Category: News This Week

  • U.S. Traditional Smoke Sales Continue to Outperform Vapor

    U.S. Traditional Smoke Sales Continue to Outperform Vapor

    Combustible cigarette sales are slumping slightly, but still continuing to perform better than expected while vapor products fall more than 17 percent, according to the latest Nielsen convenience store report.

    Overall sales volume for traditional cigarettes was down 2.1 percent for the four-week period that ended Aug. 22, according to the latest Nielsen. By comparison, the sales volume was down 0.8 percent in a four-week period in May, according to the Winston-Salem Journal.

    Electronic cigarettes sales, by contrast, are down 17.4 percent for the same four-week period ending Aug. 22. Vapor sales have been on a continuous decline for six months since the Food and Drug Administration implemented its latest round of heightened regulations on the products.

    It should be noted that Nielsen does not track brick-and-mortar vape shop sales. Industry experts say that data could have a major impact on market share if it were to be included. 

    The FDA regulations have depressed the demand for closed-pod cartridges that provide the nicotine, with No. 2-selling Vuse of R.J. Reynolds Vapor Co. being the lone exception, according to the news report.

    “The Nielsen data continues to show the decline in cigarette sales moderating to a pace that is only about a quarter of the rate of contraction in the second quarter of last year — before the much-enhanced attacks on vaping,” said David Sweanor, an adjunct law professor at the University of Ottawa and the author of several e-cigarette studies.

    Overall e-cigarette sales-volume growth has declined steadily since Nielsen’s Aug. 10, 2019, report, when it was up 60.2 percent year over year. The latest FDA restrictions on the sector debuted Feb. 6. The FDA raised the legal smoking age from 18 to 21 on Dec. 20.

    Those restrictions foremost required manufacturers of cartridge-based e-cigarettes, such as Juul Labs, R.J. Reynolds Vapor Co., NJoy and Fontem Ventures, to stop making, distributing and selling “unauthorized flavorings” by Feb. 6, or risk enforcement actions.

    The menthol and tobacco flavors still allowed for cartridge e-cigarette flavorings are the same as those that are legal in traditional cigarettes. Juul’s four-week dollar sales have dropped from a 50.2 percent increase in the Aug. 10, 2019, report to a 32.9 percent decline for the latest report. By comparison, Reynolds’ Vuse was up 56.7 percent in the latest report and NJoy down 40.8 percent.

    Juul has a 57.8 percent market share, unchanged from the previous report. Vuse is at 23.6 percent, up from 20.4 percent, while NJoy at 5 percent, down from 11.3 percent, and Fontem Ventures’ blu eCigs at 2.7 percent, down from 3 percent.

    Pricing and availability may be a motivating factor in the slowing of the decline of combustible cigarette sales. The Covid-19 crisis did slow product shipments from China and lower gas prices coupled with restricted travel have given consumers more expendable income, according to reports.

    Interestingly, cigarette sales in Australia are plunging faster than any time in history as smokers turn to  vapor products. There were 410 million fewer smokes sold in the country than two years ago.

    Cigarettes in Australia are more expensive than anywhere else in the world at $32 per pack of 25 sticks.

    Last year, about 2132 million cigarettes were sold in Australia – 193 million fewer than 2018, and following a 217 million drop the previous year.

  • Juul to Cut Jobs, Considers Exit From Asia and Europe

    Juul to Cut Jobs, Considers Exit From Asia and Europe

    Juul starter kit

    Juul Labs has said it is planning another significant round of layoffs and considering halting sales across Europe and Asia. That could mean pulling out of as many as 11 countries and shrinking the company’s footprint to its core markets of the U.S., Canada and the U.K., according to a story in the Wall Street Journal.

    Juul cut about one-third of its 3,000 workers earlier this year and already has halted sales of its vaporizers in several countries. The once fast-growing company has been scaling back its operations to combat a sharp drop in sales. It currently has about 2,200 employees, the story states.

    It’s the third major shakeup since September as Juul attempts to revamp its strategy in the face of heightened scrutiny of vaping.

