is scheduled to take effect after the USPS promulgates regulations clarifying the mail ban, which it is required to do within 120 days of the enactment—i.e., by April 27, 2021.
February 4, 2021
Australian Retail Group Forms Vape Committee
An association of Australian retailers has formed a new Committee to serve as the voice for sellers of vaping products in the country. The National Retail Association (NRA) states that the committee will continue lobbying the government against the “illogical” policy that allows people to buy vaping products freely online from overseas retailers, but not in Australia.
Credit: Patty Jansen
The Therapeutic Goods Administration (TGA) recently ruled that from 1 October, consumers would only be allowed to access nicotine e-cigarettes and vape products with a doctor’s prescription from a pharmacy. The essentially locks out thousands of small businesses that have a proven history of responsibly selling regulated products such as tobacco, lotteries, and alcohol. The NRA is urging any retailer or importer of vaping products to join the NRA’s Emerging Business Committee to have their voices heard in Canberra.
Jeff Rogut, the former CEO of the Australasian Association of Convenience Stores (AACS) has been appointed as advisor and spokesperson for the committee. Rogut has been a spokesperson for retailers for more than 10 years and has strongly supported the rights of retailers and smokers through numerous government submissions and appearances at government inquiries.
Rogut said the NRA believes Australian retailers should be able to responsibly sell nicotine products over the counter in the same way as stores in New Zealand, the US, the UK, Canada, Korea, and other countries around the world.
“Vaping is one of those things that has grown in popularity and there are an estimated half a million consumers of vaping products in Australia,” says Rogut. “The issue is that nicotine is an illegal product and cannot be sold by retailers, and we’ve recently seen the shortsightedness of the government in not allowing convenience stores, tobacconists or anybody else to sell it. They are looking at restricting that to pharmacies, which we are lobbying quite fiercely against. They’re making all of this legislation and regulations without fully understanding the full impact of their decisions.”
The NRA and AACS have long urged the Federal Health Minister to allow small businesses to supply smoke-free alternatives to current consumers of cigarettes and tobacco products. The Chair’s report from a recent Senate Inquiry on Tobacco Harm Reduction agreed with their stance and set out a clear and rational case for making it easy for tobacco users to transition to less harmful smoke-free alternatives.
But Rogut says that the TGA’s ruling goes against this and will make it more difficult and more expensive for consumers to transition away from tobacco products and towards nicotine vape products, potentially leading to an increase in black market sales.
“As we have seen with tobacco, the harder you make it and the more expensive you make it, you drive the products underground,” he says. “The danger for the government is that consumers will move to buying these products from the criminal elements and the ‘black market’ importers, as we have seen happen with tobacco products, and they won’t know what the product is or what it contains. Yes, it might be cheaper and easier to get but from a health point of view it might do more harm than good, and that is the shortsighted thing that the government appears to have overlooked.”
February 4, 2021
Hall Analytical Offers Free Webinar on PMTA Process

Credit: The Blinc Group
Hall Analytical is offering a virtual seminar on Feb. 11, 5-6 pm GMT about the U.S. Food and Drug Administration’s premarket tobacco product application process.
E-liquid and device manufacturers will have an opportunity to take part in a live Q&A session with subject matter experts.
Panelists include David Lawson, CEO, Inter Scientific; Patricia Kovacevic, founder and principal, Regulation Strategy; and Sally McGuigan, principal scientist, Hall Analytical
This session is limited to the first 50 registrants, and therefore places will be offered on a first come, first served basis.
Participants can register here.
February 4, 2021
WHO reappoints Bloomberg as Global Ambassador

Photo: Bloomberg Philanthropies
The World Health Organization (WHO) will reappoint Michael R. Bloomberg as the WHO Global Ambassador for Noncommunicable Diseases (NCDs) and Injuries.
Both as mayor of New York City and as a philanthropist, Bloomberg made it a top priority to combat noncommunicable diseases and their underlying causes. As mayor, he introduced the Smoke Free Air Act and other public health initiatives. His foundation, Bloomberg Philanthropies, promotes policy solutions around the world that reduce rates of noncommunicable diseases like cardiovascular disease and hypertension as a result of factors such as poor diet while also supporting road safety and drowning prevention initiatives.
Vapor advocates have criticized Bloomberg for his rejection of tobacco harm reduction (THR) strategies, and his philanthropies’ attempts to influence policymaking around the world.
Recently, the International Network of Nicotine Consumers Organizations urged Vietnam to exercise “true independence” in its regulation of THR products, citing concern that the country’s regulations would be drafted by Bloomberg-financed organizations.
