The Supreme Court of the United States has agreed to consider another case involving federal approval of vapes at the request of the Biden administration on Friday.
The case arose after the FDA denied R.J. Reynolds Vapor Company’s request to introduce three flavored vapes on the market. The FDA said the company failed to meet federal requirements concerning tobacco products’ marketing, but the company contends the decision was arbitrary and capricious.
Reynolds is based in North Carolina, and the federal appeals courts located there and in D.C. already had precedent on the books unfavorable to the manufacturer.
Under federal law, companies can challenge the U.S. Food and Drug Administration denying of a marketing order for a new tobacco product in Washington, D.C., or where the company’s principal place of business is located, reports The Hill.
The 5th U.S. Circuit Court of Appeals has been more sympathetic to the industry, making it an attractive place for companies to contest their products being denied.
The 5th Circuit’s rule effectively enables it to host any tobacco company’s challenge, so long as its lawsuit is joined by a convenience store or other retail seller within the 5th Circuit’s borders — which spans Louisiana, Mississippi and Texas.
The companies instead filed its challenge in the 5th Circuit alongside Avail Vapor Texas and the Mississippi Petroleum Marketers and Convenience Stores Association. The federal government attempted to move venues, but the 5th Circuit said the additional challengers meant the case was properly brought.
No matter which way the justices rule, they are not expected to address the merits of the FDA’s denial. The Supreme Court only took up the question of whether the 5th Circuit was a proper venue.
“There is no circuit conflict over the meaning of this venue provision. And other vehicle problems abound,” the company wrote in court filings urging the justices to turn away the appeal.
The U.S. Supreme Court agreed in July to hear the U.S. Food and Drug Administration’s defense of the agency’s rejection of two companies’ premarket tobacco product applications (PMTAs) to sell flavored vape products that it has determined pose health risks for young consumers.
The justices took up the FDA’s appeal filed after a lower court ruled that the agency had failed to follow proper legal procedures under federal law when it denied the applications to bring their nicotine-containing products to market.
Avail Vapor has asked the U.S. Supreme Court to examine a lower court’s refusal to review a marketing denial order issued by the Food and Drug Administration to Avail products.
In its petition, known as a Writ of Certiorari, 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.
What makes the FAV different is both its new wicking technology and its state-of-the-art microchip technology.
A new vaping product is slated to offer the cigarette-like flavor of combustibles with the ease of vaping.
By Timothy S. Donahue
It might be the most “wicked” thing to ever happen in the vapor industry. A new vaping device will enter the U.K. market this summer that brings together the taste and aroma of heat-not-burn products with the ease of use, mouthfeel and lowered risk offered by liquid-based vaping products. Developed by Avail Vapor founders James Xu and Donovan Phillips, the new FAV system hopes to be the ultimate transition device to trend combustible smokers toward less risky electronic nicotine-delivery system products.
Xu and Phillips co-founded FAV Tech Hong Kong Limited with a leading Chinese hardware manufacturer to launch this new hybrid product, the FAV. What makes the FAV different is both its new wicking technology and its state-of-the-art microchip technology. Xu said the wicking is the first of its kind in the industry to use real tobacco leaf in the wick to help produce the tobacco flavoring in the atomized vapor. Xu uses proprietary patented technology to “sandwich” a layer of tobacco particulate in the cotton wicking used to absorb the e-liquid into the coil. The liquid is then atomized, and the heat releases the natural tobacco’s essence into the vapor as flavoring.
National data shows that at least two-thirds of combustible smokers try to quit each year. During his time with Avail, Xu said that shopper survey data showed that of those two-thirds of users, only six percent converted completely to vapor. That left 94 percent that continue to use traditional tobacco cigarettes. There had to be a better way to transition combustible smokers.
“It’s a scary experience for them to quit smoking because it’s a habit they form over many years. Any reason that they [combustible smokers] could find not to switch, such as it’s too complicated to use, it leaks or the flavor’s not there … They walk away from it or any other less harmful product,” explains Xu. “From the early days, we could see that there were certain ‘boxes’ that had to be checked to convert smokers. A convenient form factor, ease of use, but the one thing that was the most important was flavor.”
