The U.S. Supreme Court declined Tuesday to hear arguments against the Food and Drug Administration’s regulatory authorization process.
The denial order comes in one of several cases questioning the FDA’s oversight of the vaping industry.
The US Court of Appeals for the Fourth Circuit sided with the FDA, finding that Avail hadn’t shown that its products had benefits for adults that offset the risk to youth.
The case is connected to the FDA’s 2021 determination to deny all of Avail Vapor’s requests to approve fruit and dessert-flavored e-cigarettes. The company claimed that the agency made the application process intentionally difficult, which led to mass denials of new product submissions.
In a Supreme Court brief filed Aug. 3, the company claimed the FDA failed to inform companies of a change in policy that would only allow for approval if the applications included data from studies conducted over time comparing the effectiveness of the multi-flavored products to that of tobacco flavored ones as an aid in adult smoking cessation.
Avail Vapor had asked the U.S. Supreme Court to examine a lower court’s refusal to review a marketing denial order issued by the FDA to Avail products.
In its petition, known as a Writ of Certiorari, Avail asked the Supreme Court to consider the lower court’s legal reasoning and decision.
Among other things, Avail argues in its petition that the FDA’s decision making was arbitrary and capricious; that another court sided with a different petitioner against the FDA on the same basic arguments; and that the case is significant not only for Avail but for the entire industry and its customers.
Eric Gotting and Azim Chowdhury, partners at Keller and Heckman, filed an amicus brief with the Supreme Court of the United States (SCOTUS) in support of Avail Vapor’s writ of certiorari petitioning the SCOTUS to review the 4th Circuit’s decision to uphold the U.S. Food and Drug Administration’s marketing denial order of Avail’s premarket tobacco product application for its nontobacco-flavored e-liquids, according to a post on The Continuum of Risk.
The brief, filed on behalf of a group of public health experts, is intended to provide relevant scientific background on comparative health impacts of electronic nicotine-delivery system (ENDS) products with combustible cigarettes.
The brief argues that ENDS are, beyond a reasonable doubt, much safer than cigarettes; ENDS help adult smokers quit and can reach many adults who would not otherwise quit smoking; ENDS flavors are important to adults trying to quit smoking; youth vaping has declined markedly since 2019, with most youth vaping being infrequent, nonaddictive and temporary, and more frequent and intense vaping generally limited to adolescents who are otherwise likely to smoke.
Youth do not generally use the refillable tank devices sold in vape shops but instead use more mass-market products; claims that vaping is a gateway to smoking are based on a misunderstanding of the evidence; and because smoking and vaping are linked, measures like e-liquid flavor bans can cause more smoking or other damaging unintended consequences.
In its petition, Avail asks the Supreme Court to consider the lower court’s legal reasoning and decision.
Among other things, Avail argues in its petition that the FDA’s decisionmaking was arbitrary and capricious; that another court sided with a different petitioner against the FDA on the same basic arguments; and that the case is significant not only for Avail but for the entire industry and its customers.
The Supreme Court has not yet decided whether it will hear Avail’s case.
No company is safe. The U.S. Food and Drug Administration has now issued marketing denial orders (MDO) to some of the largest manufacturers in the vaping industry. Turning Point Brands announced today that on Sept. 14 it had received an MDO in response to TPB’s premarket tobacco product applications (PMTAs) covering many of the company’s vapor products. All MDOs were for flavored products other than tobacco.
Credit: Cursed Senses
“While we believe the FDA’s current conclusion is misguided, we will continue our dialogue with the agency in search of a path forward,” said Larry Wexler, president and CEO, Turning Point Brands. “As we explore options for appealing this decision, we are hopeful that the agency reaffirms its commitment to science-based decision making and to its announced Comprehensive Plan, which includes fully transitioning adult consumers down the continuum of risk in order to reduce the morbidity and mortality associated with combustible cigarette use by preserving the diverse vapor market.”
Numerous other major e-liquid manufacturers, including Avail Vapor, have confirmed to Vapor Voice that they have also received MDOs from the regulatory agency for e-liquid flavors other than tobacco. Other major manufacturers say they are expecting an MDO any day now.