Anti-tobacco groups welcomed Bloomberg’s reappointment. “Michael Bloomberg is uniquely qualified to focus global attention on this public health crisis and serve as a catalyst for life-saving action around the world, and we look forward to partnering with him and the WHO on proven policy solutions to reduce NCDs and save lives,” said Matthew L. Myers, president of the Campaign for Tobacco-Free Kids and the Global Health Advocacy Incubator, in a statement.
February 4, 2021
Broughton Publishes Summary of FDA’s Final PMTA Rule
Illustration: Broughton Nicotine Services
Broughton Nicotine Services has published a summary of the U.S. Food and Drug Administration’s rule for the premarket review of new tobacco products.
Released on Jan. 19, the FDA’s final rule makes amendments and recommendations to the previous rule and helps ensure that PMTAs contain sufficient information for the agency to determine whether a marketing granted order should be issued for a new tobacco product.
The purpose of the rule is to improve the efficiency of the submission and review of PMTAs as well as providing applicants with a better understanding of the information a PMTA must contain.
Amongst other topics, the rule addresses:
The submitting of detailed information regarding the physical aspects of the new tobacco product and full reports of information regarding investigations that may show the health risks of the new tobacco product.
Whether the product presents the same or different risks compared to other tobacco products. The FDA requires the submission of these health risk investigations to ensure it understands the full scope of what is known about the potential health risks of a new tobacco product.
Electronic submission of the PMTA.
Post-market reporting requirements for applicants that receive marketing granted orders.
Retention of records requirements for PMTAs
Procedures by which the FDA reviews a PMTA
Broughton Nicotine Services summarized the 516-page recommendations and requirements report into a digestible guide, which is available for download here.
February 4, 2021
Indiana Introduces Annual Bill to Boost Vapor Tax
The Indiana state legislature has begun to debate raising taxes on vaping products … again. The annual introduction centers on a proposed tax rate of $1.56 on a two-pod pack, the equal nicotine content to a pack of combustible cigarettes.
Credit: Davis Mark
Indiana’s traditional cigarette tax of just under a dollar a pack is the 13th lowest in the nation. Legislators are considering a bill to double it, and tax e-cigarettes for the first time, according to an article on wibc.com. Marion County health director Virginia Caine says it’s critical to include e-liquids in the bill.
She says vaping among teenagers has doubled in the last two years, wiping out any progress the state has made in reducing teenage smoking. Recent U.S. CDC reports say that teen smoking rates declined in 2020. Mason Odle, owner of Just Vapors in Fishers, says he fully supports raising the cigarette tax, but argues e-liquids shouldn’t be included.
He contends e-cigarettes are a more popular and effective means of quitting smoking than FDA-approved products like nicotine gum or patches. That brought a fierce pushback from health officials, who point out the FDA has specifically banned vape manufacturers from marketing their product as a stop-smoking aid until they produce more evidence that it works. And Caine says there are serious concerns about lung damage from vaping.
Former Libertarian candidate for governor Don Rainwater argues increasing cigarette taxes would punish store owners at a time when they’re already reeling from the coronavirus pandemic. But the main objection from House Public Health Committee members centered on the lack of a specific plan for the proceeds from the tax. A vote has been put off till next week to add language earmarking the money for health programs.
Governor Holcomb and House and Senate leaders have all said a cigarette tax hike isn’t on their agenda, without flatly ruling out the possibility. The House approved an increase in 2016 and 2017, and a vape tax in 2019. All three times, the proposals died in the Senate.
February 3, 2021
New EU Restrictions Worry Harm Reduction Advocates
Credit: Elsa Donald
Vapor advocates have expressed concern about reports that the European Commission is potentially seeking to ban flavored e-liquids.
According to the U.K. Vape Industry Association (UKVIA), leaked EU plans for a “Tobacco Free Generation” would increase controls on e-cigarettes, despite their proven value in smoking cessation efforts.
This latest EU plan could include the following proposals:
Extend taxation to “novel tobacco products,” including e-cigarettes
Extend the coverage of smoking bans, both indoor and outdoor, to vaping
A full ban on flavored products
The enforcement on plain packaging for vaping products
John Dunne
“We at the UKVIA are seriously concerned by reports that the European Commission is considering such regressive action, which will likely reduce the positive impact that vaping has on people’s lives,” said John Dunne, director general of the UKVIA.
“While we completely support efforts to combat the scourge of cancer in our society, the creation of artificial barriers to harm-reduction products is clearly counterproductive. Adult smokers must be empowered to make positive change, rather than being discouraged.