This knowledge sent Xu and Phillips on their journey to develop the FAV. Heated-tobacco products offered the touch and feel of combustibles, but they were complicated to use, and many users rejected the flavor. E-cigarettes were easier to use, but none offered the combustible cigarette flavor profile that nearly mimicked traditional tobacco cigarettes. The industry often said that if such a device was ever marketed, it could be the missing piece to the puzzle of tobacco harm reduction.
The chip embedded in FAV pods will not allow the device to be used without being activated at the store from which it’s purchased.
“When the smoker is first attempting to quit, it needs to be a lateral move. Something that tastes like combustible cigarettes,” said Xu. “For the smoker, taste is very important.”
Xu said the lightbulb moment happened when he was in China exploring factories with representatives of a global leaf supplier that explained how recon tobacco was created and used. Also known as homogenized tobacco recon (RTL), it was developed in the 1950s to save valuable raw material by combining remnants of virgin tobacco during production. RTL is a paper-like sheet approaching the thickness of tobacco laminae.
“They explained how they make recon paper. And that’s when we began to wonder if we could use recon paper near the heating coil so it can release the aroma. We later started to research how we could incorporate pure leaf into the cotton wicking existing in e-cigarette coils,” Xu said. “We devoted the last 12 months to perfect the process. We use real tobacco particulate. We can make infinite combinations to mimic all the different cigarette blends by using different leaves. It’s an extremely difficult and unique process to blend tobacco with cotton. The tobacco is ‘sandwiched’ in between the cotton fiber.”
The heat from the coil then releases the tobacco aroma into the vapor produced by the e-liquid passing through the cotton wicking and heating coil. The tobacco never burns, it just “heats” to release the flavor in the leaf blend mixed into the wicking. Xu said the concept is simple. To make it work, however, is quite the process.
“This wasn’t something we could do ourselves. We needed the assistance of scientists to help us be able to identify what particle size and layering process would actually work,” Xu said. “This is a specialized, unique and proprietary process.”
Technical response
An exceptional quality of the FAV is that the e-liquid used in the device contains only 3 percent tobacco essence boosters. Typical disposable vaping products contain between 20 percent and 36 percent flavoring. Xu didn’t disclose what flavoring was used, only saying it had no added sugars and only “enhanced” the flavor produced by the tobacco in the FAV’s wicking. Xu said the added flavoring “mimics other aspects of a combustible cigarette’s flavoring.”
Xu said that another innovation offered by the FAV is its microchip enhancement technology developed over many years with their Chinese partner. The chip embedded in FAV pods will not allow the device to be used without being activated at the store from which it’s purchased. This prevents any use unless the seller verifies the purchaser is of legal age to consume tobacco products. Xu acknowledges that there is little a manufacturer can do if devices are purchased by an adult, then given to an underage user (straw purchase). The technical enhancements, however, are aimed at combating underage nicotine consumption.
“The device can’t be stolen from a store and then used. It also prevents counterfeit products from becoming available. Only legitimate FAV pods work with the FAV battery device. The cartridge (pod) comes in the factory setting but can be modified by the user. Some users may want the wattage a little higher to squeeze out that last little bit of e-liquid. They have that ability to do that but within certain limits,” Xu explains. “Because many app platforms don’t allow tobacco product apps, users will have to initially connect the device to their computer to alter any settings.”
The device can also program puff counts for users who may be using the device to wean themselves off nicotine entirely. Xu said that the first version of the FAV will have a very limited set of options for users. “It’s going to be very limited because we need regulatory approvals on some options. However, the sky is the limit with the chip,” he said. “But if you tell me you want to quit smoking or vaping, we can program that. Today, you can have 100 puffs, tomorrow, 99; the day after tomorrow, 98. Everything can be stored in the chip.”
The FAV device has also performed better on toxicology testing than other heated-tobacco products. Xu said the FAV is equal to if not better than typical e-liquids as well because of the lack of flavoring and sugars in the e-liquid. There is little introduction of tobacco-specific nitrosamines (TSNAs) (which comprise one of the most important groups of carcinogens in tobacco products) or harmful and potentially harmful constituents (HPHCs) that are chemicals or chemical compounds in tobacco products or tobacco smoke that cause or could cause harm to smokers or nonsmokers.