TPB stated that its PMTA included an in-depth toxicological review, a clinical study, and studies on patterns and likelihood of use. The data demonstrated that TPB products “do not appeal to never users, youth, or former users and that a significant majority of users of TPB products had completely ceased use of combustible cigarettes. The scientific literature on lower-risk nicotine delivery systems shows that these products can significantly improve public health by providing alternatives that are much less harmful than combustible cigarettes.”
TPB’s press release stated that the company believed it had established that the products’ it had continued marketing would be “appropriate for the protection of public health,” the standard established by the Family Smoking Prevention and Tobacco Control Act of 2009. “These products are crucial to improving public health by helping adult smokers migrate to less harmful products,” the statement reads. “TPB will continue to engage with the FDA and other stakeholders as we consider options moving forward, including a formal appeal of the decision and potential legal relief.”
Many companies say they are readying lawsuits. TPB’s states that it continues to monitor regulatory developments and intends to take appropriate measures to manage and mitigate any risk exposure that may result from these and any future MDOs. “The FDA’s scorched earth policy towards the vaping industry will move on to the courts,” a source told Vapor Voice this morning. “This has become a political process instead of a scientific one and the FDA is only trying to save face.”
Some companies, such as Bidi Vapor, stated they will continue to sell products even after receiving an MDO. Many other companies state that they will be switching to synthetic nicotine, an area where the FDA’s authority may be limited or even not exist.
Bidi believes its particular decision to be a mistake on the FDA’s part, and is currently exploring next steps to address the situation, according to Filter.
“It looks like FDA is making a mistake in many, many cases,” said Azim Chowdhury, a partner at the law firm Keller and Heckman, where he advises Bidi and other clients on nicotine regulations. “I have a number of companies that have received MDOs, but those MDOs are also identifying their menthol products. It seems like FDA, in their rush to get all these out, they’re not doing a very thorough job.”
Bantam Vape announced that its e-liquid products are now available for purchase through Avail Vapor’s specialized brick-and-mortar locations, as well as on its e-commerce website, www.availvapor.com. Avail will offer a wide selection of Bantam’s products including Sour Strawberry and Kiwi Berry, according to a press release.
“Bantam is known for our artisanal flavors that are built from scratch using only high-quality ingredients, as well as our commitment to compliance and transparency,” said Bantam director of sales Michelle Gottlich. “Joining with an established leader in the vaping category like Avail poses an exciting opportunity as we continue to expand our retail and online presence; and most importantly, gives our consumers greater access to our products.”
All of Bantam’s flavors are backed by science, manufactured in certified clean rooms and undergo rigid testing and analysis, “resulting in smooth, clean-tasting e-liquids, making Bantam Vape your coil’s best friend,” the release states. Additionally, the brand’s premarket tobacco product application (PMTA) submission to the U.S. Food and Drug Administration (FDA) is queued for formal scientific review.
“We recognize that Bantam, like Avail, is dedicated to providing consumers with products that echo our principals of exceptional quality and flavors,” said Justin Murphy, Avail’s vice president of retail operations and marketing. “We are excited to stock the variety of flavors, nicotine level options and reliable quality of merchandise that the Bantam brand offers.”
Kaival Brands has three new distribution partners for its Bidi Vapor products: Smoker Friendly International, Avail Vapor and Hilmes Distributing. These three additional distributors push the potential U.S. store count for Bidi Vapor products above 46,000, up from 10,000 in 2020.
According to Bidi Vapor, distributor interest in its products has increased greatly following its receipt of a premarket tobacco product application filing letter from the Food and Drug Administration. As the company’s product moves into the substantive review phase, Bidi Vapor anticipates it will continue to update investors on additional new distribution agreements.
“These new partners will become a large new revenue stream for Bidi and Kaival,” said Niraj Patel, CEO of Kaival Brands, in a statement. “It is important to note our 2020 sales of just under $100 million were achieved with a distribution network of 10,000 stores and in less than 10 months of operation.