“Cancer Research UK, along with the Royal College of GPs, have confirmed vaping’s significant harm-reduction compared to cigarettes, as well as its efficacy in smoking cessation. The EU’s plans are out of step with this latest evidence.
“It is vital that the U.K. now take advantage of the legislative and regulatory independence afforded by Brexit, to safeguard this country’s proportionate, evidence-based approach to vaping.”
The document was leaked ahead of the announcement today of the EU’s “Beating Cancer Plan,” which among other things calls for reducing tobacco use to less than 5 percent of the EU population by 2040.
February 3, 2021
Chicago Files Suit Against Vapes.com for Illegal Sales
The City of Chicago has filed a lawsuit against Equte LLC, parent to Vapes.com, for “marketing and selling flavored vaping products.” The company allegedly marketed its products to youth, alongside selling flavored products. Four months ago, the Chicago City Council banned the sale of flavored vaping products favored by teens, but exempting flavored tobacco products, including menthol cigarettes.
Credit Emily Ralph
The latest in a string of city lawsuits against the e-cigarette industry follows an investigation by the Department of Business Affairs and Consumer Protection. It identified the two companies as having violated the flavored tobacco ban, according to the Chicago Sun Times.
“E-cigarettes are unhealthy and addictive, and businesses deliberately target young people in the hope they’ll develop lifelong customers,” Mayor Lori Lightfoot was quoted as saying in a news release. “The City of Chicago’s message to vaping companies is clear: If you break the law, we will go after you, especially if you try to sell to our youth.”
O’Shea originally championed a much stronger, citywide ban on all flavored tobacco products. He was forced to settle for less — a ban on “flavored liquid nicotine products” — after running into a buzz-saw of opposition from gas stations, convenience and tobacco stores. They accused O’Shea of kicking them when they’re down, with their businesses hurting during the pandemic.
O’Shea could not be reached for comment. The press release quoted him as saying that this lawsuit “not only takes these companies to task, but sends a clear message to anyone who thinks they can push vaping products onto our kids and get away with it.”
February 2, 2021
Surprise: Study Finds Vapers Vape in No Smoking Zones
A recent survey from South Korea found that 8 in 10 South Korean e-cigarette users said they had secretly smoked stealthily in non-smoking areas. At 83.5 percent, the vast majority of e-cigarette users said they had vaped illegally, dwarfing the 16.5 percent who said they did not participate in such activity.
Credit Sungho Song
Under the National Health Promotion Act, those who use e-cigarettes in non-smoking areas can be fined, just like for smoking conventional tobacco cigarettes.Heat-not-burn products were not mentioned in the study and would face similar fines, according to a story by The Korea Bizwire.
A research team from the Asan Medical Center conducted a survey of 7,000 men and women between 20 and 69 years of age. Of the total, the number of people who had used e-cigarettes in the previous month stood at 394. Among vapers, 44.6 percent between 20 and 34 years old, while men accounted for 74.1 percent of the total.
Most participants said the smoked at home indoors, which accounted for the largest share at 46.9 percent, followed by private cars at 36.9 percent and outdoor non-smoking areas at 28.3 percent. Men and women accounted for 44 percent and 55.6 percent of the violators, respectively, indicating that more than half of female vapers users are vaping secretly at homes.
February 2, 2021
TPB Announces $250 Million Private Offering

Photo: Tobacco Reporter achive
Turning Point Brands (TPB) announced the proposed private offering of $250 million aggregate principal amount of its senior secured notes due 2026. The notes will bear cash interest semi-annually beginning in 2021. The notes will be TPB’s senior secured obligations and will be guaranteed on a senior secured basis by each of TPB’s wholly owned domestic subsidiaries (except for certain specified subsidiaries).
TPB intends to use the proceeds from the offering to repay all obligations under and terminate its existing term loan and revolving credit facility; to pay related fees, costs and expenses; and for general corporate purposes. The offering is subject to market conditions.
TPB also announced that in connection with the offering, it intends to enter into a new $25 million senior secured revolving credit facility. The offering is not conditioned on the entry into the revolving credit facility.
In connection with its proposed offering, TPB announced certain preliminary operating results for the fourth quarter and full year ended Dec. 31, 2020.
TPB estimates that for the fourth quarter of 2020 net sales will be between $103.5 million and $105.5 million, income before taxes will be between $16 million and $17 million and adjusted EBITDA will be between $25 million and $26 million. Each of net sales and adjusted EBITDA will be near or above the high end of TPB’s previously disclosed guidance for the fourth quarter of 2020. TPB plans to release its full year end 2020 financial results on Feb. 10, 2021.
The company will hold a conference call to review fourth quarter and fiscal year 2020 results on Feb. 10.
February 2, 2021