The device can also program puff counts for users who may be using the device to wean themselves off nicotine entirely.
“There are minute TSNAs or HPHCs present. FAV tests better than heat-not-burn by a significant amount and surpasses most vapor product testing because our cartridges/e-liquid use little flavoring. Additionally, the amount of tobacco equivalent to a pack of cigarettes is 12.4 grams for [an estimated] 300 puffs,” explained Xu. “We use 0.05 grams of tobacco in our wicking. It’s only a small fraction of real tobacco compared to a pack of cigarettes that’s needed to give that authentic taste.”
Xu said the FAV is expected to hit the European market this summer. The FAV is already TPD certified. The device has a 2 mL capacity with a 20 mg nicotine e-liquid mixed in a PG/VG base. It will come in three different tobacco flavors, and each flavor will have a menthol counterpart. Xu said he has submitted the FAV to Canadian authorities as well and expects to be able to enter that market sometime this year.
Concerning the world’s largest vaping market, Xu said he does want to submit a premarket tobacco product application (PMTA) to the U.S. Food and Drug Administration. He does, however, want to wait until the FDA gets the PMTA process in order and is clearer on what it expects from a vaping product to receive marketing approval. Xu said the FDA’s failure is costing the U.S. economy, limiting the technology of less risky tobacco products in the U.S. market and, most importantly, costing the lives of millions of smokers who want to quit but are unclear of the benefits of using less risky products.
“We identified the European market for our initial product launch. The FDA has this ludicrous regulatory environment. Initially, we were thinking about releasing FAV in the U.S. and manufacturing it in the U.S. This would have brought jobs and the first vaping hardware production to the Unites States,” said Xu. “We just couldn’t make it work because of the U.S. regulatory landscape. Because of the uncertainty with FDA regulation, we had no other choice but to choose production outside the U.S.”
There is one problem, however, that Xu hopes will never be solved: Focus group test panels seem to love the FAV. “The biggest problem we have right now is when we do a focus group test panel, and our testers are actual current combustible cigarette smokers, they don’t want to give me the FAV back,” he joked. “They just keep telling me, ‘This is exactly what we’ve being looking for.’ That’s a good problem; those individuals smoking combustible cigarettes don’t want to give it back. Maybe this is the unicorn device that makes the transition to less risky products easier.”
A unanimous panel of the United States Court of Appeals for the Fourth Circuit on Monday denied Avail Vapor’s petition to have its marketing denial order (MDO) issued by the U.S. Food and Drug Administration for its e-liquid products invalidated.
Circuit Judge J. Harvie Wilkinson wrote Monday that Avail “encourages us to neglect the forest for the trees” by focusing on procedural objections rather than the FDA’s mandate to protect public health. Wilkinson was joined by Circuit Judges Diana Gribbon Motz and Albert Diaz.
The court rejected all of Avail’s arguments, including that the FDA’s review of its premarket tobacco product applications (PMTAs) was arbitrary and capricious, according to a copy of the ruling obtained by Vapor Voice.
“We see no merit in Avail’s remaining arguments that FDA acted arbitrarily and capriciously in reviewing petitioners’ PMTAs,” the decision states. “FDA could not allow young adults to perceive e-cigarettes as another Baby Ruth or Milky Way, only to find themselves in the grip of a surreptitious nicotine addiction. This was hardly arbitrary.”
Avail’s chief complaint is that the FDA arbitrarily imposed a new “comparative efficacy” standard, which asked applicants to demonstrate through certain long-term studies that their fruit and dessert-flavored products better promote smoking cessation than tobacco-flavored products.
This standard, Avail complains, was adopted with no explanation to applicants and without consideration of their reliance interests. Avail also raises a substantive objection, arguing that FDA’s imposition of this comparative efficacy standard exceeded its statutory authority under the TCA.
“First, Avail attempts to tie the hands of the FDA to certain forms of evidence and kinds of studies in what is a rapidly evolving field. Second, in focusing upon procedural points, Avail encourages us to neglect the forest for the trees,” the decision states. “Avail essentially argues that “the FDA’s willingness to consider some forms of evidence, explicitly phrased as such, required the FDA to accept that evidence as meeting a statutory requirement even where the FDA found the evidence unsatisfactory.”
