Category: This Issue

  • Counting Our Losses

    Counting Our Losses

    Matt Holman, Clive Bates and Marc Sils

    The E-Cig Summit 2022 in Washington, D.C., confirms that vaping has lost in the court of mass media.

    By Monica Schick

    The E-Cig Summit operates under the premise of bringing stakeholders and public health science together with regulators to discuss strategies, as demonstrated by its mission statement: “The E-Cigarette Summit has a single aim of facilitating respectful dialogue and thoughtful analysis of the latest evidence and an opportunity to explore how this should be interpreted to deliver the most effective public health and regulatory strategies.”

    The E-Cig Summit 2022 was focused on current use patterns, youth usage, regulatory control and the available science. Public health representatives and stakeholders had an opportunity to air grievances and discuss solutions in panel discussions. Two major themes that emerged during the summit from both stakeholders and public health representatives alike were the deafening silence of the regulators and the miscommunication being presented to the public.

    Monica Schick

    In the past two years, we have seen the window closing for flavored vapor products in the U.S., with an even larger global concern voiced by the World Health Organization. With marketing denial orders issued by the U.S. Food and Drug Administration shutting down over 75 percent of the industry, the burden of the Prevent All Cigarette Trafficking (PACT) Act and now the Omnibus Bill placing regulatory control over synthetic nicotine under the FDA, there is little to no legal market left for flavored vapor products.

    Marc Sils, owner of 906 Vapor in Michigan, shared his perspective from the view of the vapor shop owner. He reiterated that vaping products were designed to help the current adult smoker quit combustibles. He expressed his frustration with the overreach of FDA regulators and the millions of smokers that will be left behind if the FDA continues its warpath of overregulation.

    Jeff Lynch, facilitator of prevention and intervention education at CHOICES Prevention programs, which aim to keep kids from vaping, posed a scenario of explaining harm reduction to adolescents: “What do you do if [your] parent is a smoker; is it better for them to vape or [to] smoke combustible cigarettes?” The answer to his question was to just reiterate the message that “for the parent, I would probably recommend they go look at data.”

    The problem with his response is that it only leads to the slew of misinformation available online. “What data is out there?” a parent may ask. “The only data I see is vaping is harmful.” If you Google “adult vaping,” you get a plenty of campaigns stating the harm of vaping and only a few statements on the “potential benefits” from regulators.

    This bates the question, what data is being presented to the public that the public can review and trust? Lynch also speaks on his funding and how the money provided to him through a grant qualifies him to speak only about youth usage. It is not surprising to hear these types of responses coming from public health officials. He is essentially bound by his funding to comment only on one side of the narrative—the prevention of youth usage and not the benefits to current adult smokers.

    Nancy Rigotti, director of the Tobacco Research and Treatment Center at Harvard Medical School, brought a clinician’s perspective on harm reduction, stating her disclosures not from the tobacco or vapor industries but from a pharmaceutical company to investigate a smoking cessation medication. In her speech, she discusses a study, “Communication Between U.S. Physicians and Patients,” regarding e-cigarettes and that only 22 percent of physicians had ever recommended an e-cigarette and most likely only to older, heavier smokers.

    In that study, the data also showed that “approximately one in four physicians communicated that e-cigarettes were harmful and [the physicians] discouraged use; this communication was significantly more likely with the younger, light[er] smoker than the older, heavier smoker.” Rigotti’s commentary further demonstrated how even the medical community is falling victim to the prolific amount of misinformed media messaging regarding vaping.

    With the current messaging that nicotine is detrimental to growing brains, as brought up by opponents of vapor products, it was interesting to hear Peter Hajek, professor of clinical psychology at the Wolfson Institute of Population Health at Queen Mary University, speak on the effects of nicotine usage on the brain. In his presentation, he detailed current studies that showed that the age of initial consumption of nicotine does not make much of a difference in dependency and seems to show no effect on IQ.

    If this is the case, why is the public being shown worms buried under the skin and numerous other images that are grotesque and are a completely inappropriate representation of the risks of vaping? Clive Bates from The Counterfactual did not hold back when confonting this type of messaging in his presentation during the E-Cig Summit 2022.

    Matthew Holman, director of the FDA’s Center for Tobacco Products’ Office of Science, discussed the premarket tobacco product application (PMTA) process and explained that out of the 8,094,108 PMTAs received, 21 have been granted a marketing order. All those products contain only tobacco flavors and are manufactured by larger tobacco companies.

    During the Q&A session, Holman was asked about the miscommunication by the FDA. Holman held his ground, saying that the FDA is doing its best to communicate the message but that it is very nuanced. He responded that with more engagement with stakeholders, hopefully both parties can agree on messaging because the public is confused.

    The most jarring session was one where Bates, Holman and Sils were brought together for an open conversation. During this session, Holman noted that people would not believe him if he told them that vaping is less harmful than smoking. Given Holman’s professional position, this is a shocking and foreboding statement that shows just how far the negative narrative has gone and the extent of the struggle it would take to change the public’s perception of vaping.

    Sils commented that the regulatory overreach was killing the vapor space, to which Holman replied that he was not responsible for the government decision to regulate vaping. “Go down the hill here to the Capitol because they wrote the law,” Holman said. “We have jurisdiction over the product[s] that Congress gave us jurisdiction over, [and] we just got jurisdiction over synthetic nicotine. We didn’t choose that. Congress wrote a law, and now we’re responsible for implementing it.”

    In response to Holman’s comment, Bates said the FDA did have choices on how to regulate and therefore was still responsible for the overreach. Obviously, this is not an issue that can be solved at the E-Cig Summit; it has been unsolvable for the better part of a decade.

    The current reality is that vaping has lost in the court of mass media. The public health advocates that showed up to the E-Cig Summit and joined the conversation seemed optimistic about the possibility that vaping can be a less harmful alternative to smoking, but it is also painfully clear that, for many in the public health community, the risk that a child might at some point start vaping—even if that vaping would be in place of smoking—will continue to weigh more heavily than the chance that an adult smoker will give up his deadly addiction to traditional cigarettes through vaping.

    “Is it ever right to exaggerate risks to get the behavior change you want?” Bates asked. “Is it OK to imply, by omission or commission, that vaping is as harmful as smoking just because you want to deter young people from using these products? [What are] the ethics of doing that—misleading people to get behavior change?”

    Until public health can put the needs of current smokers and the importance of options for adults at the forefront of the conversation, we will continue to see a war on vaping with a bleak outlook for the current smokers who desperately want to quit and would benefit the most from these products being available on the market.

    Monica Schick is secretary of the board at the Smoke-Free Alternatives Trade Association.

  • Unnatural Response

    Unnatural Response

    Credit: Alexl MX

    All nontobacco nicotine is now subject to the same regulations as tobacco-sourced nicotine in the U.S.

    By Timothy S. Donahue

    It was both expected and unexpected. Everyone in the vaping industry knew that at some point the U.S. Congress and the Food and Drug Administration were going to decide on how to handle synthetic and nontobacco nicotine. It was generally believed that regulation would appear in an appropriations bill in September, meaning vaping advocates thought they had time to fundraise and prepare for a battle.

    They did not. Instead, the language for changing the definition of the Tobacco Control Act (TCA) to include all nicotine products was buried on page 1,861 of the 2,741-page omnibus spending bill that was signed by President Joe Biden in March. How the rider found its way into the omnibus has caught the ire of many in the industry who say major tobacco companies are seizing the vaping industry away from the small business owners who got it started.

    Senator Richard Burr was allegedly approached by R.J. Reynolds and Juul Labs representatives about getting the synthetic nicotine rider in the omnibus that at the time was winding its way through Congress. Burr joined forces with fellow senators Dick Durbin and Patty Murray and Representative Frank Pallone to get the nontobacco nicotine language into the omnibus, according to two Senate sources familiar with the discussions, as reported by Bloomberg Law.

    azim-chowdhury
    Azim Chowdhury

    Azim Chowdhury, a partner with the law firm Keller and Heckman, said he interprets the rule to mean that all synthetic products already on the market or newly marketed within 30 days after the enactment date can continue to be marketed during the 60-day period following the enactment date. The law became effective on April 14, and manufacturers will have until May 14, 2022, to either submit a premarket tobacco product application (PMTA) to the FDA for each vaping product that contains synthetic nicotine or pull their products from the market.

    Manufacturers that submit PMTAs to the agency by the May 14 deadline can continue marketing their products until July 13, 2022. Beyond that date, all products must be removed from retail stores unless the FDA has issued a marketing authorization, according to Chowdhury.

    “We do not anticipate FDA authorizing any synthetic nicotine products by the end of the 90-day period, though they may take another Fatal Flaw (the term Fatal Flaw was used by the FDA for PMTA submissions that didn’t have specific studies and were subsequently denied) approach to quickly deny applications,” said Chowdhury. “Significantly, the rider in its current form indicates that a synthetic nicotine version of a product that already went through the PMTA process and is subject to a refuse-to-accept, refuse-to-file, marketing denial order (MDO) or withdrawal of a marketing order would have to come off the market as of the effective date—i.e., after 30 days of the law’s enactment.

    “In simpler terms, for products that were previously formulated with tobacco-derived nicotine—and the only change was a switch to synthetic nicotine—and whose PMTAs have already been refused or denied, those products will effectively be banned on the effective date—30 days after enactment—with no opportunity to submit a new PMTA. This is Congress’ way of punishing companies whose PMTAs were denied and then, in their view, sought to circumvent the law by switching to synthetic nicotine.”

    MIchelle Minton / Credit: Competitive Enterprise Institute

    Michelle Minton, writing for the Competitive Enterprise Institute, states that given the FDA’s sluggish track record, many of the applications may not even be reviewed, let alone approved, in that time, which would make the bill a de facto prohibition on those products. “FDA has made it painfully clear that there is no way for those companies to earn its approval,” Minton said. “All it will do is guarantee that companies and consumers are pushed in ever-greater numbers toward a growing illicit market where there are no consumer protections and no age restrictions—or back to smoking.”

    Stately response

    Beyond the PMTA conditions, if a marketing order is granted, manufacturers of synthetic nicotine products are also subject to all the regulations for tobacco products. Keller and Heckman interpret this to include all additional TCA requirements, including tobacco product establishment registration and product listing; ingredient listing; ensuring that labeling is compliant, including required warning statements; and health document submissions, among others.

    Many states had already started to ban synthetic nicotine unless a product gets marketing approval from the FDA. Legislation has been introduced in four state capitals and enacted in one state, Alabama, that effectively bans all products containing synthetic nicotine. Patrick Gleason, vice president of state affairs at Americans for Tax Reform, said Alabama, then Mississippi, Maryland and Georgia, were the first states to introduce legislation effectively banning synthetic nicotine products. However, he says there will be no need for more state legislation to ban synthetic nicotine now that the federal government has added it to the TCA.

