Kaival Brands Innovations Group, the exclusive U.S. distributor of Bidi Vapor products, has entered into agreements representing potential new distribution to approximately 13,500 locations.
Under the terms of the agreements, Bidi Vapor’s Bidi Stick will initially be activated in 700 locations, with another 1,500 locations expected within the next 90 days. All of the new locations meet Kaival Brand’s and Bidi Vapor’s requirements for customer identification verification and youth-access prevention.
“We are excited to announce these significant new distribution agreements, totaling up to 13,500 new locations, as we look to continue the ramp up of marketing and sales activity for Bidi Stick. Since Bidi Vapor succeeded in its merits case against the FDA vacating FDA’s marketing denial order for ENDS products in August 2022, we have seen a resurgence of interested retailers and potential distributors,” said Kaival Brands President and Chief Operating Officer Eric Mosser in a statement.
“While the FDA continues to move slowly in enforcing against bad actors, major retailers are showing their commitment to e-cigarettes as a category and using corporate discretion to select brands that are committed to youth-access prevention and responsible marketing of adult products. We believe our products fit squarely in this category, and we are hopeful that this positioning will lead to greater revenues for Kaival Brands during 2023.”
“We are excited to increase the reach of the Bidi Stick by up to 13,500 new stores,” stated Russell Quick, president of QuikfillRx, which operates under the name Kaival Marketing Services. “These new agreements represent an immediate impact of 700 new locations to start and we believe represents a vote of confidence that retailers have in us and our products.”
The city of Tempe, Arizona in the U.S. is considering making retailers buy a license to sell tobacco, including e-cigarettes.
A proposal from a council committee calls for a citywide registry of businesses that sell tobacco, along with a process to revoke licenses for retailers who repeatedly sell to minors, according to Frontera Desk.
It also suggests raising the age to buy tobacco products to 21. Federal law already prohibits purchases to anyone under 21, but Arizona does not have a similar state law.
Tempe will hold two community meetings and an online survey in March before the council takes up the issue in April or May.
Kaival Brands Innovations Group reported revenues of $3 million for the fourth quarter that ended Oct. 31, 2022, compared with revenues of $100,000 million for the prior fourth fiscal quarter. Revenues for the full fiscal year were approximately $12.8 million, down from $58.8 million for fiscal year 2021.
Kaival attributed the full-year decrease to the U.S. Food and Drug Administration’s marketing denial orders (later overturned), which temporarily prevented the company from selling its products, and to increased competition in general, which Kaival suspects resulted from lax enforcement by federal and state authorities against subpart and low-priced vaping products that continued to enter the market illegally without FDA authorization.
“Fiscal 2022 was an exceptionally challenging year for us, primarily due to regulatory action by the FDA that was ultimately overturned in August,” said Kaival Brands President and Chief Operating Officer Eric Mosser in a statement.
“For a portion of fiscal 2022, we were prohibited from selling our flavored Bidi Sticks, and our 2022 revenues reflect the significant extended impact of this. The good news is that this impediment is behind us. Moreover, despite the challenges, we accomplished several important milestones during the year which we believe has laid the foundation for renewed growth and progress in 2023, including expanding existing sales channel relationships and initiating significant new ones. We expect and hope that the FDA will continue to pull bad actors from the marketplace, paving the way for companies like ours to provide our products to adult smokers deserving of premium e-cigarette product and experience.”
The vape industry has had a considerable positive impact on the UK economy, according to a new report compiled by the Centre for Economics and Business Research (CEBR) on behalf of the UK Vaping Industry Association (UKVIA).
Valued at £2.8 billion ($3.36 billion) in 2021, the UK vape sectors supports almost 18,000 full time-equivalent jobs in retail, manufacturing and supply chain. What’s more, smokers abandoning cigarettes in favor of less-harmful e-cigarettes has saved the National Health Service (NHS) more than £300 million in 2019 alone, according to the report.
Even as many businesses suffered in recent years, vape retail stores have bucked the trend and represent one of the biggest growing sectors since the first decade of the 21st century when they started to appear for the first time.
From 2017 to 2021, the UK vape sector’s turnover grew by 23.4 percent to £1.33 billion last year alone. When indirect economic benefits such as supply chain support and the spending power of vape sector workers is factored in the economic impact more than doubles.
In 2021, the vaping industry paid £310 million in taxes to the British exchequer.
CEBR estimates that the vaping sector saved the UK £322 million in smoking-related healthcare costs in 2019. The research organization reckons that if 50 percent of smokers switched to vaping, the potential healthcare savings would have been £698 million in 2020.