“Today’s new distribution partner announcements bring our network to over 46,000 store locations. The strength and breadth of these partnerships fuels our confidence in our ability to meet or exceed our 2021 projection of $400 [million] to 450 million in sales.”
Fresh Farms E-Liquid has confirmed it submitted a premarket tobacco product application (PMTA) on Sept. 6 to the U.S. Food and Drug Administartion (FDA)
Working with key scientific partners to ensure the highest standards of analysis as well as the world-class legal team at Keller and Heckman, Fresh Farms fully expects its submission to be accepted and move on to the substantive scientific review phase with the FDA, a press release states.
“The Fresh Farms submission encompasses dozens of products as it seeks FDA approval to continue offering its extensive portfolio, which company leaders believe is perfectly suited to the needs of adults looking for alternatives to traditional, combustible tobacco products,” the release states. During the PMTA review, the FDA will evaluate whether there is sufficient scientific data demonstrating a net-positive public health result by allowing the product submissions to be sold as alternative options to traditional tobacco products.
“From day one, we have sought to be the best,” said Fresh Farms CEO and co-Founder Tony Devincentis. “From our branding, our messaging, our team and the quality of our products – our commitment to the PMTA process has been no exception. We have spent years and countless hours evaluating our products, preparing for this moment, and the preliminary results have been phenomenal. Ultimately, our goal is to receive a marketing granted order from the FDA and begin postmarket reporting to them immediately. We plan on being a leader in our industry for years to come.”
In addition to rigorous adherence to FDA regulations and filing PMTAs, Southern California-basedFresh Farms E-Liquid has proactively led the way for safer packaging with additional warning labels, launching a “No2Minors” campaign to build additional awareness and reduce underage sales to minors. Avail Vapor partnered with Fresh Farms E-liquids, the parent company of Fruitia, in July.
“We could not be more pleased that Fresh Farms submitted PMTAs for their highly sought-after e-liquid products,” said James Xu, chairman of AVAIL. “Our customers truly love the Fruitia brand, and we look forward to continuing our shared missions by providing adult smokers with high-quality alternatives to deadly cigarettes.”
As of September 9, only those products submitted to the FDA according to their PMTA guidelines will be permitted to remain on the market in the United States.
Blackbriar Regulatory Services (BRS), a firm specializing in helping small to mid-sized domestic and international companies navigate the regulatory landscape to bring their FDA regulated product concepts to market, is expanding.
The company announced today that it is growing its facility and services to meet increasing client demand. Immediate expansion efforts include adding cleanroom manufacturing space, increasing its analytical capabilities and expanding regulatory service offerings.
“With the [U.S. Food and Drug Administration’s (FDA) premarket tobacco product application (PMTA) deadline approaching within weeks for existing nicotine-based vaping products currently on the market, we are now seeing an increase in PMTA demand for new, innovative nicotine-based vaping products,” said Russ Rogers, CEO at BRS. “The FDA rightly worked with the industry to pause and take a look at the appropriateness of the products on the market, and those companies who understand how to make the highest-quality products are in a position to start working on applications for next generation technologies that should create dramatically improved user experiences and step-wise safety improvements.”
BRS was established to address challenges such as those that the PMTA process creates for manufacturers and brand holders. Its unique business model and capabilities provide numerous cost and speed advantages to clients who are looking for solutions to keep their products on the market in the United States, according to Rogers.
BRS is under contract to file more applications before the Sept. 9, 2020, deadline for several U.S. and international customers, and is now starting to prepare PMTA submissions for next generation nicotine-based vaping products for companies that are seeking to revitalize their product portfolio after the recent industry-wide focus on obtaining approval for legacy products.
Post Market Surveillance is an integral and mandatory commitment manufacturers must make to the FDA as part of their PMTA submission. BRS has also expanded its capabilities in this area to service clients both domestic and international to help them remain compliant in this regard, according to Rogers.
Avail Vapor announced today that it has received its first premarket tobacco product application (PMTA) acceptance letter from the U.S. Food and Drug Administration (FDA) for its e-liquid nicotine products. While the company would not say what flavors or how many flavors, it was confirmed that the mixed-berry flavored Mardi Gras was a submitted flavor.
