Tag: news

Kaival Brands Poised for Growth With Bidi Stick

Photos: Kaival Brands Innovations Group
After the win of its merits case against the FDA, Kaival Brands and Bidi Vapor are back on track.
By Stefanie Rossel
The year 2022 has been both challenging and exciting for Kaival Brands Innovations Group. The Melbourne, Florida, USA-based company is the exclusive distributor of products manufactured by Bidi Vapor, which is best known for its Bidi Stick vape pen, a disposable electronic nicotine-delivery system (ENDS).
In September 2021, Bidi Vapor received a marketing denial order (MDO) from the U.S. Food and Drug Administration for its nontobacco-flavored Bidi Sticks. The company had submitted premarket tobacco product applications (PMTAs) for the product’s nine flavor varieties plus a tobacco and a menthol variant.
In response to Bidi Vapor’s petition for review, the FDA stayed the MDO until December 2021, after which the order was again stayed by the 11th Circuit Court of Appeals. On Aug. 23, 2022, Bidi Vapor won its merits case against the FDA. Granting Bidi Vapor’s petition for review, the 11th Circuit ruled that the MDO was “arbitrary and capricious,” primarily because the FDA failed to consider the relevant marketing and sales access restriction plans included in Bidi Vapor’s PMTAs.
Eric Mosser
At the time of writing, the FDA had yet to announce how it would move forward following the 11th Circuit’s decision. “FDA could seek to appeal the decision by requesting ‘en banc’ review, or a review by the entire 11th Circuit,” explains Eric Mosser, president and chief operating officer of Kaival Brands Innovations Group. “Or they might even try to petition the Supreme Court to review the decision. Regardless, we anticipate being able to continue selling and marketing our flavored products for the duration of any potential appeal, subject to FDA enforcement discretion. It is also possible FDA will simply follow the court’s instructions and review Bidi’s nontobacco PMTAs instead of trying to appeal.”
Flavors, insists Mosser, are a critical matter of public health, and Kaival is adamantly opposed to illegal underage use of tobacco and vape products. “The company has focused on limiting access via contracts with partners prioritizing retailers’ age verification policies, secret shopper audits, repackaging devices to better align with FDA guidance, no use of social media or influencers and no consumer-facing advertising,” he says. “The company even discontinued its online direct sales to consumers—while we had state-of-the-art verification practices, company leaders realized online access was a way that underage youth in general were gaining access to vaping products and decided to eliminate that potential for the Bidi Sticks.”
According to the most recent National Youth Tobacco Survey, Bidi Vapor was not among the top brands that appeal to youth. In 2021, among students who currently used e-cigarettes, Puff Bar was the most commonly reported usual brand (26.8 percent) followed by Vuse (10.5 percent), Smok (8.6 percent), Juul (6.8 percent) and Suorin (2.1 percent).