    Yaël Ossowski

    Yael Ossowski, deputy director of the Consumer Choice Center, said that making companies ask permission to sell harm reduction products in the 21st century is “asinine.” Using “sleight of hand” during an emergency government funding bill to “castigate millions of vapers and the entrepreneurs who make and sell the products they rely on,” he noted, is the definition of active harm.

    “Only the largest and most powerful vaping and tobacco companies can afford the lawyers and the time necessary to complete the paperwork necessary to pass the FDA’s process, meaning thousands of hardworking American business owners will now be forced to close, depriving millions of adult consumers of harm-reducing options. Many will be forced back to cigarettes,” said Ossowski. “Synthetic nicotine is an innovative method of providing nicotine independent of tobacco, and millions of American adults now use these products as a less harmful method of consuming nicotine. A backdoor bureaucratic power move like this represents a sledgehammer to the men and women of our country who have sought out vaping devices to kick their cigarette habit.”

    There is no sell-through period for retailers of synthetic nicotine products if the manufacturer does not file a PMTA with the FDA by May 14. While some manufacturers plan to end sales of their synthetic products by the deadline, as Ossowski suggests, others plan on submitting robust and timely applications. Patrick Mulcahy, CEO and co-founder of Streamline Group, parent to the Streamline Vape Co., wrote in an email that his company has been working toward a solution to navigate the regulatory landscape for newly deemed synthetic nicotine products.

    “We have recently contracted with Accorto Regulatory Solutions to manage, submit and deliver a complete set of premarket tobacco [product] applications. To date, their track record of applications submitted have received zero MDOs. Their commitment to submitting a complete and robust PMTA is the level of service Streamline aims to provide the market with our current and future line of products,” he said.

    “Streamline’s goal during this process is a commitment to provide full transparency, informational updates and other news related to these regulatory requirements as we progress through the various phases of the PMTA,” Mulcahy stated, adding that market confidence is a top priority for Streamline Group, which was submitting PMTAs for its Juice Head brand e-liquids, disposables and nicotine pouches along with its NIIN brand e-liquid and pouches.

    Organized approach

    April Meyers, SFATA

    April Meyers, owner of Connecticut-based Northeast Vapor Supplies and CEO of the Smoke-Free Alternatives Trade Association (SFATA), told Vapor Voice that her organization believed the industry would have more time to hold discussions with legislators on the Clarifying Authority Over Nicotine Act of 2021 (HR 6286) introduced by Representative Mikie Sherrill in December of last year. SFATA members were aware of the mounting pressure on the subject of synthetic nicotine and had been developing strategies to counter the pressure. 

    Given the inclusion of vapor in the Prevent All Cigarette Trafficking (PACT) Act in the 2021 omnibus, the nonprofit vapor industry advocacy group was not completely surprised to learn that HR 6286’s language had been included in the 2022 omnibus bill, according to Meyers.

    “We went immediately to work educating our members on the issue, executing a call to action and making a volley of calls to sources at the Capitol, including our contacts at the freedom caucus,” said Meyers. “Those sources confirmed that a handful of large vapor companies and several Big Tobacco companies were in support of the measure. We were also informed that the House and Senate votes would move quickly and that there was little opportunity to get the provision removed. This was discouraging, to say the least, but did not dissuade us from acting. This industry has learned to mobilize quickly and has achieved several victories under similar circumstances.”

    Meyers said that while the sponsors of the synthetic nicotine rider claimed the intent was to close a loophole on synthetic nicotine-derived products from large companies now popular among youth, the rule, and others like it, are very unlikely to have that intended effect. Instead, she said, consumers using these products as a harm reduction option will suffer alongside all the small businesses that have always operated in full compliance with federal, state and local laws.

    “The FDA created a problem by overregulating a product used by millions of adults who find vaping a safer alternative to smoking. When a market in high demand is overregulated, gray and black markets emerge where there are no regulations requiring safe products or ID checks. The vapor industry is incredibly resourceful,” Meyers said. “SFATA believes our government should have learned its lesson from the 1920s that prohibitionist policies never work. In this country, and particularly, this industry, where there is a will, there is a way. Despite the attempt to bring the vapor industry to heel, adults have been vaping flavored products in the U.S. for [nearly 15 years]. It is delusional to think that will be snuffed out with the signing of a law. Our fear is that this will pave the way to a growing illicit trade market while simultaneously increasing smoking rates across the country as studies have already demonstrated in localities with flavor bans.”

    Tony Abboud
    Tony Abboud, VTA

    Tony Abboud, president of the Vapor Technology Association (VTA), said that everyone who understands anything about PMTAs knows that an application cannot be filed within the 90-day time frame, particularly because the FDA requires at least six months of scientific data for such an application. He said the new rule could become a de facto ban on synthetic nicotine that would have some unintended consequences.

    The VTA hired economic research firm John Dunham & Associates to evaluate the negative economic impacts that a synthetic nicotine ban would have in the U.S., according to Abboud. The results included 16,100 lost jobs, over $800 million in lost wages and $2.5 billion in lost economic output. It would also cost the U.S. more than $500 million in yearly taxes.

    Amanda Wheeler

    Amanda Wheeler, owner of Jvapes and president of American Vapor Manufacturers, said during the 103rd annual meeting of Vapor Voice’s parent company, TMA, that she hopes the FDA offers “some kind of enforcement discretion” to small businesses, especially those manufacturers that are trying to follow the rules.

    “I can only plead with the FDA at this point not to repeat the mistakes of 2020 and 2021, finding an arbitrary reason to toss all of those applications out on their ear. The consequences this time are even more dire,” said Wheeler. “We have this serious handicap on our hands as far as the time frame … I think we need to treat businesses equitably and recognize that there is only so much that people can do in 60 days. And enforcement discretion would be the thing that’s most helpful to prevent companies from having to look for an alternative solution.”

  • Growing Competition

    Growing Competition

    Credit: Parilov

    While there are three bills in Congress competing to legalize marijuana, there are also many obstacles.

    By Timothy S. Donahue

    For the second time, the U.S. House of Representatives passed the Marijuana Opportunity Reinvestment and Expungement (MORE) Act (HR 3617), a bill that would end the federal prohibition on cannabis by removing it from the list of banned controlled substances. The MORE bill that passed the House with 220 “yea” votes to 204 “nay” votes would end the federal ban but leave legalization up to the states. The last time the House passed the MORE Act, the Senate did not take it up for a vote.

    The current MORE bill is also expected to face strong headwinds in the Senate. This is partly because there are currently three bills floating through Congress competing to legalize marijuana on the federal level. The second bill, the States Reform Act (SRA), was introduced last year by Representative Nancy Mace. The SRA is the first comprehensive Republican version of legislation to end cannabis prohibition. It’s expected to have its own hearing in April (but had not at press time). Mace voted no on the MORE Act.

    Mace’s legalization bill is primarily aimed at having the federal government treat marijuana in a similar manner to alcohol, and cannabis would be removed from the Controlled Substances Act, with retroactive effects for people previously punished. Prior federal cannabis convictions would need to be expunged within one year.

    The third marijuana legalization bill is out of the Senate. Senate Majority Leader Chuck Schumer, Senate Finance Committee Chairman Ron Wyden and Senator Cory Booker introduced the Cannabis Administration and Opportunity Act in 2019. It was read twice and has been in committee ever since. The main features of the legislation largely align with what advocates and stakeholders expected. The bill (S. 1552) would federally deschedule cannabis, expunge prior convictions, allow people to petition for resentencing and maintain the authority of states to set their own marijuana policies.

    While all the action marijuana legalization bills are receiving lately is exciting, it doesn’t mean that the U.S. is close to decriminalizing delta-9 THC. Rod Kight, founder and principal of Kight Law Office and a prominent global expert in marijuana law and legislation, said that he doesn’t expect any of the legalization bills to pass this year. Currently, cannabis is legal for adult use in 19 states and for medical use in 36 states. The legal marijuana industry generated $25 billion in sales last year, a 43 percent increase over 2020, and is expected to hit $65 billion in 2030, according to Forbes.

    In an interview with Vapor Voice, Kight shared his insights into the various bills.

    Vapor Voice: Do you think the MORE Act has a chance to get passed in the Senate?

    Rod Kight

    Kight: I think it has almost no chance whatsoever in the Senate for a couple of reasons. One is that there are competing bills. I think we may have some political showmanship as to which bill can get passed. Additionally, the Senate doesn’t get a whole lot done to begin with. It’s become an “obstructionist” legislative body, but that’s a topic for another day. So, with respect to the MORE Act, I would call this a symbolic vote by the House that, disappointingly, is almost certainly not going to pass in the Senate or even come close.

     

    If you thought one bill had a best chance to pass, which one would you choose?

    If a decent bill came from the Senate to the House, then it may have a good chance. In that scenario there, a bill is much more likely to pass than one coming from the House to the Senate. I think the hurdles the Schumer/Booker bill are going to face are that it’s competing with a Republican bill in [the] House. Additionally, it’s also just still competing with old-school prohibitionists. This is important since it will need 60 votes. I’m not sure that Schumer even has the full Democratic caucus, much less Republicans, who would either presumably say no and vote against it to continue prohibitionist policies or to vote for the Republican bill sponsored by Mace.

    We talked about two of the bills; what is your opinion of Mace’s legislation?

    She says she has bipartisan support. This would again have to come out of the House, though, and go into the Senate. As I said earlier, that’s a more difficult route given the way our legislative system works. That being said, it’s really hard to predict how the Mace bill will do because on the one hand, a lot of Democrats want to pass cannabis reform at almost any cost, including by voting for a Republican-sponsored bill. And so, here’s a bill sponsored by Republicans that may actually be able to get through because of presumptive Republican support and some Democratic members of Congress who will vote for it in order to legalize marijuana. All of this is to say that the Mace bill could have some traction simply because it’s sponsored by a Republican.

    On the other hand, it’s not as comprehensive or thorough of a bill and doesn’t address a lot of issues that Democrats want. And then also, it’s sort of … a pride issue … for the Republicans to sponsor and pass a cannabis bill, which forever has always been a Democratic issue. I think that would be a pretty hard pill for the Democrats to swallow.

    If we really look at the Mace and the Schumer/Booker Senate bills, the more that the MORE Act seems DOA [dead on arrival]. The Schumer/Booker bill is probably unlikely to pass as it stands as well. It will probably get blocked by Senate Republicans.

    If you were writing the legislation, what would Rod Kight’s bill look like?

    Credit: Poylock19

    The most straightforward thing to do would be to just, literally, have a very, very short bill that simply removed all forms of cannabis from the Controlled Substances Act altogether. Done deal, and then it’s up to the states to regulate it, which is de facto happening now anyway. Under that scenario, it would be regulated in a similar manner to other products, such as alcohol, tobacco, kratom, etc., that are typically regulated by the states. And then the FDA [U.S. Food and Drug Administration] and other federal agencies would regulate to the extent that the various products that flow from cannabis fall within their respective jurisdictions.