Meanwhile, the gain in economic productivity associated with smokers switching to using vaping products was estimated to be £1.3 billion in 2019. If 50 percent of remaining UK smokers switched to vaping, this would increase to £3.33 billion, according to the study,
In little over a decade vaping in the U.K. has grown from very much a ‘cottage industry’ to one of the fastest growing sectors in not just retail, but the whole economy.
“The findings of the vaping industry’s first ever economic impact report demonstrates its significant success as a fast-growing disruptive sector,” says Owen Good, head of economic advisory at CEBR.
“Whilst many high street retailers have suffered in recent years, the vaping sector has bucked the trend, with significant growth both in-store and online. Even the effects of the pandemic have not significantly hampered the sector’s growth.
“The sector’s growth has been hugely beneficial to the U.K. economy; businesses and their employees directly involved in the industry and those running operations across the wider supply chain; and the NHS which has seen a massive cost saving with increasing numbers of smokers switching to vaping in order to quit their habits.”
“In little over a decade vaping in the U.K. has grown from very much a ‘cottage industry’ to one of the fastest growing sectors in not just retail, but the whole economy,” said UKVIA Director General John Dunne in a statement.
“More people than ever are vaping and by all measures this is a true British success story, creating employment and wealth, generating precious revenue for the government through taxation while at the same time saving the NHS more than £300 million a year through people switching from smoking to vaping.
Juul Labs Inc. said on Thursday that the company had secured an investment from some of its early investors that will keep the e-cigarette maker from filing bankruptcy.
The company will also undertake job cuts as part of a reorganization, according to Reuters.
Juul Labs also announced that it will lay off about 400 people and reduce its operating budget by 30 percent to 40 percent.
The company said the investment would help Juul run its business operations, while it goes ahead with its administrative appeal of the U.S. Food and Drug Administration’s marketing denial order related to Juul its e-cigarettes.
Juul Labs did not disclose the size of the investments.
The first company to score a CBD sponsorship with Major League Baseball is Charlotte’s Web Holdings Inc. as distribution deals with Gopuff and Southern Glazers widen its playing field.
Charlotte’s Web becomes the first CBD company that will be allowed to use the moniker “Official CBD of MLB.” The sports organization said in June said it would allow teams to enter sponsorships with CBD marketers.
Describing its relationship with MLB as a “multiyear, strategic partnership,” Charlotte’s Web will issue 6,119,121 shares of its common stock to the sports organization—worth an estimated $4.4 million, according to media reports.
In addition, the deal requires the company to make payments to MLB through Dec. 31, 2025.
According to a Securities and Exchange Commission filing, Charlotte’s Web will pay an “aggregate rights fee of $30.5 million and a 10 percent royalty on the company’s gross revenue from MLB-branded products of the company sold after prior sales of all such branded products exceed $18.0 million.”
Bottles of Charlotte’s Web’s new Sport Daily Edge line of CBD-infused gummies, oral sprays and topicals will carry MLB’s silhouetted batter logo.
“Charlotte’s Web will have a premiere brand presence at MLB’s Jewel Events, including All-Star Week, Postseason and the World Series” through marketing, media and ballpark activations that connect to the league’s fan base of over 180 million Americans,” the company said in a news release.
Also this month, Charlotte’s Web signed a distribution deal with liquor distributor Southern Glazer’s Wine & Spirits, which operates in 44 U.S. states, Washington D.C. and Canada.
That followed a national partnership with food and beverage delivery platform Gopuff, which also carries CBD-infused products from Medterra, Mad Tasty, Daytrip and Recess.
According to research from Brightfield Group, Charlotte’s Web was the leading U.S. CBD company in the second quarter in terms of dollar share, followed by Your CBD Store, Medterra, CBD American Shaman and cbdMD.
Altria Group on Friday said it had exercised the option to be released from its non-compete deal with Juul Labs. The move comes nearly four years after the tobacco giant purchased a 35 percent stake in the e-cigarette manufacturer that at the time was dominating the market.
Altria is looking to permanently terminate its non-competition obligations to Juul Labs, give up certain rights including its board designation rights and reduce its voting power, according to a 8-K filing to the Securities and Exchange Commission.
The filing states Altria has exercised its option to permanently terminate its non-competition obligations to Juul Labs, losing the right to the board designation and significantly reducing its voting power, according to Barron’s.
“This decision … increases the financial and strategic options we can pursue to secure our business and address the impact of the (U.S. Food and Drug Administration’s) now stayed [marketing denial] order,” a Juul spokesperson said.
However, it did not seek to be released from the obligations at the time, and said it saw value in its investment rights in Juul. “The decision to terminate our non-compete maximizes our flexibility to compete in the e-vapor space while maintaining our economic interest in Juul,” Altria said on Friday.