Niraj Patel
Victory for Vaping
The 11th Circuit’s decision is a victory not just for Bidi Vapor and Kaival Brands but for the entire vaping and tobacco harm reduction industry, according to Mosser—especially for those companies who have been rigorously following the FDA guidelines in their attempts to obtain market authorization. “We at Kaival Brands have done so on the belief that the FDA will follow the science and allow solid evidence to guide their decisions. If that is the case, then the company is on solid ground, and we are hopeful FDA will ultimately agree that our products, including our nontobacco flavored products, are appropriate for the protection of the public health.”
The PMTA for the company’s tobacco-flavored Classic Bidi Stick is currently undergoing Phase III scientific review. There is no timeline for this process, says Niraj Patel, chief science and regulatory officer for Kaival Brands Innovations Group and president and CEO of Bidi Vapor. The Arctic Bidi Stick, which Bidi Vapor maintains is a menthol product, was characterized as a flavored product by the FDA and subjected to the MDO that was vacated. “Barring an appeal, we anticipate that FDA will soon begin the scientific review of the Arctic Bidi Stick PMTA along with our other nontobacco-flavored products,” says Patel.
Patel founded both companies. With a wholesale distribution network of more than 54,000 stores across the United States, Kaival Brands helped Bidi Sticks, which entered the market prior to 2016 under a different brand name and with limited success, to become the fastest-growing and now No. 1 disposable vape brand in the U.S. market. Despite the MDO, the Bidi Stick is still the bestselling disposable ENDS product based on retail sales for the 52-week period ending on Aug. 27, 2022, Nielsen data shows, according to the companies.
Kaival Brands, which commenced business operations in March 2020, generated a cumulative $100 million in revenues in less than a year. In July 2021, Kaival Brands’ stock began trading on the Nasdaq. In April 2022, the company announced the expansion of additional wholesale and retail accounts, a move expected to increase the reach of Bidi Sticks by about 28,000 stores and to make up for the losses the company experienced in the wake of the MDO.
Difficult Times
In fiscal year 2021, which Patel described as “very challenging,” Kaival Brands reported a net loss of $9 million compared to net income of approximately $3.8 million for fiscal year 2020. In a press release, Patel said the MDO had caused “irreparable harm to both Bidi Vapor and Kaival Brands.”
The greatest revenue loss occurred in the last two quarters of fiscal year 2021, between the lifting of the FDA’s administrative stay and the ordering of the judicial stay, when the company was unable to market its Bidi Sticks. Revenues for fiscal year 2021 were approximately $58.8 million compared to $64.3 million in the prior fiscal year. Kaival Brands’ revenues decreased by approximately $15.7 million in the second quarter of fiscal year 2022 compared to the same period of fiscal year 2021, but revenues rose 11 percent compared with the first quarter of 2022, suggesting further recovery.
The 2021 year also presented challenges to Kaival Brands’ attempted foray into the modern oral nicotine market, a category that is still a niche but that has recently grown dramatically. The global nicotine pouches market size was valued at $1.5 billion in 2021. Grand View Research expects it to increase at a compound annual growth rate (CAGR) of 35.7 percent from 2022 to 2030.
Bidi Vapor had planned to introduce its Bidi Pouch in February 2021, but due to the Covid-19 pandemic, the launch had to be postponed. In September 2021, the company said in a press release that the launch would be further delayed while the company reformulated the product to utilize tobacco-derived nicotine and sought FDA marketing authorization. The company had originally envisioned the pouch to contain synthetic nicotine but pivoted following concerns about the legality of nontobacco-derived nicotine.
Congress subsequently changed the definition of a “tobacco product” to include synthetic nicotine products, with the FDA requiring manufacturers of nontobacco nicotine products to submit PMTAs by May 14, 2022. As of July 13, 2022, any new synthetic nicotine product that has not received premarket authorization from the FDA cannot be legally marketed. “We did not launch our nicotine pouch product,” Patel says. “Due to concerns with synthetic nicotine, we decided to focus on tobacco-derived nicotine and will launch in the U.S. only after we obtain FDA PMTA marketing authorization.”
Cooperating with PMI
In June 2022, Patel handed over the management of Kaival Brands to Eric Mosser. The leadership change had always been a part of the plan, according to Mosser. “I was preparing for the leadership role, which was set to occur as soon as plans for international expansion solidified. International distribution came sooner than later once Philip Morris International decided to license technology from Bidi Vapor and now also has distribution rights in certain markets outside the United States.”
Two weeks earlier, Kaival Brands’ newly created wholly owned subsidiary, Kaival Brands International, had entered into a licensing agreement with Philip Morris Products (PMP), a wholly owned affiliate of PMI. The agreement grants to PMP a license of certain intellectual property rights relating to Bidi Vapor’s premium ENDS device, the Bidi Stick, as well as potentially newly developed devices to permit PMP to manufacture, promote, sell and distribute such ENDS devices and newly developed devices in international markets outside of the U.S. Patel called the agreement a major milestone in Kaival Brands’ efforts to expand the global sales and distribution of the Bidi Stick.
Kaival Brands, in turn, announced the launch of Veeba, PMI’s first disposable e-cigarette utilizing Bidi Vapor’s intellectual property, in Canada in late July. PMI’s new product is now the lowest-priced disposable vape on the Canadian market. Mosser says he anticipates revenues through royalties paid by PMP, pursuant to the licensing agreement, in the fourth fiscal quarter. “I see Kaival Brands reclaiming its previous revenue growth trajectory and expanding into additional market segments with new innovative products that we exclusively distribute or own, not only here in the U.S. but also in profitable global markets.”
Disposable e-cigarettes are a growth market. According to report from Future Market Insights, the global disposable e-cigarette market size is expected to be valued at $6.34 billion in 2022. The overall demand for disposable e-cigarettes is projected to grow at a CAGR of 11.2 percent between 2022 and 2032, totaling around $ 18.32 billion by 2032.
Stefanie Rossel is Tobacco Reporter’s editorial contributor. An experienced trade journalist, she combines sharp reporting skills with in-depth knowledge of the tobacco and vapor industries. Prior to joining Tobacco Reporter, Stefanie was editor-in-chief at Tobacco Journal International, where she worked for a decade. Fluent in English, German and French, Stefanie covers tobacco news around the world. She is based in Germany.