    That being said, and as simple as that may sound, it’s unlikely to happen. “Cannabis” comes loaded with meaning these days, from financial gain to personal liberty to health to tax benefits to social and racial equity, etc. So any cannabis law will ultimately incorporate some, and perhaps all, of these cannabis-related issues and more. So there is ultimately an opportunity for each of the different parties and many interest groups to get something that they want. Democrats want social equity, they want racial equity, they want expungement, all of which are really important and speak to a bigger set of values related to cannabis so that when it is finally legalized, we’re not just allowing big corporate interest to come in and scoop this whole thing up after prosecuting people for almost 100 years, primarily people of color. This is a major concern in a controversial medical marijuana bill in my home state of North Carolina.

    On the other hand, the Republicans tend to focus more on making this thing really work for business.

    For my part, and given both the history and the current state of affairs with cannabis, I favor a bill that fully removes it from the Controlled Substances Act and also addresses social and racial equity while creating a place for small businesses to thrive.

    If you had a crystal ball, will a federal legalization bill pass this year? Next year?

    I don’t see any advancement this year. I think the best we can hope for is some banking and potentially some tax reform as those things relate to marijuana. I don’t see any kind of legalization at the federal level. As far as when we can expect to see it, I think, at the very best, it would be next year. However, I’m starting to kind of get my head around the fact that the best opportunity is probably in a post-Biden administration setting. Biden is simply not a supporter. I think without strong support and even leadership from the executive side, [it’s] ultimately difficult to get anything through of this magnitude.

    What kind of social and economic benefits would legalization bring, such as taxes, fewer people in prison, etc.? Could more money go to treating the addiction of harder drugs?

    I don’t have any specific numbers, but I will say that this reform is not only good for the physical and mental health of American citizens but also for the fiscal health of the country. Taxing the products and using those taxes to fund socially beneficial programs, including expungement of marijuana convictions, while also lowering the prison population will be huge. Of course, adding an entire new industry to the market will have a huge financial impact. Finally, liberating cannabis for use by people instead of medicating with pharmaceuticals will also help. With respect to addiction and mental health opportunities, I think cannabis can play an enormous role. I think that it could help reestablish the U.S. as a leader in the world economy as well. We’re seeing Latin America beginning to legalize; we’re seeing Germany and Spain making moves to legalize. And so, if the United States gets out ahead of that slightly, then I think the U.S. retains control of what promises to be a huge sector of the economy, whereas if we allow Europe to take the lead on this, then it will be impossible for the U.S. to recover. I don’t think the U.S. could ever really gain it back.

    What about on a state level—is legalization becoming more active?

    Credit: Adobe

    As it stands, the states continue to be the place where all the action is happening. It’s really fundamentally important to pay attention to all the various bills regarding cannabis across the board. You know, recreational marijuana, medical marijuana, hemp, hemp derivatives, all those types of things. Watch what’s happening at the state level. I think that’s really where we’re seeing some essential changes.

    Will we eventually see all 50 states with legal marijuana?

    I think it is unlikely but possible that we could have some form of legal marijuana in all 50 states while it is still illegal at the federal level. This would be unprecedented. In fact, it’s probably unprecedented where we are at right now. What other issue in the history of the U.S. has been like this, where you have more than a majority, maybe even a supermajority of states that have legalized something that the feds deem to be illegal or vice versa?

    Just to take things to another perspective, consider that now with respect to hemp derivatives—you have THC that’s being lawfully marketed throughout the country, and in most states, it’s legal. At what point do we even really—from a policy level, not necessarily a statutory definitional level—just consider that cannabis is, in fact, lawful throughout most of the U.S. in the sense that there are all of the active compounds in marijuana, including THC, being marketed throughout the country legally through hemp. At what point do we just say cannabis is legal in this country, either de facto or otherwise?

    Times are changing. You had marijuana, which was considered the “THC world.” And then you had hemp, which was considered to be the “CBD world.” Those worlds have blended. You have interesting things that the states are doing. Ultimately, what’s happening is [that] the overall tide of cannabis legalization is continuing to move forward. We may see a situation where almost every state has legalization of marijuana. Yet, marijuana is still, quote, unquote, illegal at the federal level. That’ll be a very strange state of events, but that’s how it could play out.

    Last question: Is there unity between the hemp and marijuana producers? Unlike other industries, are the segments banding together to fight potential regulations?

    No, I think there’s unfortunately a lot of dissension. I think there’s dissension between the marijuana industry and the hemp industry and within each of those sectors of the industry. Then I think at the level of the farmers, the farmers are the front lines, and they’re the ones that really are often not heard. They’re the ones that struggle with massive price fluctuations and the bottom dropping out and then the mass demands. Then they ramp up for demand, and then it goes away. The farmers may be the most important factor in this equation.

  • Logistical Nightmare

    Logistical Nightmare

    Credit: Markus Spiske

    Postal regulations and shipping bans create major roadblocks for smokers trying to quit combustibles.

    By Maria Verven

    As the saying goes: When the going gets tough, the tough get going.

    Thanks to the Preventing Online Sales of E-Cigarettes to Children Act that passed last year, retailers have had to hustle to deliver vapor products to their customers.

    All the major shipping vendors, from the U.S. Postal Service (USPS) to the leading nongovernmental carriers—UPS, FedEx, DHL—have stopped shipping vaping products containing nicotine or cannabis to avoid violating the 2007 Prevent All Cigarette Trafficking (PACT) Act.

    Although some alternative logistic solutions have emerged and the USPS has made some exceptions for business-to-business shipments, delivering vapor products to consumers remains a huge challenge—especially for customers who live outside of major metropolitan areas.

    Some smaller retailers simply called it quits.

    “We stopped shipping when the USPS ban went into effect,” said Char Owen, CEO of Cloud 9 Vapor Shop. Cloud 9’s two shops in Seguin, Texas, and Kenedy, Texas, are 40 miles and 60 miles, respectively, from San Antonio. She said the software to track shipments was too expensive, adding that some quotes were as high as $100,000. Even quotes that were closer to $20,000 put this option out of reach. 

    “And if we didn’t use software, we would have to hire a person to keep up with it, and that wasn’t within our reach either,” she said. “We are two small stores, and we’re not big shippers, but our stores are in areas where customers might have to travel over an hour to get to us. With current gas prices, it would absolutely be cheaper to ship; however, we can’t afford that option anymore.”

    While Owen said her stores haven’t taken a big hit, the PACT Act had a huge impact on the customers they used to send shipments to. “It’s the remote vaper that got hurt in this case,” she said.

    Exceptions to the rule

    Credit: Hakinmhan

    It’s rare, but business and regulatory exemptions to the PACT Act have been made.

    Pure Labs, parent company for Halo vaping products, sought and obtained approval by the USPS to ship e-liquid and other vaping products to other compliant businesses. The approval allows Syndicate Global Distribution and Halo Wholesale Direct to ship Halo electronic nicotine-delivery system (ENDS) products directly to their brick-and-mortar retail customers—a huge win for Halo.

    “Halo’s tobacco and menthol vape products are in demand by adult consumers throughout the country, and we are excited to have USPS solidify the supply chain,” said Kevin Dietz, director of Halo brand sales, adding that several of Halo’s ENDS products are in the final stages of the U.S. Food and Drug Administration’s premarket tobacco product authorization process.

    Unique challenges

    Filling the shipping void are companies such as X Delivery, which promises to satisfy all PACT Act requirements, including verifying the purchaser’s age and obtaining a signature from an adult aged 21-plus upon delivery. Other restrictions—such as the maximum weight requirement (no more than 10 pounds), requisite stickers indicating that the package contains a “tobacco” product and a notice that the recipient is required to pay taxes on the purchase—must be met.

    “All shipping has unique challenges. The fact that the national carriers opted out of shipping vape products shows us that they’re only interested in the drop-and-run delivery model,” said Paul Vinuelas, chief logistics officer for X Delivery. “We are dedicated to ensuring compliance and protecting youth from obtaining these products. While it may take a bit more effort to perform our deliveries and audit them for PACT Act compliance, we think it’s worth it.”

    While they only began shipping vapor products in late 2020, X Delivery worked closely with vape companies to build a fully compliant service. An application programming interface helps streamline the shipping process and sync data in real-time across various platforms. They’ve also connected empty warehouses, local delivery services and other supply chain assets to their sophisticated system in an effort to speed and simplify the flow of information.

    When Vinuelas spoke to Vapor Voice (“Stand and Deliver,” Issue 2, 2021) last May, he said X Delivery could ship products to consumers in about 90 percent of the U.S. He was cautiously optimistic that the company could eventually increase coverage to include the entire country.

    “Our long-term goal is to be the No. 1 shipping carrier for D2C e-commerce brands,” Vinuelas said. “We understand the relevant laws in detail and are determined to be a good partner to vape and e-cigarette merchants.”

    A misguided law

    Credit: blr60

    Shipping vapor products with X Delivery comes at a cost, which is why smaller retailers, such as Cloud 9, decided to restrict sales to its brick-and-mortar locations. Other retailers, including Five Pawns, had to reengineer the way they handle all shipping.

    “The problems started as soon as the PACT Act was enacted,” said Jay Oku, head of business development for Five Pawns. Oku said Five Pawns reengineered their shipping logistics to comply with the “misguided law introduced by our out-of-touch 88-year-old California career politician, Diane Feinstein.

    “When we were prohibited from shipping via USPS, UPS and FedEx, we were forced to use a third-party logistics service,” Oku said. But even with this service, he said that delivery to all areas—even areas in Five Pawns’ own California backyard—remain problematic. 

    “The fact that each shipment requires a signature from an adult on the premises has caused frustration with many customers. Our customers are forced to make arrangements to have someone of age at home midday for several days so [that] they don’t miss their shipments,” he said, adding that some shipments are taking 15 days or more. 

    “These companies don’t have effective tracking data, so customers have no idea when their order will arrive,” Oku explained. “Many [customers] reported shipments being delivered in an unmarked van as late as 9:30 p.m. We have elderly customers completely inconvenienced, frightened of strangers coming to their door at night and ultimately fearful they may no longer be able to get their e-liquid.”

    Regardless of the workaround shipping solutions devised by vape companies, challenges will continue to mount as anti-vaping legislation continues to be popular with misinformed politicians.

    “While we understand and agree with the need for reasonable and responsible regulation, our concern is that these overarching regulations and restrictions will push vapers back to deadly combustible tobacco products,” said Maggie Gowen,vice president of retail marketing and communications for AMV Holdings. AMV Holdings is the largest operator of specialty brick-and-mortar vape stores in the U.S., with over 120 retail locations, as well as the parent company for numerous major e-liquid brands, including Alohma, Kure, MadVapes and MAXX.

    “We have a lot of customers in rural areas and other areas with shipping restrictions who are very upset that they can’t purchase their vapor products like before,” Gowen said. “Excessive shipping costs due to the PACT Act requirements just added to their frustration. At what point will these vapers simply give up and revert back to combustible tobacco because they cannot access vapor products? That is our biggest fear.” 