    The bulk of the cuts will hit Juul’s marketing department. Juul said it would cut 150 jobs and phase out the position of chief marketing officer, adding to 500 reductions announced in October. In total, the company is slashing 650 jobs, or 15 percent of its global workforce.

    “As the vapor category undergoes a necessary reset, this reorganization will help Juul Labs focus on reducing underage use, investing in scientific research, and creating new technologies while earning a license to operate in the U.S. and around the world,” Juul CEO KC Crosthwaite was quoted as saying.

    The company’s future advertising efforts will focus on direct marketing. It’s still enforcing its strategy of avoiding TV, print and online marketing.

    Juul said it will continue to invest in its product team as the company explores new technologies to combat underage use. The company has reportedly submitted to the U.S. Food and Drug Administration a new version of its vaporizer designed to unlock only for users at least 21 years old.

    Juul’s value has deteriorated as concerns mounted about the health risks of vaping and U.S. regulators pushed for a crackdown on e-cigarettes. Juul was also criticized for selling flavored pods that became popular with teens. Altria, which invested $12.8 billion for a 35 percent stake in Juul in 2018, recently wrote down its investment by $4.5 billion.

  • Voom Submits PMTA to U.S. FDA for Refillable System

    Voom Submits PMTA to U.S. FDA for Refillable System

    The manufacturers of the Voom refillable vaping device have submitted a premarket tobacco product application (PMTA) to the U.S. Food and Drug Administration (FDA). The Voom also has a closed-pod version, but that device was not mentioned in the PMTA announcement.

    In an email to Vapor Voice, a Voom Labs representative only stated that a PMTA had been submitted to the FDA, no other information was included.

    The Voom open system has the exact same specifications of its closed-pod cousin, only with a refillable pod. The Voom closed-pod system may have the closest representation to the draw of an analog cigarette of any device on the market, according to a review in Vapor Voice.

    “Speaking of the draw, the VOOM may be the closest representation of an analog cigarette to date. The airflow is very restricted, resulting in a satisfying draw with rich flavor that doesn’t incorporate any harshness or spitback,” the review states. “Additionally, the soft plastic material and thin design work well for hands-free vaping. Although the body is made of metal, the overall device is light enough to carry between the lips or teeth, depending on personal preference.”

  • Vapor Firms Request Delay of PMTA Deadline

    Vapor Firms Request Delay of PMTA Deadline

    Photo: Nmedia | Dreamstime.com

    Keller and Heckman has asked the U.S. Food and Drug Administration to postpone its Sept. 9 deadline for filing premarket tobacco applications (PMTAs) by six months because of the Covid-19 pandemic.

    On behalf of a group of small vapor product manufacturers, retailers and trade associations, the law firm filed a citizen petition asking the FDA to postpone the PMTA due date until March 8, 2021.

    Many of Keller and Heckman’s clients have experienced delays in preparing their applications because of the coronavirus. Without an extension, small vapor companies will either have to file incomplete PMTAs or forego submission altogether, according to Keller and Heckman. This would force them to layoff thousands of employees, close their doors permanently, and remove from the market less risky vapor products that addicted adult smokers rely on to move away from cigarettes, the law firm said.

    The current PMTA deadline was set by a federal district court in Maryland as part of a lawsuit filed by anti-vaping groups challenging an earlier August 2022 deadline established by FDA through guidance issued in 2017.

    The petition specifically asks FDA to request from the district court an extension on the court-imposed deadline that would apply only to small manufacturers that demonstrate to the agency that they have been working in good faith to complete PMTAs by the Sept. 9, 2020 cutoff and have otherwise taken steps to ensure that their products will not contribute to underage use.

     

     

  • Last Call: Vapor Industry Braces for Impact of PMTAs

    Last Call: Vapor Industry Braces for Impact of PMTAs

    vaper

    In just one week, the vapor industry could be drastically different. Thousands of businesses could close. Millions of products are most likely going to be removed from store shelves. Premarket tobacco product applications (PMTA) are due to the U.S. Food and Drug Administration (FDA) on Sept. 9 and the vapor industry is bracing for the impact the regulatory deadline will have on businesses and consumers alike.