October 27, 2022
Swiss Government Proposes new E-Cigarette Taxes

Photo: Comugnero Silvana
The Swiss government has proposed new taxes for electronic cigarettes, reports SWI.
Under the plan, reusable cigarettes would be subject to a levy of CHF0.20 ($0.20) per milliliter of liquid and disposable e-cigarettes would attract a tax of CHF1 per milliliter of liquid regardless of the nicotine content.
The higher tax rate for single use e-cigarettes is intended to deter underage consumption.
The proposal is forecast to bring in around CHF13.8 million in extra tax revenues per year.
Earlier this year, voters supported a ballot to limit advertising for all tobacco products that may be seen by young people.
October 27, 2022
Turning Point Brands Reports Quarterly Results

Photo: crizzystudio
Turning Point Brands (TPB) reported net sales of $107.8 million for the third quarter ended Sept. 30, 2022, down 1.9 percent.
Net sales for Zig-Zag and Stoker’s products increased 23.3 percent and 10 percent, respectively, while net sales for new generation products declined by 40.3 percent. Gross profit decreased 2.9 percent to $52.7 million and net income decreased 14.3 percent to $11.5 million
“Zig-Zag and Stoker’s segments demonstrated strong double-digit growth during the quarter despite a challenging economic backdrop with inflationary pressures continuing to impact consumers,” said TPB President and CEO Graham Purdy in a statement.
“Zig-Zag benefitted from solid growth in the U.S. papers and Canadian businesses during the quarter and the successful launch of CLIPPER lighters.
Meanwhile, Stoker’s MST experienced continued share gains driven by consumer trade-down to the value category. NewGen sales decreased slightly compared to the previous quarter and the segment remained profitable as we monitor ongoing regulatory developments
“We continued to return capital to our shareholders during the quarter while maintaining a strong cash balance that provides us with the ability to navigate the current financing environment. While our competitive position remains strong and we outperformed our markets during the quarter, it is prudent to adjust our outlook for the year in light of the current economic environment.”
October 27, 2022
FDA Denies First Menthol-Flavor PMTAs After Review