    AMV Holdings conducted a large behavioral study and found that nearly 90 percent of its customers were former smokers with an average age of 37 years; roughly half had been smoking for 10 years or longer before they started vaping. A third of them had tried traditional nicotine-replacement therapies to quit, and over half had tried to quit cold turkey.

    “Our data tells the story of a group of adults—not minors—desperate to quit smoking, who ultimately found vaping and were able to successfully kick the cigarette habit using ENDS products,” Gowen said.

    Vapers are the victims

    Credit: Nasibli

    Public health and the smokers trying to quit ultimately carry the burden of limited shipping options and all-out bans for mailing vapor products. “What we’ve seen unfold over the last year cannot accurately be characterized as ‘unintended consequences,’” said Gregory Conley, president of the American Vaping Association, a nonprofit advocacy group.

    “No member of Congress who pushed for this law took the time to understand its implications for small businesses. From conversations on the Hill, it was painfully clear that the sponsors were ready and willing to see the industry and its adult consumers take some pain.

    “In the era of TikTok and Snapchat, and despite dealers who don’t hold business licenses or collect excise taxes, very few teenagers have been stopped from accessing vaping products by this law,” Conley said. “Like with most anti-vaping policies, the primary victims are adult smokers and ex-smokers just trying to live in peace.”

    The story isn’t over, however. Business owners are searching for solutions. “For years, we have had to fight tooth and nail for the rights of our consumers,” said Schell Hammel, president of The Vapor Bar, a Dallas area retail store chain, and director of Chapter Relations for the Smoke-Free Alternatives Trade Association. “This stand by the shipping companies is just one other way to make it harder to get these products to those who need them to stay successful.

    “We will always find a way,” Hammel continued. “We are a resourceful bunch, and no matter what, we will continue to fight for our consumers’ rights and those who are able to keep their doors open to serve them.”

    The original “Vaping Vamp,” Maria Verven owns Verve Communications, a PR and marketing firm specializing in the vapor industry.

  • Vaper’s Paradise: Romania

    Vaper’s Paradise: Romania

    Romania is more progressive when it comes to vaping than many of its neighbors.

    By Norm Bour

    Romania, a country of just under 20 million people, is considered progressive when it comes to vaping. As a member of the European Union, it follows the Tobacco Products Directive, which has been in force for almost a decade now.

    Romanian law prohibits the use of e-cigarettes on public transport and e-cigarette sponsorship and restricts much of the advertising of vaping products. A text-only health warning is required to cover 30 percent of the product package, according to tobaccocontrollaws.org.

    The country has a high percentage of smokers, estimated to be about one-quarter of the population, which is dropping. Whether those former smokers have quit nicotine entirely or moved to vaping is hard to determine. As in many places, vaping is embraced primarily by the mid-20s to mid-30s age groups, with about 3 percent of the population being vapers.

    Remarkably, at a time when the popularity of vaping is increasing throughout Europe, only 1.5 percent of Romanians under the age of 24 vape. Overall, it appears that about 2 percent of the Romanian population has taken up the habit. This creates many new opportunities for budding entrepreneurs.

    With a growing number of shops in the capital city of Bucharest, I visited two of them to get a better feel for their perspectives. I also wanted to know if the shops were getting business from Turkey, just a few hundred miles away, where vape shops are illegal.

    Florin Mincu is an early innovator in the vapor business. He opened Vaper’s Paradise in 2010.

    “My taxi driver from the airport was smoking, and I saw him put what I thought was a lit cigarette in his shirt pocket. “‘Whoa,’ I said, ‘what did you just do?’ He explained that it was an e-cigarette, and he bought it from a black market guy selling them out of his trunk,” said Mincu. “I knew this was important, so within two hours, I had the taxi driver take me to meet this person. Remember, these were the days before true vape shops. I used the products he was selling and quit smoking in two months, and that is when I opened my first shop.”

    When I hear stories like this, I wonder if I would have been so impulsive, but Mincu did not hesitate. Now, a dozen years later, he has two shops. In his main shop, with only 20 square meters (215 square feet) of space, he earns upward of $50,000 in revenue. In the Romanian context, this is a hugely successful shop.

    We spoke about the government’s attitude and support of vaping, and he said they are “about 50 percent in,” which means they don’t support it, but they don’t outlaw it either. Fortunately, the country is pro-tobacco, so when he opened his shop, authorities assumed it was just another tobacco business.

    After talking with Mincu, I spoke with another shop owner who requested anonymity, but both shops said the average age of their customers is about 30. As in many countries, no one under 18 is permitted inside the vape shop.

    Vaper’s Paradise carries single-use and disposable kits, but the store is still pretty “old school,” with big mods and the heavy vapor products featuring prominently in its collection. Because of that, Vaper’s Paradise carries an impressive assortment of liquids, including American-made Five Pawns and Got Vape. Mincu prefers the U.K. brands, especially Nasty Juice, since it offers better pricing, great flavors and enjoys great popularity among his customers.

    He also favors Nasty Juice because it burns cleanly and the cotton lasts much longer, and he’s a fan of U.K.-made Kilo but says this product is tougher to get now.

    “About half our customers are getting into the disposables, but I have a large YouTube following, and they know I have a sophisticated taste for liquids, so they follow my advice,” he claimed. “Quality and flavors are what keep our customers happy, but even more important, any RDA [rebuildable dripping atomizer] hardware must be easy to use.”

    Mincu does a lot of RDA builds and is always trying to improve the quality of the products. By trial and error, he developed his own technique, which he teaches to others. The coil has a very specific sound—and quality—when he gets it right.

    They call it “polita,” which may not be a real word, but the sound it makes is very real.

    He also said that many reviewers go into too much detail when evaluating hardware. “It’s not required to spend an hour on an atomizer,” he griped. “They are not that complicated! I try to keep my reviews short and tight and keep reader’s already short attention spans.”

    Both shop owners agree that the Romanian vapor market is driven by flavors—a universal reality that makes the Food and Drug Administration policy so restrictive for their colleagues in the United States. When asked about the future potential for vaping in Romania, both entrepreneurs I spoke with were bullish and said they planned to open new shops in 2023.

    Mincu has a big vision and is planning a shop about five times larger than his current outfit. He also has a robust online presence, and when asked about that bleed-over business from Turkey, where there are no legal shops, he said, “Absolutely. You cannot keep products out of people’s hands today. If someone wants something, they will find a way to get it, and we should know by now that telling someone that a product is illegal will only make them want it more.”

    Mincu gets a lot of airline employees and pilots from different countries that are more restrictive about vaping products. And although Romania has vaping industry trade groups, Mincu has not joined any of them because “they don’t want to change, and they avoid new technology”—a common complaint shared by vapor industry representatives in many countries.

    Mincu and I finished up our conversation by speaking about hemp, CBD and cannabis. Hemp and CBD still operate in a regulatory gray area in Romania, and even though Mincu has received offers to sell those products, he does not. It’s not worth the risk, he says, since CBD cannot contain THC, which remains illegal in Romania. However, Mincu expects this to change in the next few years.

    Norm Bour is the founder of VapeMentors and works with vape businesses worldwide. He can be reached at norm@VapeMentors.com.

  • Preventative Measures

    Preventative Measures

    Credit: New Africa

    Innovations in technology and regulation could help ease the concerns surrounding youth access to vaping products.

    By Timothy S. Donahue

    Most tobacco control experts agree that vaping is safer than smoking combustible cigarettes. The primary concern for anti-vaping groups, legislators and regulatory officials isn’t where e-cigarettes fall on the continuum of risk, it’s about preventing youth access to nicotine products. The best way to prevent youth access is through innovation, according to vapor industry experts. Technology and regulatory policies will both be required for the vaping industry to satisfy its skeptics.

    Technological innovations have been the vaping industry’s primary contribution to battling youth access. Several companies have developed devices that use biometrics, such as fingerprint and facial recognition. The OBS Cube FP Kit, for example, uses fingerprint recognition to prevent unauthorized use. However, a 2020 review by ecigclick.com found the fingerprinting function complicated to configure. “The instruction manual is total pants … it really is,” the reviewer wrote. “So far I haven’t worked out how to use the fingerprint stuff, there are diagrams in the book which relate to bugger all on the actual device.”

    Juul Labs launched its C1 in Canada in 2019. The device paired with an Android smartphone to limit who could use it and to provide monitoring of what and how often the user vaped. Juul says the C1 could only be used if people got through age-verification and facial-recognition checks. The C1 also had a system that could be set to automatically lock when it was not being used or away from the phone to which it was linked.

    Credit: Juul Labs

    Juul Labs then launched the JUUL2, which had many of the same child safety features as the now discontinued C1. The JUUL2 also can recognize and authenticate proprietary JUUL2 pods when they’re attached, limiting the ability to use counterfeit pods or refill pods with other substances, such as THC.

    Steven Yang, senior director of FEELM R&D, says that FEELM has incorporated designs into its products that prevent misuse by children, for example, by requiring the user to follow a specific sequence of procedures to activate the device. 

    “With a number of industry’s leading patents, FEELM is exploring ways to integrate Bluetooth, fingerprint, airflow switch, sensor and other electronic technologies to create a child lock on products,” he says, adding that many Chinese vaping industry leaders have already adopted ID verification and facial recognition technologies.

    “FEELM’s strategic partner and China’s leading vape brand, RELX, has initiated Sunflower Systemin 2019. Based on AI and big data, the Sunflower System is integrated into different scenarios, such as RELX chain stores and the RELX app to prevent minors from purchasing vaping products,” explains Yang. “The Sunflower System has been extended to all RELX chain stores in China, to ensure each purchase order is traceable. Moreover, through big data and GPS, the Sunflower Systemcan automatically filter the addresses that do not meet the legal requirements of opening a vape store—for example, near schools.”

    Project Sunflower consists of adopting ID and facial recognition technologies to ensure that only adults can purchase products in its China stores, according to RELX. Minors are not allowed to enter RELX stores, and in-store face-scanning cameras send alerts to RELX store staff if a suspected minor enters the store. Any suspected minor that is not able to present legal, valid ID proving his or her age is asked to leave the RELX store.

    Upon purchasing a product, RELX customers also need to verify their age through a facial recognition process that matches the customer’s face with the photo on the customer’s Resident Identity Card,” says a RELX representative. “This process is to ensure that the person in the store is using their own valid identification and not attempting to impersonate an adult.”

    While facial-recognition measures are widely used and accepted in China, they may encounter resistance elsewhere. Chris Howard, vice president, general counsel and chief compliance officer for E-Alternative Solutions, a U.S. based e-cigarette manufacturer, says that consumers have generally accepted biometric controls in phones, tablets and other devices that use fingerprints or faces to unlock the screens.