    To date, only a small percentage of vapor product manufacturers have publicly announced that they submitted PMTAs that had been accepted by the FDA. All the major tobacco companies have filed PMTAs for electronic nicotine delivery systems (ENDS). Avail Vapor, E-Alternative Solutions, Charlie’s Chalk Dust and Prism are just a few smaller companies that have also publicly announced PMTA filings.

    The FDA has stated that there will not be a grace period for retailers to sell previously purchased product. This has confused vape shop owners who are wondering what products they will be able to sell on Sept. 10. On Aug. 25, this lack of clarity prompted a group of retailers to write a letter to the FDA urging the agency to release a list companies that filed a PMTA. The FDA then announced a week later that the agency would break from tradition and let retailers know what products can be sold, but when that list will arrive is still a question mark.

    In a press note on Aug. 31, director of the FDA’s Center for Tobacco Products, Mitch Zeller, wrote that the FDA “plans to make publicly available a list of the deemed new tobacco products” that are subject to the Sept. 9 deadline and were on the market as of Aug. 8, 2016. “However, before doing so, we will need to ensure that the publishing of any such information complies with federal disclosure laws and regulations as only certain types of product information from applications can be lawfully disclosed,” Zeller wrote.

    The FDA also states that it expects numerous PMTA submissions and the one-year review timeline may be exceeded. Zeller acknowledged “there are over a million deemed products” currently listed with the regulatory agency.

    “Even if applications are submitted for only a portion of those products, the likelihood of FDA reviewing all of these applications during the one-year review period is low, given that this would be an unprecedented number of applications and several orders of magnitude greater than anything the Agency has experienced,” Zeller wrote. “Depending on the number of new applications we receive by the deadline—which could be anywhere from a few hundreds of thousands to millions—as a matter of practicality we may not be able to fully complete review of all tobacco product applications that we receive by Sept. 9, 2020 within the year.”

    The Vapor Technology Association (VTA), a vapor industry advocacy group, echoed the FDA in advising retailers to ask manufacturers for specific information on whether their products are covered by a PMTA. Numerous distributors have told Vapor Voice that they intend to buy back any product that their retailers will no be able to sell.

    “Each manufacturer may have a different method of providing you with evidence that it has filed PMTAs for its products, including, for example, a redacted version of its Cover Letter or proof of submission through the electronic filing portal,” said VTA Executive Director Tony Abboud. ”While FDA is not currently performing in-person inspections, they will likely resume soon after COVID-19 restrictions are lifted. So, if inspections resume before FDA publishes the list of products for which PMTAs have been filed, you can insulate yourself from potential exposure by having on hand documentation from your manufacturers regarding the product that you have on the shelves.”

    Policing retailers may prove difficult for the FDA in the short term, however. In March, due to Covid-19, the FDA temporarily postponed compliance checks and vape shop inspections. This suspension of in-person retail enforcement activity is likely to continue until Covid-19 restrictions begin to lift. However, the FDA has stated it plans to continue monitoring social media, industry-related websites and publications, and issue warning letters when required.

    It should also be noted that, in February of this year, the FDA outlined and reiterated its enforcement priorities. The FDA stated that it would focus enforcement efforts for flavored cartridge-based ENDS products; all other ENDS products for which the manufacturer has failed or fails to take adequate measures to prevent access or use by minors; any ENDS products that are targeted to minors or which are likely to promote use by minors; and manufacturers that have not filed PMTAs by the deadline.

    The most important thing for manufacturers is to get PMTAs submitted on time, according to Zeller. The FDA announced that if a PMTA has any deficiencies, the agency will address those issues in writing. “Although we expect high quality and complete applications to come in by Sept. 9, if we do find deficiencies, it is likely FDA will issue a Deficiency Letter with a 90-day deadline for companies to respond,” Zeller wrote. This would give companies an opportunity to solve those issues rather than the agency outright rejecting the application.

    The FDA stated that it would also devote as many resources as possible under the circumstances to help expedite the PMTA review process and the agency vows to treat all applications equally.