The U.S. Food and Drug Administration has issued marketing denial orders (MDOs) for several menthol-flavored vaping products marketed by Logic Technology Development. The products include the Logic Pro Menthol e-Liquid Package and Logic Power Menthol e-Liquid Package. It’s the first time the FDA has issued MDOs for menthol products after receiving a scientific review.
The move seems inline with the regulatory agency’s goal to ban menthol flavors from tobacco products. The FDA also isn’t expected to approve any flavored vaping product other than tobacco. In June, the National Institutes of Health and the FDA gave the University of Louisville a $3.6 million grant to study the effects of flavorings like mango and bubblegum used in vaping products. The study is still being conducted.
“Ensuring new tobacco products undergo premarket evaluation is a critical part of the FDA’s work to reduce tobacco-related disease and death,” said Brian King, director of the FDA’s Center for Tobacco Products (CTP), in a release. “We remain committed to evaluating new tobacco products based on a public health standard that considers the risks and benefits of the tobacco product to the population as a whole.”
Gregory Conley, director of legislative and external affairs for the American Vapor Manufacturers Association, told Vapor Voice the latest move by the FDA to ban menthol vaping flavors is reminiscent of the agency’s “fatal flaw” review of PMTAs that resulted in millions of denials. The term “fatal flaw” was used by the FDA for PMTA submissions that didn’t have specific studies. The term has been at the center of nearly all lawsuits filed against the FDA for its handling of the PMTA process.
“The dysfunction at the FDA knows no bounds. For the last year-plus, the FDA has sat back deferred decision making on menthol vaping products,” Conley said. “Lest anyone believe that FDA was hard at work coming up with ways to achieve balance, today they revealed that their big plan for menthol vaping products is to follow the exact same ‘fatal flaw’ review process that has led to dozens of lawsuits being filed against the agency.”
The agency stated that after reviewing the company’s premarket tobacco product applications (PMTAs), the FDA determined that the applications “lacked sufficient evidence to demonstrate that permitting the marketing of the products would be appropriate for the protection of the public health (APPH), the applicable standard legally required by the 2009 Family Smoking Prevention and Tobacco Control Act.”
The FDA stated that the evidence provided within Logic’s denied PMTAs did not demonstrate that menthol-flavored e-cigarettes are more effective in promoting “complete switching or significant cigarette use reduction” relative to tobacco-flavored e-cigarettes.
The announcement is concerning, especially since CTP is undergoing an external review in which many industry stakeholders have called for a comprehensive plan for PMTA reviews, according to Tony Abboud, executive director of the Vapor Technology Association. He says that the FDA’s action raises at least four major concerns.
“First, the announced rationale makes no mention of the net public health benefit prong, begging the question of whether FDA addressed that required element of the APPH test? Second, how is the public health benefitted by FDA’s approval of 123 new menthol cigarette/cigar products, given its inability to authorize a single less-harmful menthol vaping product?” Abboud asks. “Third, how can the Agency continue to rely on general (i.e., non-Logic specific) menthol youth data to impose a heightened Logic-specific cessation standard, especially given the dramatically reduced [National Youth Tobacco Survey] NYTS youth use rates and no apparent tie to Logic products?
“Fourth, is the Agency undermining its proposed menthol cigarette rule, given that FDA’s science shows that half of the predicted quitters under the proposed standard must switch to menthol vapes, none of which have been authorized?”
Logic must now decide if it will resubmit applications or submit new applications to address the deficiencies for the products that are subject to these MDOs. However, the FDA states that for non-tobacco-flavored e-cigarettes, including menthol-flavored e-cigarettes, “existing evidence demonstrates a known and substantial risk” with regard to youth appeal, uptake and use.
“The FDA conducts a rigorous, scientific review of submitted premarket tobacco product applications, evaluating the data for each product to determine if it meets the public health standard,” said King. “In this case, the applicant did not provide sufficient scientific evidence to show that the potential benefit to adult smokers outweighs the risks to youth.”
A recently accepted manuscript of an article set for publication in Nicotine & Tobacco Research found that flavored vaping and other tobacco sales restrictions in California did not affect youth e-cigarette use.
The MDO letter that Logic received today is not limited to the two products named above, according to the agency. In general, the FDA publicly names only products that the applicant is marketing to avoid potential disclosure of confidential commercial information.
Any products subject to an MDO may not be offered for sale or distributed in the United States, or the FDA may take enforcement action. These products cannot be legally introduced into interstate commerce in the U.S. without risking FDA enforcement. In March, the FDA authorized several tobacco-flavored e-cigarette products from the company under the Logic Vapeleaf, Logic Power and Logic Pro brands, including devices.
In addition to ensuring that Logic complies with this order, the FDA intends to ensure compliance by distributors and retailers. Specifically, the FDA notes that all new tobacco products on the market without the “statutorily required premarket authorization” are marketed unlawfully and their distribution or sale is subject to enforcement action.
Recently, the U.S. Department of Justice filed complaints for permanent injunctions in federal district courts against six e-cigarette manufacturers on behalf of the FDA. The cases represent the first time the FDA has initiated injunction proceedings to enforce the Federal Food, Drug, and Cosmetic (FD&C) Act’s premarket review requirements for new tobacco products.
Retailers should contact Logic with any questions about products in their inventory.
October 26, 2022
China to Start Consumption Tax Nov. 1 for Vapes