    Those who are tech savvy would likely welcome such an alternative in their vaping products, he says. However, traditional cigarettes don’t have any electronic controls to prevent unlawful use, so if vaping regulations follow tobacco rules that would limit these types of innovations. 

    “The idea that such a requirement would be necessary for vapor products to receive marketing orders seems unlikely. It is important to remember that adult smokers may be unwilling to deal with an electronically locked tobacco product,” says Howard. “While some may enjoy the novelty, many may just use a tobacco product—likely higher risk—that is easier to use. Many questions surround the use of biometrics in products. There are legal privacy issues which would increase the cost of such devices.”

    Manufacturers must also remain aware of regulatory restrictions in the markets they operate, according to Yang. FEELM has developed protocols to help retailers and distributors keep in compliance with local guidelines. Yang says the company attaches clear warning labels on its closed-system vaping devices and includes language in user manuals stating that the products are intended for use only by adults.

    “We also focus to ensure that the retail stores in which our products are sold have mechanisms in place to verify the age of the consumers purchasing products manufactured by us so as to comply with local laws and regulations in relation to age restriction,” Yang says. “Moreover, our website and our major customers’ web stores require visitors to enter their age before entering the websites.”

    Regulatory response

    Taxation has long been the preferred deterrent to youth access by regulators. Studies suggest, however, that increasing taxes don’t always have the desired impact. Instead, these measures discourage combustible smokers from switching to a safer alternative, according to a study by Steve Pociask and Liam Sigaud for the American Consumer Institute, Center for Citizen Research. The researchers state, “overzealous or poorly designed restrictions [like tax increases] on vaping, combined with misleading information about e-cigarettes’ actual health risks, are deterring smokers from pursuing a potentially life-saving alternative.”

    Tim Andrews, director of Consumer Issues for Americans for Tax Reform, says the evidence is clear that increasing taxes on reduced risk tobacco alternatives will do nothing to reduce youth access, but will punish adult vaping consumers, leading many back to deadly combustible cigarettes. He says one example is when the state of Minnesota imposed a tax on vaping products. It was determined that it prevented 32,400 additional adult smokers from quitting smoking, according to Andrews.

    “Paradoxically, by creating a booming black market, which, by definition, possesses none of the rigorous age verification processes required by legal retailers, vapor taxes may increase not decrease youth access. This is similar to how evidence shows in states where cannabis is illegal, it is easier for high school students to purchase cannabis than beer. Increasing taxes on vaping will create a boon for smugglers—and will hurt everyone else,” he says. “Youth vaping has plummeted in recent years due to increased enforcement of existing law (according to the U.S. Centers for Disease Control and Prevention, only 3.1 percent of high school students vape daily). Adequate and appropriate enforcement of existing law—not increasing taxes—is what will continue to drive this number down.”

    The recent Population Assessment of Tobacco and Health (PATH) study suggest Tobacco 21 laws are having the intended effect. Howard suggests that while limiting the minimum age of sale is seemingly effective, “it remains an open question as to whether any additional innovation is required, as additional time may show that youth access has been sufficiently curbed.”

    Other innovative regulatory responses to youth vaping have had mixed results. Outside taxation and Tobacco 21 laws, any effectiveness seems hard to prove. Research suggests that there are few studies available that show what impact differing regulatory actions have on youth vaping. A study published in BMC Public Health, Policies that limit youth access and exposure to tobacco: a scientific neglect of the first stages of the policy process, examined 200 international peer-reviewed articles. The researchers found that scientific evidence on the policy process for youth-prevention initiatives were scarce.

    “The processes influencing the adoption of youth access and exposure policies have been grossly understudied. A better understanding of the policy process is essential to understand country variations in tobacco control policy,” the researchers wrote. They then went on to suggest that “policymakers can adopt and implement various supply-side policies to limit youth access and exposure to tobacco, such as increasing the minimum age of sale, limiting the number or type of tobacco outlets, or banning the display of tobacco products.”

    Credit: Balakley PB

    Howard questions whether regulations limiting the number of tobacco outlets/vape shops or display bans would materially impact youth access. “Which companies should lose their business licenses?  Should only major chains, with arguably more control over storefronts, be permitted to sell tobacco products?” Howard asks. “How will removal of businesses prevent youth from obtaining tobacco products?  Yes, there will be less stores to find products, but that doesn’t mean youth vaping will decline. During the ‘youth vaping epidemic,’ Walmart, arguably the largest retail footprint in the U.S., removed vapor products from its stores—is there evidence of reduced youth vaping as a result? Finally, banning tobacco product displays may impact youth exposure to products, but would also reduce adult smokers’ exposure to different, potentially less harmful, products.”

    Incentivizing success

    There may be more innovative options to consider in controlling youth access. Another potential avenue to curb youth access may be to require manufacturers to offer incentives to retailers to maintain good practices. B2B sales discounts or incentives for meeting certain standards is likely to go a long way toward limiting youth access, according to Howard.

    “Manufacturers can incentivize limiting the number of products in a transaction to prevent straw sales, passing compliance checks, tobacco sales training and participating in the We Card program to encourage retailers to ‘up their game’ in preventing youth access,” he says.

    States are slowly becoming more innovative in their regulatory approach to youth vaping. Hawaii, for example, is considering the passage of a law that would require its Department of Health (DOH) to coordinate with its Department of Education (DOE) to establish a “take back” program for students to “voluntarily dispose of electronic smoking devices, flavored tobacco or synthetic nicotine products, and tobacco products in their possession.” If passed, the rules would also require DOH and DOE to coordinate quarterly meetings with students on addressing the youth vaping epidemic.

    Many industry experts agree that the vaping industry, tobacco control community and regulators should be working together to solve the problem of youth uptake. However, that seems unlikely. It could be argued that the world’s most prominent regulator, the FDA’s Center for Tobacco Products (CTP), should be bringing stakeholders together to seek out common solutions to these problems. That hasn’t happened, according to Howard.

    “It appears CTP felt compelled to use a club, as opposed to a scalpel, to excise youth vapor use. Banning flavored pods and blanket denials of millions of [premarket tobacco product applications] PMTAs for flavored products through sweeping [market denial orders] MDOs removed most industry stakeholders in just about a month,” says Howard. “While much of this was thrust upon CTP by outside forces, it is hard to imagine, when they can completely control the issue, why would CTP now resort to compromise solutions?

    “CTP and the tobacco control lobby both detest those bad actors that market their products without regard to this important issue. Companies that actively follow the rules detest these bad actors, too.  CTP, tobacco control and the ethical side of the industry should join forces to root these bad actors out.”

  • TMA: Talking With FDA

    TMA: Talking With FDA

    Mike Ligon, TMA board chair, and Matt Holman, director of the CTP’s Office of Science, discuss regulatory reaction.

    By Timothy S. Donahue

    The U.S. Food and Drug Administration has been busy. Before it had the chance to finish the first round of premarket tobacco product application (PMTA) reviews, the agency’s Center for Tobacco Products (CTP) was charged with also regulating all synthetic and other nontobacco-derived nicotine products (see “Unnatural Response,” page 28). Manufacturers must submit PMTAs for the newly regulated products by May 14, 2022.

    During the 103rd annual meeting of Vapor Voice’s parent company, TMA, Mike Ligon, TMA board chair, and Matt Holman, director of the FDA CTP’s Office of Science (OS), discussed the regulatory agency’s challenges and lessons learned in regulating electronic nicotine-delivery systems (ENDS) and other novel tobacco products. It was the first time Holman had spoken publicly since Congress granted the FDA the authority to regulate synthetic products, and Ligon emphasized that the audience was eager to hear Holman answer questions.

    Holman made clear from the beginning that he heard during the conference that the FDA needs to do a better job with consistency, transparency and predictability. “That’s something I’ve strived to make sure we do as office director, but I’m hearing we’re not doing as good a job as we need to,” said Holman. “That’s something I’m certainly taking back to my colleagues to figure out … I think the point I’ve heard the most along those lines was just the timing and not knowing what the timing would be [for] taking action on applications. We need to do a better job of that.”

    Credit: Timothy S. Donahue

    After a federal judge ordered the FDA to complete a majority of PMTA reviews by Sept. 9, 2021—one year after the deadline for PMTA submissions—Holman said the review process was still new and that it was a challenge to build the programs necessary to complete reviews on time. He said that staffing the agency, for example, was a giant undertaking.

    “Something folks outside the agency don’t think about all that much is staffing levels. When I took over this position, we had something around 325 staff members that were in the office,” Holman explained. “And now, five years later, we have about 575-ish. Any of you who have not been in the federal government and tried to hire—it is a huge-level effort to hire that many people in that period of time; a huge-level effort … half my staff have come on board during the pandemic and have not met colleagues in person.”

    Holman said that the big-picture goal for the OS and FDA alike is creating an offramp for smokers to transition to less-harmful products while minimizing any potential on-ramps for youth initiation, adding that youth use has been “decreasing the last couple of years, which is a really positive thing.” He also explained that the agency often hears a lot of criticism, some undeserved, surrounding the misinformation disseminated into the public by “stakeholders” (anti-nicotine organizations, health agencies, tobacco control groups, regulators and industry players).

    “We take all the feedback seriously … And we certainly actively encourage all stakeholders to engage with one another. I would hope to be able to sit here and say that I’ve been more successful than I have in that. There’s still a lot of resistance. There’s still a lot of really emotional, heated exchanges and feelings toward stakeholders,” said Holman. “I’m even seeing a shift in some of the stakeholder groups that have been aligned [previously] and now aren’t necessarily aligning.

    “I’ve just celebrated 20 years at the FDA in December. That entire 20 years, I’ve spent really actively engaging with all stakeholders, and I think it’s critical as regulators that we hear from and we talk with and we communicate—and we’re trying to be as transparent as possible—with all stakeholders. Unfortunately, I don’t control all the stakeholders. And I keep carrying this message forward. It doesn’t always get heard so well. And so, it’s still very much a work in progress.”

    Ultimately, Holman said the FDA is trying its best to base its decisions on the “good” science and not a specific source of data. “I don’t even care who the author is. I mean, the science is science,” he said. “Unfortunately, we have a lot of stakeholders that don’t look [at] it that way, and a lot that think they know what the policies shouldn’t be, and they want to come up with the science to demonstrate that. But we’re very aware of that. We’re very much looking out for that type of thing.”

    Being approachable

    Holman said he understands the frustration of trying to combat misinformation. On the FDA’s side, he wanted to clarify at least some of the misunderstandings and misperceptions he commonly hears when stakeholders discuss the FDA. For example, he had recently heard a stakeholder saying that the FDA only had one economist on staff. “FDA has more than one economist,” he said. “The CTP has more than one economist. I want to be clear about that … You can agree or disagree with where economists land on their analysis. That’s fine. But just to say that we only have one economist—this concern is just a major misrepresentation of the situation.”