    “As always, FDA intends to be fair in allocating FDA resources to review applications from both small and large manufacturers and importers, and from applications received through different pathways,” Zeller stated. “Additionally, we intend to maximize the resources that we have to review the most products in the shortest timeframe … To help with this, we are refining our review processes to shorten the overall review time.”

  • Flavored Vapor Ban Upheld in Edina, MInnesota

    Flavored Vapor Ban Upheld in Edina, MInnesota

    A flavored tobacco ban enacted by the Edina City Council in mid-June will remain in place after a federal judge dismissed a complaint brought against the city and city manager Scott Neal by R.J. Reynolds Tobacco Company, R.J. Reynolds Vapor Company, American Snuff Company, and Santa Fe Natural Tobacco Company, along with Vernon BP and Lang’s One Stop Market, both of which are retailers.

    On Monday, U.S. District Court Judge Patrick J. Schiltz denied the plaintiffs’ motion for a preliminary injunction and granted the defendants’ motion to dismiss the case. The ruling came the day before the ban was to go in effect on Sept. 1, according to a story on Halfwheel.com.

    The suit claimed that the city was prevented from enacting such a ban by the Family Smoking Prevention and Tobacco Control Act, the 2009 federal law which empowers the U.S. Food and Drug Administration to regulate tobacco products, and prohibits state and local governments from enacting any standards or laws that either differ from or add on to federal law, such as the case of a city or county enacting a ban on the sale of flavored tobacco products.

    The plaintiffs claimed that the county’s ban stands as an obstacle to the purposes of federal law, which are to promulgate tobacco product standards that can be used at the national level. They said that Congress and FDA have already established that “certain tobacco products, particularly menthol cigarettes, should remain available to adult users of tobacco products.”

    Both complaints seek relief in the form of the ordinances being declared invalid and unenforceable, as well as requesting that the court both preliminarily and permanently issue an injunction that prevents the bans from being implemented and enforced.

    In his ruling, Judge Schiltz maintained that the city was within its right to enact such a ban, being neither expressly or impliedly preempted by federal law. The judge cited several provisions in the federal that allow local municipalities to enact certain laws regarding the sale of tobacco, known as the preservation clause, the preemption clause and the saving clause.

  • Saudi Arabia Ends Unlicensed Imports of E-cigarettes

    Saudi Arabia Ends Unlicensed Imports of E-cigarettes

    Credit: Yasmine Arfaoui

    Saudi Customs have banned the import of shisha, e-cigarettes and all vapor accessories through shipping companies and individuals’ websites.

    In the event that they are imported, they would be confiscated, a fine imposed, and a record of seizure will be registered. Companies licensed by the Saudi Food and Drug Authority (SFDA) are allowed to import such products in commercial quantities, according to an article posted on albawaba.com.

    Saudi Customs also announced three avenues that enable a licensed importer to claim a refund of customs duties. “Re-exporting foreign goods abroad, goods that had a material error, technical errors or errors in evaluation; and goods for which an industrial exemption decision was issued”, via the portal “Faseh.”

    According to the mechanisms for exempting goods returned for export abroad, Saudi Customs have stipulated five reasons for reimbursement of their duties. “Re-exporting them within a calendar year from the date of payment of customs duties, the claim for refund of customs duties is made within six months from the date of re-export, the goods should be from one consignment, it should not be used locally, the value of the taxes levied is not less than SR18,750 ($5,000), and the exporter is also the importer or any other person when it is proven to the Saudi Customs that he has purchased them.”

    The owners of the goods in which a material error, technical errors, or errors in the evaluation occurred, will be able to apply for the refund of customs duties by “obsolescence”. Saudi Customs confirmed that the application for refund of customs duties for goods for which an industrial exemption decision has been issued requires that “the unified importer’s number in the customs declaration is identical with the unified importer’s number mentioned in the exemption decision.”

  • U.S. FDA Will Publish List of E-cigarette PMTA Applicants

    U.S. FDA Will Publish List of E-cigarette PMTA Applicants

    The U.S. Food and Drug Administration (FDA) will release a list to help support retailers. The regulatory agency now says it will break protocol and publish the names of manufacturers and products that have accepted premarket tobacco product applications (PMTAs) on file by the Sept. 9 deadline.