Credit: Peangdao
China’s Ministry of Finance will impose a consumption tax on e-cigarettes sold in China from Nov. 1, according to a notice published on Tuesday.
The taxation policy will further entrench China’s once-scattered e-cigarette industry into the country’s state-backed tobacco monopoly, a major generator of tax revenue for the country, according to Reuters.
According to the Ministry of Finance, a tax rate of 36 percent will be placed on the production or import of e-cigarettes, while an 11 percent tax will be placed on the wholesale distribution of e-cigarettes.
Experts said that the annual sales revenue of domestic e-cigarette makers is about RMB20 billion ($27.36 billion), so the tax may contribute an additional RMB10 billion to the government’s annual revenue, according to The Global Times.
China has long been the world’s largest producer of e-cigarettes, though consumption lags behind that of Western countries.
October 25, 2022
Mexico Invents Aerosol Test for Vapes ‘Since None Exist’

Credit: Niyazz
A health regulatory body for Mexico’s government says its scientists have developed a new methodology to analyze the aerosols in electronic nicotine-delivery systems (ENDS) because “no one else has come up with one.” The sale of ENDS products was banned in Mexico in June.
Final results of a new analysis of ENDS products using the new method will be published in scientific journals in the coming months, according to Cofepris chief Alejandro Svarch, who added that the “pioneering methodology” developed in Mexico will be of interest to health authorities in other countries.
Aerosol testing has been performed on vaping products since at least 2014 in other countries, such as the U.S. and the UK. Svarch offered no explanation on how Mexico’s new testing method is performed or why it is effective or why other methods were not effective, only that a testing method “did not exist.” There was no mention of what products were tested or at what temperatures.
He said an analysis using the exclusive method by health regulator Cofepris detected “30 undisclosed substances in aerosols inhaled” via ENDS products.
Linalool, which can be used as an insecticide, was one of the substances detected, Svarch said during Mexican President López Obrador’s press conference last week.
“This in itself is an enormous deception of consumers, who trust that the product is less harmful than a conventional cigarette, because it [supposedly] only has flavorings and nicotine, when in fact, it has other kinds of substances or ingredients that are highly dangerous for humans,” Svarch said.
Among the “hidden” ingredients that “producers of vaping devices don’t want us to know about,” he said, are dimethyl ether, benzyl alcohol, ethyl propionate, isoamyl acetate, butyl acetate and methyl cinnamate.
Svarch also presented a song commissioned by Cofepris (song starts at 1:40) that warns of the risks of vaping and advises ENDS users to “give up now.”
Among the cautionary tales offered via the song’s lyrics are the cases of a woman who lost three teeth due to vaping and a handsome man who became known as “burnt face” because his “beloved vape” exploded while he was using it, according to media reports.
October 25, 2022
Juul Labs Talking Bailout With Long-Term Investors
Juul Labs is discussing a bailout with two long-term investors to help stave off bankruptcy, reports The Wall Street Journal, citing unnamed sources.
Hyatt Hotels heir Nick Pritzker and California investor Riaz Valani are reportedly considering putting up money to cover the vaping company’s operations and near-term legal liabilities. Valani and Pritzker were Juul’s largest shareholders before Altria Group in 2018 bought a 35 percent stake in the company for $12.8 billion, according to The Wall Street Journal sources.
The goal of the bailout would be to help Juul stay in business and pursue a dispute with federal regulators over whether Juul products can remain on the U.S. market. Once the undisputed leader in the domestic vaping market, Juul Labs has struggled in the face of regulatory scrutiny and legal challenges over its marketing practices.
On June 23, 2022, the Food and Drug Administration rejected Juul Labs’ premarket tobacco product application and ordered the company to remove its products from the market. Juul appealed and on July 5, the FDA stayed its marketing denial order (MDO), announcing that it would review the decision after determining “there are scientific issues unique to this application that warrant additional review.”
On Oct. 21, Juul Labs published the details of its MDO appeal.
The uncertainty around the FDA ban has made it difficult for Juul to secure financing for legal settlements. Juul has been searching for an alternative that could avoid a bankruptcy filing. Earlier this month, Juul began discussions with lenders for financing that would carry the company through a potential Chapter 11 filing.
In a statement to The Wall Street Journal, Juul said it continues to explore several strategic options to secure its business and address the impact of the FDA’s stayed order “as we fight to preserve our mission of transitioning adult smokers away from cigarettes while combating underage use.”
October 25, 2022
RELX Again Warning Consumers of Fake Goods