    There are also the rumors that the regulatory agency doesn’t read all the docket submissions (everything submitted to the agency, whether a comment on rulemaking or a PMTA). Holman said the quality of the submissions vary greatly, but the agency is required by law to look at every single one. “To suggest that the FDA’s regulators don’t carefully consider the data when we’re weighing options … at the end of the day, we have a public health mission where we’re here to serve,” said Holman. “We’re not here to oppose anyone. I look at data from all sources. I don’t care who it comes from … to suggest anything otherwise, at least for the FDA, honestly, it’s a bit insulting … you can criticize all you want about where we come out on decisions and rulemaking, but at the end of the day, we are very much a science-based organization.”

    Credit: Timothy S. Donahue

    The agency also tries to consider the unintended consequences of regulatory action, according to Holman.

    However, he explained that determining these factors, such as the growth of a black market, is complicated because there’s often not a lot of data.

    “It’s very much [speculating] what’s going to happen to the black market or the gray market when we take an action. We don’t often have data on that. So it’s really modeling or predicting,” he said. “We absolutely consider that because, at the end of the day … as I like to say to my staff, we’re trying to tackle this with a scalpel not a machete. Because I think that’s how you sort of leave this fine line that we’re all trying to leave here.”

    Ligon asked Holman whether the FDA’s approach to regulating next-generation tobacco products was a workable standard. Ligon wanted to know if the FDA still recognizes that tobacco products exist on a continuum of risk, with combustible cigarettes being the most harmful (the “continuum of risk” is the scientific concept that not all tobacco and nicotine-delivering products are equally harmful). Holman said that while the FDA doesn’t know precisely what the relative risks are of the different products on the spectrum, the agency still believes in the continuum of risk.

    “The challenge is having strong, rigorous data that we can stand behind and say, ‘Yes, we know this product is lower in risk than that product.’ That’s one of the biggest challenges still, I think, figuring out how to collect that data, what are the right types of studies, what’s the sort of full body of data that we need to be comfortable saying, ‘Yes, this product is down the continuum from that product,’” he said. “I think the other big challenge in this is … communicating with the consumers because if they don’t understand—and we know there’s a lack of understanding—a lot of misperceptions and misunderstandings [begin to grow].”

    Workable solution

    Communication is key. Holman said that to better understand the process and the challenges that stakeholders are suffering, the agency needs to better communicate its thought processes and goals. Before the Covid-19 pandemic limited stakeholder interaction, the agency would hold workshops to hear directly from stakeholders about their concerns. Holman wants to bring back that level of communication.

    “We need to do workshops. It’s been almost a year since we’ve done the last workshop, and a whole heck of a lot of things have happened in that time period. We’re definitely going to take that back with our staff and talk about how to put some workshops together because the feedback we’ve gotten to date on the workshops we have done [previously] have been very positive,” said Holman. “Folks really appreciate the discussion. Not only to hear what we have to say, but just talks among attendees and some shared ideas and thoughts.”

    Matt Holman / FDA

    When asked if there were any suggestions from TMA attendees for workshop concepts, several stakeholders offered ideas. One stakeholder wanted to discuss with the FDA how PMTA data is managed and submitted to the FDA. The participant said that his company had received a deficiency letter; however, the additional data requested was already included in the company’s PMTA. Holman said that type of seminar would be a “win-win” for both the agency and the stakeholders.

    Another attendee suggested that the agency bring in consumers to allow the FDA to hear from them directly and to understand the consumers’ thoughts, behaviors and attitudes as well as the impact of potential regulations on possible future consumer behavior. “I just feel like there’s a gap,” the attendee said. “I really think that would do a lot in being able to bring all of us together to promote the science.”

    Other attendees wanted to have a better understanding of how the FDA comes to its decisions and what some of the common errors were in PMTAs that had received marketing denial letters. “I’m suggesting a little bit [of a] deeper dive by product category into the top 10 reasons you’re finding that something succeeds and [the] top 10 reasons you’re finding that something fails,” the attendee said. “I’m talking more about … here are the reasons why these fail … here’s why this doesn’t work.”

    Holman said the fundamental goal of the FDA is moving people down the continuum of risk. He said that the consumer is the most important part of the equation and that all stakeholders need to be better at getting less-harmful tobacco products into the hands of adult combustible smokers. He said that he would hope that five years from now the tobacco product marketplace looks very different. Holman suggested that manufacturers with the ENDS products that exist now, alongside the “products we’re not even talking about that I know are in the pipeline” at various companies, should also consider using the agency’s modified-risk tobacco product (MRTP) pipeline moving forward.

    “I would hope that our MRTP program sees a lot more action and that we see a lot more modified-risk statements on products … And again, I think the lack of dialogue amongst stakeholders, and the lack of sort of any level of agreement, really thwarts communication because the information the consumers are receiving, it’s all over the place, right?” Holman suggested. “There’s a lot of misinformation out there that certain stakeholders convey that just doesn’t reflect the science. Just flat out doesn’t … if we could just get stakeholders to agree on some basic key communication points that we would all collectively share with consumers, I think we could really drive this forward. But right now, consumers are just confused.”

  • Unintended Consequences

    Unintended Consequences

    The number of crimes committed at specialty retail outlets has grown dramatically over the past few years.

    By Timothy S. Donahue

    Every year, hundreds if not thousands of cannabis dispensaries, vape shops and tobacco outlets are robbed or burglarized in the U.S. On July 10, in Lincoln, Nebraska, between 2 a.m. and 5 a.m., the police department responded to alarms at two vape shops where officers found shattered storefront glass at both locations. The thieves targeted CBD (cannabidiol) and Delta-8 THC (tetrahydrocannabinol) products. The pair of break-ins happened two days after another similar burglary, totaling three in as many days. The businesses lost tens of thousands of dollars in merchandise.

    Timothy Goodman, a manager at the Lincoln Vapor location, said that break-in was just the latest in a string of six incidents in approximately the last two years, according to news reports. Goodman, who has worked at Lincoln Vapor for nearly four years, said it’s his understanding that every break-in can be linked back to the same group.

    The burglars stole $2,000–$3,000 worth of merchandise in May 2021 and have lifted around $16,000 in products from the business through the last year and a half, according to Goodman. Most products were hardware and cannabis products, such as CBD and Delta-8 THC. “It’s frustrating beyond belief,” he said. “I wake up most nights in the middle of the night and check the cameras to make sure nobody got in.”

    The rise in vape shop crimes may be an unintended consequence of recent regulatory actions, such as tax increases, flavor bans and raising the age to purchase vaping and tobacco products to 21, according to many industry experts. Richard Marianos, a senior law enforcement consultant who has served more than 27 years at the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives and who is now a consultant and adjunct lecturer at Georgetown University, says crime is often an unintended and overlooked consequence of regulatory constraints on the marketplace that encourage the growth of black markets.

    Credit: Lexington Police Dept.

    Marianos said 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. “If you have any form of tobacco harm reduction in your state, just throw that completely out the window [if you are going to implement flavor bans and raise taxes exorbitantly] because it forces young adults and people who can’t afford these products into a growing black market. 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.”

    Sam Salaymeh, president and CEO of AMV Holdings, parent to a chain of 113 Kure CBD & Vape shops across the U.S., said that his stores have seen a major increase in crime over the past two years. During Covid-19 lockdowns in 2020 through early 2021, AMV stores had over 20 burglaries combined. “There is a myriad of stories that come with these break-ins, but the main theme is criminals are trying to get to high-value items that are small in size—and that would be the CBD/cannabis products … etc.,” explains Salaymeh. “This is happening more and more across the country.”

    Credit: Manatee County Sheriffs Office

    During a one-hour period on Dec. 20, five separate retail locations—three vape shops and two tobacco/vape outlets—suffered a string of robberies by three men wearing masks that crossed the Southeast region of Los Angeles County. A shop owner said the criminals pretended to be customers when one pulled a gun and demanded money while two others snatched merchandise from the store’s shelves, according to news reports.

    Credit: UK Vapers

    “We now have organized crews that go out and hit multiple stores like convenience stores, gas stations, vape shops in a single night or a weekend … they don’t go for cash registers; they want the tobacco products because they can sell it on the street cheaper than what it’s being sold for with these high taxes and these prohibitions,” says Marianos. “They’re making a fortune in the black market the same way the dope dealers are selling cocaine and heroin because the taxes on vaping and tobacco products are going through the roof.”

    Crimes of convenience 

    In 2020, there were 102,677 robbery incidents and 102,677 offenses reported in the U.S. by 9,991 law enforcement agencies that submitted National Incident-Based Reporting System (NIBRS) data. Nearly 25 percent of those incidents were committed at convenience stores (13,721), gas stations (7,006) and specialty stores, where vape shops are lumped into (5,372) combined. If criminals are looking for quick cash, then robbing convenience stores or small specialty retail shops is one of the best ways to do it, according to the FBI.

    John Cavanaugh, owner of California-based Vaping Industries, says that thieves have broken into his stores numerous times. Typically, thieves try to take what’s immediately available. “They broke in after hours … broke the glass, popped open the register, grabbed the cash, broke into my office, got the petty cash and then rolled out,” he said. “I think we are starting to see more robberies than burglaries lately, and I think that it’s an easier target to hit a vape shop or a smoke shop with guns because the layout is small, there’s only typically one or two employees and—especially with cannabis dispensaries—there’s a lot of cash on hand.”

    Burglary
    Robbery

     

    The terms “burglary” and “robbery” are not interchangeable.

    They have meaningful differences.

    Burglary involves a person illegally entering a building to commit a crime while inside.

    Robbery is typically when someone takes something of value directly from another person using force or fear.

    There is a far greater chance that someone committing a robbery will do so armed compared to burglaries, which typically occur after hours.

    Convenience stores accounted for nearly 13 percent of all violent crimes suffered in 2020, and gas stations accounted for about 12 percent.

    Across North America, crimes involving vapor, tobacco or cannabis shops are getting more violent. On Dec. 3, in Calgary, Canada, officials said a “number of people” entered Jerry’s Smoke and Vape just after 6:30 p.m. According to a police report, one of the suspects pointed a gun at the clerk, and the bandits made off with cash and merchandise.

    On Sept. 12, in British Columbia, a suspect entered a vape shop alone armed with a shotgun. After threatening an employee, the suspect took an undisclosed amount of cash and product before escaping on foot. Over the weekend of May 29 to June 1, 2020, thieves burglarized several cannabis dispensaries, distribution centers and cultivation in Los Angeles, Oakland, San Francisco and other cities, stealing legal commercial cannabis products and cash. On Sept. 11, 2021, in Calgary, Canada, three masked men entered a dispensary armed, held off staff and got away with a quantity of cannabis products.

    Cavanaugh said robberies are more common at cannabis dispensaries than vape shops because cannabis dispensaries have a lot of cash on hand, especially in the U.S. where very few banks will work with marijuana businesses. There are also numerous illegal cannabis dispensaries, which perpetrators know are less likely to notify law enforcement.