    In a press note on Monday, director of the FDA’s Center for Tobacco Products, Mitch Zeller, wrote that the FDA plans to make publicly available a list of the deemed new tobacco products that are subject to the Sept. 9 deadline and were on the market as of Aug. 8, 2016.

    “And for which a premarket application is submitted by Sept. 9, 2020,” Zeller wrote. “However, before doing so, we will need to ensure that the publishing of any such information complies with federal disclosure laws and regulations as only certain types of product information from applications can be lawfully disclosed.”

    The news comes just one week after several retail groups submitted a letter to the agency asking for a published list of applicants. The Vapor Technology Association, a vapor industry advocacy group, asked the FDA more than a month ago for a published list.

    The FDA also noted that while the deadline is on September 9, 2020, it will take FDA some time for the agency to compile and confirm that the list is accurate before publication. “The fact that FDA will be publishing such a list is dramatic change from their prior practice,” wrote VTA Executive Director Tony Abboud in an email. “In the meantime, we will do our best to inform you of VTA members which are participating in the process.”

    Zeller stated that the agency requests patience from stakeholders as the agency works through the appropriate processes to ensure the posted information is accurate and compliant with federal laws. In the interim, Zeller stated that retailers and other interested parties should refer to the public statements made by the companies or contact the companies directly to get information about applications they may have submitted.

  • Vaping Group Calls for Continued Pragmatism

    Vaping Group Calls for Continued Pragmatism

    The U.K. Vaping Industry Association (UKVIA) has urged British health authorities to continue their pragmatic policies on vaping.

    Last month, U.K. Health Secretary Matt Hancock announced that Public Health England (PHE) was being scrapped and merged into the new National Institute for Health Protection. PHE has supported vaping as a vital tobacco harm reduction tool.

    In the nicotine business, PHE is best known for its 2015 assertion that vaping is 95 percent less harmful than smoking.

    “Whenever responsibilities are transferred there is a risk that invaluable institutional knowledge and memory is lost. This would be to the detriment of the U.K.’s millions of smokers and vapers and cannot be allowed to happen in this case,” said John Dunne, director of the UKVIA.

    “The UKVIA calls upon the custodians of PHE’s former responsibilities, in the event that they are indeed reallocated, to continue their positive approach towards harm reduction technologies. Independent reviews, studies and statements, all focused on facts rather than hearsay, have been a cornerstone of a successful British vaping industry which supports adult consumers to make a positive change for their health,” Dunne said.

  • Charlie’s Chalk Dust Files First of ‘Multiple’ PMTAs

    Charlie’s Chalk Dust Files First of ‘Multiple’ PMTAs

    Charlie’s Holdings, parent to the Charlie’s Chalk Dust e-liquid brand, has submitted its initial premarket tobacco product application (PMTA) to the U.S. Food and Drug Administration (FDA).

    “Today’s submission marks the first of multiple applications that Charlie’s Chalk Dust (CCD) intends to take through FDA’s approval process as it seeks to create a long-term, robust product portfolio. This is a day we’ve long awaited for in our industry,” stated Charlie’s Holdings’ Chief Operating Officer Ryan Stump in a press release. “After spending nearly $5 million over the past two years on our PMTA preparation and submission, we are extremely excited about the application we filed with the FDA.”

    The release states that Stump believes “that a significant amount of our competitors will not have the resources, desire, and/or expertise to complete the extensive and costly PMTA process.” However, once approved, CCD’s marketing orders would allow the company “to benefit from being one of only a select group of companies responsibly operating in the flavored nicotine product space.”

    The company also announced that it was performing human clinical trials on its products to help detect the biomarkers of exposure associated with smoking combustible cigarettes and determine the nicotine delivery efficiency of CCD products via pharmacokinetic studies.

    “A large team of doctors, scientists, biostatisticians, and data analysts are conducting these time intensive clinical trials,” the release states. “We believe that this kind of study will significantly set our application apart from those that are relying solely on the literature-based approach to this critical ‘in human’ assessment of product performance.”