Blackbriar Regulatory Services led the regulatory process for Avail’s submission. The application now moves to the substantive scientific review where the FDA will determine if Avail has scientifically proven that its nicotine vaping products are appropriate for the protection of public health.
This is one of numerous applications that Avail plans to file prior to the September 9, 2020 deadline which will provide a wide-ranging flavor portfolio to meet the needs of adults seeking alternative choices to combustible tobacco products, according to James Xu, chairman of Avail.
James Xu
“We started mapping out our regulatory framework and PMTAs in 2015, before nicotine vaping products became subject to the FDA’s tobacco authority,” said Xu. “We couldn’t be more pleased that the years of hard work, investment and dedication have gotten us to this point. Our end goal is to seek an FDA marketing order which would allow us to continue to keep our products on the market for those adult smokers looking for alternatives to traditional tobacco products.”
In order for nicotine vaping products to remain on the market after the FDA’s September 9, 2020 PMTA submission deadline, companies must submit a viable PMTA with the intent of seeking an FDA marketing order. A PMTA must provide scientific data that demonstrates a product is appropriate for the protection of public health.
Avail Vapor has partnered with Fresh Farms E-liquids, the parent company of Fruitia, a premier e-liquid company based in southern California. The long-term partnership adds a fruit flavored e-liquid line to the products Avail carries in the 12 states its stores are located.
The offering includes five island-themed flavors: Strawberry Coconut Refresher, Pineapple Citrus Twist, Blood Orange Cactus Cooler, Apple Kiwi Crush and Passion Guava Punch.
“Listening to our customers’ needs and their request for additional fruit flavored e-liquids, we couldn’t be more excited to partner with Fresh Farms to offer these additional product offerings,” said Justin Murphy, vice president of Retail and Marketing Operations at Avail. “Partnering with companies that share our same vision of offering high-quality products is paramount to our success.”
Fruitia products offered by Avail include 60-milliliter, nicotine-based e-liquids bottles and disposable cartridge-based systems.
“Having the ability to further expand our premium, West Coast products across the U.S. made the Avail partnership a natural choice,” said Tony Devincentis, CEO of Fresh Farms E-liquids. “We pride ourselves in sourcing only the highest-grade ingredients using the highest standards of manufacturing.”
Avail Vapor and its subsidiaries are returning to near-normal operations, but several challenges remain.
By Timothy S. Donahue
The challenges in the vapor industry are many. Anti-vaping rhetoric is at an all-time high. After an outbreak of lung disease wrongfully blamed on electronic nicotine-delivery systems (ENDS) coupled by the Covid-19 pandemic, the U.S. Food and Drug Administration (FDA) still wants its premarket tobacco product applications (PMTAs) submitted by Sept. 9, 2020. While the 90-day reprieve was welcomed, at least one industry expert says the industry will struggle to meet the deadline.
James Xu is the founder of Avail Vapor and chairman of two other businesses that recently grew out of Avail—Blackbriar Regulatory Service (BRS) and Blackship Technologies. Avail started out in 2014 as a retailer, and the company continues to concentrate on retail operation. Avail has 99 stores spread out in 12 different states from Detroit, Michigan, to Atlanta, Georgia. BRS centers around providing the FDA PMTA service, laboratory work and contract manufacturing mostly for the vapor industry, and Blackship Technologies provides research and development service for the next-generation vapor device.
With retail operations in several localities, Xu said that, as of March 14, only 49 Avail stores were still fully operating. In those environments, store employees have limited contact, practice social distancing, have less than 10 people in the store and follow all local rules relating to the pandemic. The stores have also implemented strict sanitizing protocols, according to Xu. “We have very detailed guidelines for our employees. And we were able to secure some of the [personal protective equipment] supply before everything ran out … I believe we are one of the very first few businesses that required all our employees to wear masks,” says Xu. “We also very, very early on stopped the sampling [of e-liquids] because that’s one of the areas we identified that could spread the disease … when a customer leaves, there will be a detailed cleaning procedure. And then every single hour, we’re going to do another deep clean.”