    “Before all of this started happening over the last few years, I didn’t really believe in upping my security. Now, I have to make sure that there are panic buttons, that my staff are properly trained for when somebody comes in with guns blazing,” he says. “They need to know to just give it all up. Give them the cash and whatever they want. It’s OK. It isn’t worth your life. I’m also now spending extra money for high-end security cameras and security systems. It’s frustrating.”

    Crime prevention

    According to Marianos, there are several reasons why thieves target convenience stores and gas stations and now vape shops and dispensaries: operating hours and low numbers of staff on site, and these types of stores have smaller layouts, so it’s easier to find the expensive/high demand products and there is the potential for large amounts of cash on-site.

    “You don’t want it to make product accessible where somebody can just take a trash can, throw it through the window and get into your shop and take all your stuff,” says Marianos. “More cameras, limiting the amount of people that are coming in like they do at jewelry stores—these businesses need a similar model that retailers with high-end products have. In some higher crime areas, you may even have to hire a security guard.”

    Vandalism, from smash-and-grab types of crimes, has occurred so often at AMV stores in recent years that Salaymeh says he has a toolkit in his garage ready to go at a moment’s notice with everything needed to board up a store. He says he involuntarily became an expert at it. Salaymeh says that while it is rare for AMV stores to alter operating hours, it is a tactic they have used in the past. He says that having at least two staff members at all times in some locations, installing security cameras and other security measures are the primary tools store owners have in their arsenal to help deter crime.

    “Security cameras help us at least get the story behind what happened and potentially pictures of the thieves. We also try to limit the access potential thieves have to valuable product … and we’ve tried to keep the lights on after hours so that people can actually see that these products aren’t lying around or in display cases,” he says. “We leave the register drawer open so that people, when they walk up, they see there’s no cash.”

    Another unintended consequence of overzealous taxation and regulation is the impact it has on local law enforcement, according to Marianos. He says enacting some of these rules are, in effect, giving police more work to do in terms of harassment violations that have no teeth instead of fighting real crime.

    “Instead of being able to work on what they should be working on—to serve and protect—are we going to be calling the police because someone is vaping a flavor?” he asks. “What is law enforcement going to do with all this nonsense? What are they going to charge the guy with? What is the crime? Do you know what I mean? It becomes an hour and a half just sitting around trying to figure out what we’re going to do here.”

    During his interview with Vapor Voice, Salaymeh’s phone rang. It was the security firm ADT. One of the Kure stores had an alarm going off. He said it happens multiple times a week. There is insurance available for specialty shops, but both Cavanaugh and Salaymeh say it is expensive. The deductible is often higher than the amount of damage suffered during a crime. Both say they rarely, if ever, claim any damages with their insurance companies.

    Credit: Tulsa Police

    Another overlooked result of rising crimes in these specialty sectors is the impact on the economy and the lives of employees. Cavanaugh said that crime has forced him to shutter two stores, and he now struggles to keep the doors open in his remaining location. Increases in crime, overregulation and misinformation concerning the health and safety of vaping, and the causes (illegal THC vaping products) of e-cigarette or vaping use-associated lung injury have been too much to bear.

    “We are doing our best to deal with the reality of today’s vaping industry,” Cavanaugh said. “I want to keep my doors open, and people depend on us; that’s important.”

    Salaymeh says he had to close some stores during the Covid-19 pandemic, some of which were temporary. The closures weren’t all crime-related, he explains, but most of them were. There was a period when stores were not allowed to be open, so burglaries were happening, and stores couldn’t sell anything to try to recover losses. “We’re trying to keep people employed. The height of the pandemic was a very, very, very difficult time for our company and many companies like us. The primary victims of these senseless crimes are the people who don’t have a job to go back to because I shut down 18 stores during that time,” he says. “Think about that.” 

  • Look Back: Vapor in 2021

    Look Back: Vapor in 2021

    Last year was a difficult one for vapor companies as regulation, taxation and flavor bans made their impact on the industry.

    By VV staff

    On Sept. 9, 2020, e-cigarette manufacturers needed to have submitted premarket tobacco product applications (PMTAs) to the U.S. Food and Drug Administration to keep their electronic nicotine-delivery system (ENDS) products on the market. Going into 2021, many applicants hoped to receive marketing approval orders. That didn’t work out. Instead, the FDA rejected the vast majority of applications—many of them for excluding studies that the agency didn’t appear to require at the start of the process.

    By Dec. 31, 2021, the FDA had issued marketing denial orders (MDOs) for most of the more than 6.5 million PMTAs submitted by 500 companies. Only an estimated 80,000 products remain under review and, as of press time, only the Vuse Solo and two tobacco-flavored Solo pods have received a marketing approval order. Many of the applications still under review are “ones submitted by the companies with the largest market shares because they tend to be the largest and most complex applications,” according to Mitch Zeller, head of the FDA’s Center for Tobacco Products (CTP).

    The U.S. Postal Service (USPS) banned the mailing of vapor products in 2021, and Congress started debating a federal nicotine tax, which at press time had been removed from the legislation. Last year, many MDO recipients had those orders stayed by a court or rescinded by the FDA. Withdrawn products returned to market, leaving retailers confused. Misinformation about vaping was widespread throughout the year. Synthetic nicotine and disposable vape pens began to dominate sales and several new cannabinoids came to market. Let’s look back at the top stories of 2021.

    January

    Beverly Hills and Manhattan Beach, both in the Los Angeles area, began to enforce a ban on vapor products, the strictest vaping rules in the U.S.

    Shares in Chinese e-cigarette maker RLX Technology, parent to the RELX brand, jumped 146 percent in their trading debut after raising $1.4 billion in its U.S. initial public offering.

    Following the enactment of smoke-free laws in Paraguay, every South American country banned vaping and smoking in most public places.

    The FDA sent its first warning letters to manufacturers of ENDS products that did not submit PMTAs by the Sept. 9, 2020, deadline.

    Credit: TPB

    February

    Turning Point Brands announced a proposed private offering of $250 million aggregate principal amount of its senior secured notes due 2026.

    The public comment period began for the U.S. Postal Service’s ENDS mailing rules. R.J. Reynolds Vapor Co.’s (RJRV) Vuse Alto began selling nationally in the U.S.

    Utah Senator Mitt Romney pushed for flavored vaping products to be pulled from shelves across the United States.

    March

    The World Health Organization study group on Tobacco Product Regulations recommended prohibiting open systems.

    The litigants in two lawsuits challenging the constitutionality of the FDA’s Deeming Rule for vapor products, Big Time Vapes and Moose Jooce, asked the Supreme Court of the United States (SCOTUS) to take up their cases.

    The Preventing Online Sales of E-Cigarettes to Children (PACT) Act forced many companies to end online sales to U.S. customers. Many went out of business altogether because of the new rules.

    China announced its intent to overhaul rules governing the ENDS market. The news caused a steep drop in the value of RLX Technology shares, from which the company has yet to recover.

    Kate Wang / Credit: RELX

    April

    Virginia became the 16th state and first southern U.S. state to legalize the possession of small amounts of marijuana.

    Charlie’s Holdings, parent to the Charlie’s Chalk Dust and Pacha Mama brands, raised $3 million in a private stock sale.

    American TV personality Phillip Calvin McGraw, also known as Dr. Phil, wrongly blamed the e-cigarette or vaping use-associated lung injury (EVALI) lung illness outbreak on vaping nicotine products. The USPS published its guidance for mailing vaping products in the Federal Register.

    The FDA stated its intent to ban menthol as a characterizing flavor in cigarettes, saying it would exclude e-liquids.

    May

    An estimated 3,000 people visited the Tobacco Plus Expo (TPE) on the opening day of the three-day event, the first vapor trade show since the pandemic began.

    The WHO reasserted its abstinence-only approach to nicotine. The U.S. International Trade Commission (ITC) ruled that Philip Morris International’s IQOS device infringes on two patents owned by BAT subsidiary Reynolds American Inc.

    Meanwhile, a judge ruled that RJRV’s Vuse Solo and Ciro e-cigarettes infringe patents owned by Fuma International. Joining a growing number of U.S. states, New York expressly prohibited Delta-8 THC and other THC isomers derived from hemp.

    The FDA published a list of ENDS products that could be legally marketed in the U.S.

    June

    Poda Holdings launched its “zero cleaning” heat-not-burn (HnB) product after six years of development. SCOTUS denied Big Time Vapes and Moose Joose a request for a writ of certiorari. The German Bundestag signed off on a bill to raise taxes on combustible cigarettes, e-cigarettes and HnB tobacco products.

    An investor filed a class action suit against RLX Technology, claiming the manufacturer overstated its financials and misrepresented potential regulatory risks when it filed its IPO. San Francisco, Connecticut, Washington, D.C., Los Angeles and Canada proposed or enacted flavor bans.

    A study in the U.K. gave homeless people free e-cigarette starter packs. North Carolina settled its lawsuit with Juul Labs for $40 million.

    July

    Vaporesso and FEELM parent, Smoore International Holdings, was the only vaping technology company to make the Forbes 2021 Global 2000 list.

    Australia set maximum fines of up to aus11 million ($8.2 million) for businesses caught selling illegal nicotine vaping products.

    The FDA was accused of issuing unwarranted warning letters and leaving companies off of its list of accepted PMTAs. The agency was also criticized for using poorly functioning PMTA filing software.

    Juul Labs paid $51,000 to buy an entire issue of the American Journal of Health Behavior to publish its own vapor studies and make it publicly available. The town of Brookline, Massachusetts, prohibited the sale of all tobacco-related products to anybody born after Jan. 1, 2000. The Chinese vaping company Aspire Global announced terms for its U.S. IPO—which didn’t happen.

    The Federal Bureau of Investigation and the Drug Enforcement Administration raided the cannabis culture and accessories trade show, CHAMPS, because vendors were giving unauthorized Delta-8 THC product samples. Bidi Vapor parent, Kaival Brands, began trading on the NASDAQ.

    August

    The FDA issued a Refuse to File letter to the JD Nova Group for its estimated 4.5 million PMTAs, which accounted for approximately two-thirds of the total number of PMTA submissions.

    Smok Parent, IVP Technology, considered a Hong Kong IPO—which didn’t happen. The FDA issued the first MDOs covering more than 55,000 products.

    A study found that, contrary to what earlier studies suggested, vaping products are not associated with increased heart attack incidence among people without a history of smoking combustible cigarettes.

    September

    As the PMTA deadline approached, the FDA asked for more time before deciding whether some “e-cigarettes from market leader Juul Labs” and others are appropriate for the protection of public health. Numerous companies received MDOs from the FDA the night before the deadline.

    Vuse became the No. 1 global vaping brand by value share. No product got marketing orders on the court-imposed Sept. 9 deadline; instead, the FDA issued MDOs to more than 130 small companies, including Turning Point Brands, requiring companies to pull an estimated 946,000 products from the market.