According to the decision, Avail also filed its marketing plan with its PMTAs, which outlined measures designed to prevent underage use. Such measures consisted of naming its flavored e-liquids with “non-descriptive and non-characterizing names” that do not identify the product flavor to prevent appealing to youth.
“The agency denied Avail’s application for its flavored electronic cigarettes, chiefly on the grounds that its products posed a serious risk to youth without enough offsetting benefits to adults,” the decision states. “We now uphold that decision and deny Avail’s petition for review.”
The judge also specifically stated that he did not agree with the U.S. Court of Appeals for the Eleventh Circuit’s decision to stay the MDO issued by the FDA to Bidi Vapor. Persons with knowledge of the Avail suit said that it was a good case to petition for certiorari, a review of the lower court’s decision, to the United States Supreme Court.
Avail Vapor has sold the majority of its retail locations and closed its remaining stores. The company has also sold or closed its ancillary businesses. James Xu, founder of Avail, said the decision was motivated by multiple factors over several years, including what he called unclear and convoluted federal regulatory processes.
Credit: Avail
At one time, Avail Vapor was the largest family-owned vapor retailer in the U.S. with more than 100 stores in a dozen states. In January of 2020, the company split into regulatory compliance and consulting business, and a major wholesale distribution company. Those businesses have also been sold or closed.
Xu said the U.S. Food and Drug Administration’s premarket tobacco product application (PMTA) pathway was a major factor in the decision after the agency arbitrarily changed the requirements to get a PMTA approved. “It’s completely just a mess with FDA policy making and policy strategy. It just did not make any sense from day one,” Xu said. “Everything is really in this gray area. It was totally different from what our mission was and COVID is not helping any retailer.”
Xu said Avail spent more than $10 million in its bid to get regulatory approval since 2016, when the FDA set forth new compliance standards for vaping products. But the FDA rejected Avail’s applications in September and the company sued the government agency in federal appeals court. However, the FDA then stayed enforcement of the MDO on Nov. 1, pending an administrative appeal.
The economic impacts of COVID-19 also created challenges for the company, which began downsizing in August when it sold an estimated 30 of its stores to North Carolina-based competitor AMV Holdings, parent to Kure and Madvapes. It then shuttered or sold its remaining 20 stores, including five in the same city as the company’s headquarters, Richmond, Virginia, Xu said in an interview with Richmond Biz Sense.
Avail was an early entry into the vapor market, opening its first stores in 2013. By 2015, the company was producing its own e-liquids in its 37,000-square-foot office and manufacturing facility. It soon began also producing e-liquids for several other major brands. Xu said that he is not leaving the vapor industry and an announcement concerning a new project would be announced soon.
A new line of marijuana growing kits for home use has been launched by Avail Vapor, one of the largest vaping companies in the world. Avail’s cannabis kits started to be sold in 18 of its Virginia-based stores under the Avail Grow brand on July 1, according to Maggie Gowen, Avail’s senior director of marketing and communications. Avail’s marijuana growing supplies will be available only in-store and not online.
Credit: Avail Grow
The growing kits feature soil, nutrients, lamps and other equipment needed to grow marijuana in Virginia, where marijuana became legal on July 1. The kits do not offer seeds, however. The sale of marijuana seeds and plants are illegal in Virginia. Residents over the age of 21 in Virginia are allowed to have up to four marijuana plants per household.
Priced at $130, the Starter Kit is intended to be used from germination through the seedling phase. Two additional kits are being offered by Avail Grow for $600 and $800 that will bring the plants to the harvesting stage. The larger kits also offer tenting and a filtration system.
Avail Grow is the vapor manufacturers second foray into the cannabis market. Avail launched its Leafana Wellness line of cannabidiol (CBD) products in 2019. Early last year, Avail Vapor split into three separate entities: Avail Vapor LLC (retail), Blackbriar Regulatory Services (contract manufacturing, laboratory services and FDA compliance consulting) and Blackship Technologies LLC (research and development).