Avail has a combined 460 employees between its three entities with most concentrated in retail operations. During the TMA digital conference “Unsteady Ground: Shifting Landscapes” in May, Xu told attendees that he has been able to preserve most of his staff and has had limited layoffs. He also said that he believed vape shops should have been labeled as essential businesses in more communities.
“The safety of our employees is the number one concern. And the second one is our customer safety. We definitely try to put those things in the most important positions,” he said. “That’s how we evaluate whether to open stores or not to open stores [when local laws allow]. Questions and answers from the seminar have been edited for space.
Vapor Voice: How have sales been for the stores that are open; was there a huge uptick before the businesses closed?
James Xu: We are already at a half capacity right now. And for the business leading to the lockdown, yes, we did see an uptick with the business because everybody tried to [get] stocked up. And then, of course, with some of the store shutdowns, we definitely saw a major drop. But overall, I will say that the stores [that] remain open, it’s pretty consistent at the normal level right now.
What were your business goals for 2020 before the pandemic, and how have they changed?
Well, before the pandemic, of course, the number one biggest event for the industry is [the] PMTA … we were going to see what exactly [the] FDA is going to police to the industry to truly execute their vison after the PMTA. We do have a major expansion plan once the FDA’s PMTA [submission requirements] become clear. Right now, the PMTA date is delayed, but the focus hasn’t changed any. We’re still concentrating on submitting our PMTA before the deadline and then to see how everything works out.
How is the company going about gathering the required data? There are a lot of labs that are closed. I imagine that you have started to see complications.
Well, the delay on [the] PMTA is not surprising to anybody because most of the hardware to support the vapor industry is coming from China. And since [the] Chinese New Year, which is the end of January, and China was in a lockdown stage … that definitely complicated many of the abilities to have product shipped. And now with the U.S.-based lab and business in the lockdown stage, that definitely delayed everything. So, postponing the PMTA deadline to September, it’s not a surprise to any of us. And it definitely makes it more challenging because right now … we all know [the] PMTA deadline got shifted five or six times. And with all the shifting, we’re already working with a very, very tight deadline. Everything has to work perfectly to be on time. And now, even with China reopening, we are facing a lot of uncertainty here.
Are there other challenges related to the PMTA and the pandemic?
Well, mostly it’s the challenge in the lab, right? Lots of the labs shut down and also with the [slow shipping] back and forth, it becomes very, very challenging right now. So each CRO [contract research organization], it’s a unique case. It definitely makes a PMTA submission process very challenging to this point.
We know you are working with your own brand, Avail, as well as some other companies such as Charlie’s Chalk Dust. Is there enough time to be able to do these PMTAs? Do you think that the FDA is going to have to extend the deadline again?
We work with about 10 different companies to handle their PMTA work. We have a balanced approach between the cost versus the data … because [the] PMTA is very, very vague. How much material do you submit? We don’t have [an] unlimited budget like many of the other business, so luckily, at [BRS], we can still have the best combination for the cost and the scope of work. We do handle most of the very well-known brands, both from the manufacturing side to the hardware side and also the e-liquids.
Is [the] FDA going to extend it again? I don’t know. That totally depends on how this pandemic evolves. And at this point, everybody is kind of waiting to see. The bulk of the work is already completed. The added time will kind of give us a little bit more time to better review it. We absolutely can use the extra time that we got …. For us, we definitely are not going to wait for the September deadline. We are going to submit as soon as we are ready.
How close are you to being able to make a submission for one of the brands?
That depends. And again, that’s a moving target each day because, again, right now we’re working in a very unpredictable environment … each contractor is facing their unique challenges during this pandemic. So, for us to put all of those puzzle pieces together, it’s definitely challenging. The deadline is kind of like what we have to evaluate every day. But as soon as we are ready, again, we’re not going to wait until the last minute. We are going to submit very quickly.