    Congress proposed the U.S. Tobacco Tax Equity (TTE) Act, which would tax vaping products the same as combustible cigarettes. The legislation later gets attached to the Build Back Better (BBB) Act. The FDA released its annual National Youth Tobacco Survey (NYTS) showing that youth use of e-cigarettes fell sharply in 2021, the second consecutive year of major declines.

    The FDA said the 2021 NYTS can’t be compared to previous years because Covid-19 caused schools to close and altered testing procedures.  

    October

    Zanoprima Lifesciences announced the commercial production of its SyNic brand of synthetic (S)-nicotine. Turning Point Brands had its MDO rescinded by the FDA because the company did in fact submit newly required studies.

    The FDA’s Fatal Flaw review process was revealed after court documents were released. After more than six months, the USPS finally posted for public inspection its rules for mailing e-cigarettes in the Federal Register.

    The FDA gave the first ENDS marketing approval to RJRV’s Vuse Solo device and two tobacco-flavored pods, which are widely regarded as antique products compared to current vaping offerings.

    The FDA authorized the marketing of four oral tobacco products that are no longer on the market. Ten MDOs were rescinded or stayed by the FDA or in court.

    November

    More details surfaced surrounding the Fatal Flaw review, a simple review in which the reviewer examines the submission to identify whether it contains the necessary types of studies. “The Fatal Flaw review will be limited to determining presence or absence of such studies; it will not evaluate the merits of the studies,” an FDA memorandum states.

    Previously proposed nicotine/vapor tax increases were removed from the BBB Act.

    The Conference of the Parties to the WHO Framework Convention for Tobacco Control held its ninth session, this time virtually.

    The nicotine tax resurfaced in the BBB Act. RJRV settled its Fuma lawsuit two days before the trial was set to start.

    Biden nominated former FDA chief Robert Califf to again lead agency.

    December

    Draft rules governing e-cigarettes and vapor products were issued by China’s tobacco regulator.

    The nicotine tax was again removed from the BBB Act.

    The U.S. Trade Representative upheld the ITC’s finding that Philip Morris International’s IQOS infringes on BAT patents and Altria ended all U.S. sales.

    The Spanish government took control the country’s sales and distribution of vaping products.

    CTP Director Mitch Zeller announced plans to retire from the CTP in April.

    Once the largest chain of vape shops, Avail Vapor sold the majority of its retail locations and closed its remaining stores.

    Turning Point Brands received a USPS exemption for its VaporBeast subsidiary’s vape mail.

    The FDA authorized the marketing of 22nd Century Group’s low-nicotine, combustible filtered cigarettes as modified-risk tobacco products.

    Looking ahead

    The outlook for 2022 is vague at best for vapor. The FDA has a new director, and Zeller is retiring from the CTP, and things can change quickly under new leadership. It’s expected that the FDA will make decisions on the major ENDS brands at some point in the year, and there are still an estimated 44 lawsuits pending over the issuing of MDOs. The industry has already seen numerous vapor-related businesses close, consolidate or be bought out by larger competitors. Experts say that much of the same can be expected in 2022.

    “With the announcement of Zeller stepping down, I think we will continue to see vastly extended approval times for the majority of vapor products still being evaluated by the FDA, especially with open litigation covering many of these products,” said Josh Church, managing director of Roots Holding. “The products that do make it through the approval process will be high-value SKUs to large tobacco product manufacturers and will likely either be bought outright or there will be some agreement in equity share to utilize tobacco’s historic distribution network.”

    Last year left a lot of questions that the industry still needs answers to in 2022. There also probably won’t be many major changes in the vapor market other than continued sales growth in 2022, according to Church. “I think we can all agree that 2021 was a rough year. I believe that this year, we will observe the run out of the mail ban—effects of the PACT Act—on ecommerce,” he said. “That will come alongside continued brick-and-mortar business closures for those who don’t diversify their product offerings. I wouldn’t say 2022 is going to be worse than 2021, but I don’t expect it to change very much either.”

  • What’s Next for Vapor?

    What’s Next for Vapor?

    The long roller coaster ride for the vapor industry will likely continue for the foreseeable future.

    By Chris Howard and Rich Hill

    It’s been a long and arduous journey since the finalization of the Deeming Rule in 2016. As most of you will recall, this was the moment when we transitioned from operating in an unregulated market to plowing forward under a complicated and onerous regulatory scheme in the blink of an eye. Shortly thereafter, the U.S. Food and Drug Administration announced a renewed prioritization of harm reduction and proclaimed that vapor could play a leading role in that effort.

    Chris Howard
    Chris Howard
    Rich Hill

    Then, as quickly as a bright future for harm reduction blossomed, the lights dimmed, and vapor became the villain in the harm reduction story overnight. In addition to paralyzing propaganda and misplaced demonization by activist groups throughout the U.S., the industry also faced an onslaught of crippling requirements associated with a 10-month window to submit premarket tobacco product applications (PMTAs). Costing millions of dollars, 99 percent of the PMTAs ultimately submitted to the FDA’s Center for Tobacco Products (CTP) were summarily rejected based upon a standard, akin to a clinical cessation trial, that none in the industry expected.

    As of the date of this writing, some of the largest players in the e-liquid space have closed their doors or have moved into yet another risky proposition—synthetic nicotine. Despite the setbacks over the past several years, many still believe reports of vapor’s death as a harm reduction tool are greatly exaggerated. Notwithstanding this cautious optimism, it is clear that 2022 is going to be yet another difficult year for the vapor category.

    Current state as we enter 2022

    As we enter 2022, much of the flavored e-liquid market is gone and may never return. While we have seen marketing orders for first-generation e-cigarettes and tobacco disks that are no longer marketed, we have not seen marketing orders for any modern electronic nicotine-delivery system (ENDS) or oral nicotine products. We have seen a marketing order for a combustible low-nicotine cigarette, along with a reduced exposure order for the same. While litigation continues around the rejected PMTAs, the FDA still lacks a commissioner, and we have no knowledge of who will replace retiring CTP Director Mitch Zeller. Most importantly, other than removing flavors from the market, we have no clear understanding of the FDA’s harm reduction strategy.

    Predicting the future in 2022

    PMTAs. Few question the fact that the CTP was given a Herculean task by the Maryland federal court. Processing, let alone reviewing, 6.5 million PMTAs in a year was unquestionably an impossible requirement. Candidly, the fact that the CTP was able to get the majority through acceptance and filing was a significant achievement. Of course, for most reading this, the outcome was obviously disappointing as nearly all requests for marketing orders for flavored ENDS products were rejected in late 2021. As the various challenges to the marketing denial orders play out over the next year, many hold out hope that the CTP will be found to have violated the Administrative Procedures Act and/or acted arbitrarily or capriciously in its decision-making process.

    Credit: JHVEPhoto

    With respect to those applications that remain pending with the CTP (primarily tobacco and menthol flavors, pod systems and disposable devices), we believe the FDA will issue marketing orders for several tobacco-flavored pods and disposable e-cigarettes in 2022. Assuming the remaining applications otherwise meet the statutory standards, there is little reason for the CTP to deny applications for tobacco-flavored pods, e-liquids and disposables given the evidence that such products are not particularly attractive to youth. That said, we question whether any action will occur before the new FDA commissioner and CTP director are in place and have an opportunity to address policy concerns.

    As for menthol offerings, we anticipate that the FDA will not act until the proposed product standard banning menthol is released. It was interesting to note that a menthol-flavored combustible cigarette with lower nicotine levels was granted an exposure modification order. The CTP’s action may indicate a desire to provide “off-ramps” for combustible menthol cigarette smokers in a world where menthol cigarettes are potentially banned. Ideally, the CTP will grant marketing orders for menthol-flavored ENDS to provide an alternative product for current menthol cigarette smokers. This would provide a potential cessation or maintenance product to the millions of menthol smokers in the U.S.—thus reducing the risk of the formation of black and gray market activities.

    Credit: SYCprod

    Finally, marketing orders for flavored ENDS products seem unlikely in 2022. If the clinical cessation trial/longitudinal cohort study requirement proves to be administratively appropriate, it would seem difficult, if not impossible, that any flavored product will even make it to the review phase with such data for six months to 12 months at a minimum. Even then, it is an open question as to how much and what kind of data will be deemed to be sufficient by the CTP. We see a world where flavored ENDS are once again marketed, but it seems unlikely to occur in the near future.

    Product standards. We have all heard that the CTP intends to issue draft product standards banning both menthol in cigarettes and flavored cigars by April of this year. These purported product standards, along with the recent marketing orders granted for lower nicotine combustible cigarettes, are telling with where the focus of the FDA’s policy stands. The standards appear to demonstrate an agency bent on removing any flavors from combustible tobacco products unless those products cannot create or sustain addiction. We can be assured that the product standards will face a blizzard of regulatory and legal challenges and will likely take many years to implement.

    Synthetic nicotine. A few months ago, synthetic nicotine seemed like the last bastion of flavored ENDS products in the marketplace. While these products currently do not have a regulatory home, we fully expect that the existing legislative efforts will ultimately provide the CTP the authority to regulate synthetic nicotine. Once granted, all regulatory requirements for deemed tobacco products will apply, such as PMTAs. In the unlikely event Congress does not successfully provide such authority, we expect state legislatures to address the issue with prohibitive laws banning synthetic nicotine.

    FDA administration. One wildcard in the mix is the turnover in key personnel at the FDA. In his largely collegial confirmation hearing, the commissioner nominee, Robert Califf, stated that his top two priorities upon confirmation were not tobacco related. Rather, he intends to focus on (a) emergency preparedness and response and (b) patient and consumer protection through “systematic evidence generation” related to medical and food products. While he faced few questions on tobacco-related issues, many skeptics believe his views toward tobacco products are similar to the current administration. Whether he will take a proactive stance toward prioritizing harm reduction is unknown.

    Credit: Neil Lockhart

    Unfortunately, Zeller’s retirement removes a harm reduction proponent. What can we expect in a replacement? In short, the most likely replacement will be a candidate who has solid tobacco control chops and is aligned with the current policy flow against flavored products. We don’t expect to see any novel tobacco control or harm reduction policies (akin to former FDA commissioner Scott Gottlieb’s approach in 2018).

    The roller coaster ride continues

    Unfortunately, it appears that the long roller coaster ride for the vapor industry will continue for the foreseeable future. The good news, if you can call it that, is that the Biden administration has a variety of nontobacco-related issues to address—particularly up to the mid-term elections—which could lessen the likelihood of additional draconian polices imposed on the industry. At this point, it appears that 2022 will be about waiting—waiting for court decisions, waiting for policymakers and waiting for policy decisions.

    We won’t be so naive as to say that things can’t get worse in 2022. That said, if you have made it this far, now certainly doesn’t seem like the time to give up.

    Chris Howard is vice president, general counsel and chief compliance officer, and Rich Hill is compliance director and associate general counsel of E-Alternative Solutions, an independent, family-owned innovator of consumer-centric brands.