A change in its stance means Altria could go it alone or pursue other vaping products. Privately owned Njoy, which has already survived the FDA’s controversial premarket tobacco product application (PMTA) process, could be a takeover target for Altria, according to some analysts.
“It’s more likely that Altria will seek to buy its way back into the e-cigarette category (which represents 7 percent of U.S. nicotine sales),” Cowen analyst Vivien Azer said.
Philip Morris International has paused a program that would have paid Australian pharmacists AUD275 ($190.24) when ordering Veev vapes, according toThe Guardian.
The scheme, first reported by News Corp, would have seen pharmacists receive AUD5 every time they dispense a new VEEV script, AUD10 for educating a new patient about the device, and AUD5 for referring patients to a doctor to obtain a prescription. Pharmacists would also receive a AUD275 payment for placing an initial stock order.
Nicotine-containing vapor products are available only with a doctor’s prescription in Australia.
The cash-for-vapes program caused an uproar among public health advocates.
Emily Banks, a professor at Australian National University National Centre for Epidemiology and Population Health, said the tobacco industry wanted to piggyback off the trust Australians place in the healthcare system.
“Big tobacco wants a piece of that—they want some of the trust to rub off. It’s beyond appalling.”
“Big tobacco’s attempt at financial kickbacks shows absolute contempt for pharmacists,” said a spokesman for the Pharmaceutical Society of Australia. “Multinational tobacco companies have no place in health care.”
In a statement, PMI defended the program, saying since 2021 nicotine vaping products had been available in Australian pharmacies as a prescription-only medicine for smoking cessation.
“Several manufacturers, including PMI, have been providing nicotine vaping products to Australian pharmacies via the stringent regulatory regime. Industry data indicates that across multiple manufacturers products are now available in over 2,000 pharmacies nationwide,” the statement said.
A relatively new market for legal vapor products, the Middle East is beginning to embrace tobacco harm reduction.
By Timothy S. Donahue
According to World Bank estimates, the Middle East and North Africa (MENA) market has seen a steady decline in tobacco consumption since 2000, with 23.3 percent of adults using the products in 2000, 20.8 percent in 2010, and 19.2 percent in 2020. Many industry experts attribute this decline to the region’s growing acceptance of vapor products.
E-cigarettes were banned in Qatar in 2012 and then three years later in Oman but legalized in Bahrain and Kuwait in 2016; however, neither country immediately adopted manufacturing standards or a taxation structure. Then, in April 2019, the United Arab Emirates (UAE) Authority for Standardization and Metrology (ESMA) approved standards for the nicotine-based e-cigarettes. It was the first country to develop standards for the products in the region.
Before 2019, e-cigarettes were illegal in the UAE, and use of the products was growing rapidly in an unregulated market. This worried UAE regulators who wanted to curb combustible tobacco use, limit youth initiation and check a thriving vapor market.
The goal of e-cigarette regulations in the UAE was to offer nicotine consumers less risky alternatives to combustible products. The standards set by ESMA were designed to regulate all nicotine components used in vaping products, including technical specifications, ingredients, imports, packaging and labeling requirements in the UAE as well as a corresponding fiscal and tax structure.
After the success of the World Vape Show (WVS) Dubai in 2021, the first e-cigarette trade show in the region, the number of companies legally producing vapor products in the UAE has grown tremendously. During their 2022 conference, held June 16–18, WVS representatives said that they welcomed 50 percent more visitors than in 2021.
During a seminar session that focused on the growth of the Middle East markets, several speakers said that the UAE and its regulatory outlook has become a blueprint for other Middle East markets such as Saudi Arabia, Kuwait, Jordan and Egypt. In 2021, Saudi Arabia announced new regulations for e-cigarettes similar to the UAE (which in turn are similar to Europe’s Tobacco Products Directive).
In April of this year, Relx International, a major China-based vaping manufacturer, commended Egyptian authorities for their decision to allow the legal import and commercialization of vaping products in the country. Like Saudi Arabia, Egypt’s proposed regulations for vaping products are nearly identical to the UAE’s.
Rebecca Haining, head of external affairs for BAT’s Middle East, South Asia and North Africa markets, said that the UAE should be applauded for being the first Middle Eastern country to enact regulations. She noted that in 2019, the UAE had approximately 15,000 vapers. In 2020, that number had grown to 60,000 vapers. Today, that number is an estimated 70,000.
“They paved the way for the regulations in Saudi Arabia … I think what [the UAE] has done in this area is very important … getting the industry together to talk about what are the possible solutions. The UAE moved very quickly to institute a range of regulations and standards that now give the manufacturers certainty and give consumers some certainty around the safety and the quality of the products,” said Haining. “That’s very important, and I think it’s a job very well done.”