When we talk about vapor products, we typically associate the idea that the PMTA is based on vapor products and their potential for harm reduction. How do you address this in stores with customers when you as the retailer or even the manufacturer cannot make any health claims?
Well, we are in a very tough spot because other people can make all kinds of claims against the industry, and many often could be false. But our hands are tied because we cannot make any health claims, right? Even if we endorse some customer’s testimony or refer to other studies, that also could be a gray area, right? So, it really put us—the whole industry—in a very compromised position.
What we usually tell our employees when customers come in is [to] try to use their personal experience instead of a statement [about] a company. That’s how we usually communicate. Then we will [also] point out all the resources available so the customer can get a balanced view [of] the pros and cons of vaping. It’s a very fine balance that we work. We wish the agency [the FDA] would just kind of like give us a clear guideline. I believe that the government, they have a huge role in this. Lots of misinformation was spread, especially during the vaping [lung disease] epidemic [from black market THC products]. A huge amount of damage was done to the industry.
A lot of people are under the impression right now that vaping is a lot more deadly than smoking. And that’s very dangerous. So, I believe the government has the responsibility to at least educate people where vaping is compared with cigarettes as a harm reduction product. For us, we face the customer every day. So, we should have more power to really be able to talk to a customer, and it needs to be scientifically based, but we need to be able to give the customer a balanced view.
James Xu
What are the conversion rates right now? Are most Avail customers smokers or former smokers?
Well, the rate continues to change, and right now, the conversion rate is still too low, and we calculate it to a little bit below 20 percent. This is because the product is still not user-friendly enough because … the vaping industry is still less than 10 years old … so there are a lot of those kinds of obstacles for people who [want to] stick with a vaping product. For example, taste. And leakage is another major issue.
There has been talk about supply chain disruptions and product not coming from China as quickly as it should. What’s going on with the Chinese vapor market?
We have constant contact with the Chinese manufacturers. Most of the U.S. distributors and the retailers bought about four weeks of supply to last the normal Chinese New Year [slowdown]. And then because China went into complete lockdown because of the coronavirus … [there was only] one month that most of the retailers or distributors didn’t prepare for. That caused a major disruption with the supply chain, but right now, everything in China is back to normal, but shipping still has issues.
Most of the hardware is being shipped from China, and when the commercial airlines stopped all their operations—commercial airlines account for about 45 percent of the cargo volume—half of that volume has disappeared. UPS and DHL, they just couldn’t catch up to ship the product fast enough. That’s the bottleneck we’re facing right now. The Chinese factories are at full capacity—they’re back to work—but they [do] have a major problem actually delivering the product into our hands right now.
Yes, it’s bad. But, if you allow an extra 10 days then you shouldn’t have that problem. So instead of counting on product leaving the factory to get to your store in about a week, right now, I would count on two weeks or a little bit more.
Considering this pandemic and what’s going on with the PMTAs alongside flavor bans and other types of regulation being enacted differently in different U.S. states and countries, where do you see the future of the vapor industry?
In five years, no matter what, you cannot dial back the clock. We’re going to see more people vaping instead of smoking. We’re going to see that the truth eventually will come out. More smokers are going to convert to vaping. There is a lot of misinformation out there … and that’s why I wake up each morning and go to work … because I believe in this industry.
The FDA’s enforcement will be key because if no enforcement happens, like the first round [of guidelines], it’s going to be the Wild West again. It’s actually going to put the industry in an even more compromised position than ever. The good players are going to get punished—the good players that play by the book and waste all the money on PMTAs but have zero benefits. That’s the worst-case scenario. If PMTA enforcement is too strict, that definitely is going to limit the competition.
How is [the] FDA going to balance all that, allow better, safer product come to market? They also need to make sure the integrity of the product is there to ensure the safety of the customer. It’s a fine balance. Long term? We absolutely believe in a bright future. But how is everything going to play out? We have to wait and see.
Kaival Brands has three new distribution partners for its Bidi Vapor products: Smoker Friendly International, Avail Vapor and Hilmes Distributing. These three additional distributors push the potential U.S. store count for Bidi Vapor products above 46,000, up from 10,000 in 2020.