By lifting the ban on e-cigarette products, UAE authorities have allowed for the growth of new businesses and investment opportunities in the region. Experts say the move will bolster existing businesses that sell such products and will attract entrepreneurs. According to Arabian Business, the vaping and e-cigarette market in the MENA region is expected to grow by 9.74 percent annually to reach $485 million by 2025, up from $267.9 million in 2018, the year before UAE regulations were enacted. By comparison, the U.S. vaping market is expected to grow to $40.25 billion by 2028.
Omar Abdellatif, general manager for Philip Morris Management Services Middle East Limited, told WVS attendees that the increase of exhibitors at this year’s show, compared to 2021, reflects how many new businesses are serving the UAE market. He said the show is also an example of how the market has changed as innovation has flourished since legalization.
“Look at the evolution that has happened here in the UAE in just over one year. I think the last time you were probably sitting here [at WVS 2021] … it was a lot more about the tanks and closed pod systems; a lot more about the traditional side of vaping,” he said. “But you’ve seen what’s come up very quickly. Disposables, once they became legalized, have taken the market by a storm. And I think this is what we continue to expect. We’ll start to see these innovations.”
Some studies suggest that e-cigarettes may be gradually replacing the use of shisha products. In a joint investigation with the American University of Beirut, the Tobacco Free Initiative found that an estimated 40 percent of young adults in Lebanon are now using vaping devices instead of hookah tobacco. One speaker during the WVS said that the opportunity for e-cigarettes to replace cigarette use, and to a lesser extent hookah, “represents a considerable shift in the culture of tobacco consumption in the Middle East.”
Fadi Maaytah, CEO of Alternative Nicotine Delivery Solutions, said during the WVS that to continue the trend of moving combustible tobacco users toward less risky alternatives in the MENA region will require innovation. He said that innovation, however, should not attract new consumers but instead protect consumers looking to stop traditional smoking by bringing high-quality products to market.
“It’s not for ex-smokers. It’s not for nonsmokers. It is for smokers trying to quit. Today, the development and the flow of product that’s coming to the market, it’s coming with a lot of innovation, but the risk point here is that it might attract the wrong audiences, and this is what we see more often happening,” said Maaytah. “This is why [the industry] needs more of a collaboration between the industry and the regulators to work together and push the industry in the right direction.”
From a manufacturing perspective, positive industry innovation can only be achieved through product standards that are abided by all participants in the market, according to Haining. She said that standards are not only important for the safety and quality of products for consumers but also—if products comply with the standards—they’re less likely to have youth appeal.
“That’s part of the reason we have the standards. Secondly, from a manufacturer perspective, it’s around marketing freedoms and marketing regulations … making sure that all players in the market are marketing responsibly and not targeting youth and [are] discouraging youth uptake of these products,” she said. “If I look at an ideal situation, from a regulatory perspective, it would be regulation and excise frameworks, in general, that are proportionate to the risk [of e-cigarettes compared to combustible] cigarettes. There needs to be a wider berth between cigarettes and potentially reduced-risk products when it comes to regulations, standards, marketing freedoms and excise frameworks.”
Update: The Lincoln Police Department is investigating a break-in at another vape shop on Tuesday. LPD said officers were dispatched to an alarm and responding officers found a glass door was shattered and the suspects got inside the business, according to news reports.
Lincoln, Nebraska has a problem with burglaries at vape shops. This weekend, employees at another Lincoln smoke shop arrived to work to find the front door shattered and thousands of dollars in vape products stolen.
On Saturday at 10:30 a.m., Lincoln police were called to SJ’s Smoke Shop near 31st and O Streets after employees reported the front glass door shattered, according to news reports.
Surveillance video shows two people using a rock to break the front door. LPD says they took multiple pipes and vape products worth roughly $5,000. The damage to the building is also estimated at $5,000.
During an editorial on the rise in vape shop crime by Vapor Voice, Lincoln, Nebraska stood out as having a high number of vape shop crimes. Research suggests that in 2021 more than 40 vape shops burglaries occurred in Lincoln.
A spokesperson for LPD said that vape shops often carry expensive products that are small and hard to trace. This makes vape shops, especially those carrying delta-8, CBD and other cannabis products, high value targets for criminals. The products are in high demand on the black market, LPD said.
Richard Marianos, a senior law enforcement consultant and adjunct lecturer at Georgetown University, says regulatory constraints often have the unintended consequence of boosting crime rates, adding that taxes and flavor bans bring prohibition, and prohibition brings crime.
“These regulatory actions mean a dramatic increase in street sales to kids, and that is what we have seen all over the United States,” said Marianos. “In terms of law enforcement, the issue is that there has been 150 percent increase in smash-and-grabs because of the difficulty of purchasing these products.”