RELX is again warning consumers in the Philippines against buying counterfeit e-cigarettes that are being offered in markets. The use of fake vaping products may result to serious health consequences, warns the company.
Through one of its initiatives, RELX has already had more than 100,000 illicit e-cigarette products removed from the market to date, emphasizing the massive reach of these unregulated goods, according to media reports.
The e-cigarette manufacturer’s statement also comes after it successfully won a court case in China against a company which infringed on the registered design of one of RELX’s high-selling products, RELX Essential.
“Preventing the production and sale of counterfeit e-cigarette products is one of the main challenges currently facing the e-cigarette industry. Counterfeit e-cigarette products pose serious potential health risks to consumers,” said Patrick Drilon, RELX International head of External Affairs – Philippines.
“While governments and local authorities work to implement stronger enforcement methods to rid the market of these harmful products, international e-cigarette companies can and should do more to aid them in this global fight to offer consumers products that abide by safety standards by undergoing stringent quality checks.”
October 24, 2022
Juul Labs Publishes its MDO Administrative Appeal

Photo: Juul Labs
Juul Labs has published its administrative appeal of the marketing denial order (MDO) issued by the Food and Drug Administration, which explains the company’s position, based on science and evidence, that the MDO was substantively and procedurally flawed. This appeal, referred to as a 10.75 appeal, is currently under review by the FDA.
In its press release for the MDO, the FDA stated that Juul Labs’s premarket tobacco product applications (PMTAs) “lacked sufficient evidence regarding the toxicological profile of the products” and that some of the “study findings raised concerns due to insufficient and conflicting data.”
Juul Labs believes that each of the deficiencies in the MDO is based on an incorrect and incomplete assessment of the data and, when the data are appropriately evaluated within the PMTAs, the FDA can properly assess the toxicological profile of Juul products and relative to other tobacco products including combustible cigarettes. The appeal also shows that all perceived limitations could have been resolved by clarifications through the usual, iterative process that the FDA has followed for prior applications.
Through its 10.75 appeal, Juul Labs requests that the MDO be rescinded and its PMTAs be placed back into substantive review so that the FDA can complete a full and fair review to determine whether the Juul System is appropriate for the protection of public health. “We believe that once the FDA does a complete review of all of the science and evidence presented in the applications, without political interference, as required by law, we should receive marketing authorization for our products,” Juul Labs wrote in a press note.
For context: In July 2020, Juul Labs submitted PMTAs to FDA for its currently marketed products and a new device with age-verification technology. The PMTAs included over 125,000 pages of data, information, and analysis from over 110 scientific studies across nonclinical (75+ studies), clinical (14 studies), and behavioral (21 studies) research programs to support the marketing of Juul products. The company also assessed its products relative to combustible cigarettes, an FDA-authorized heated tobacco product (IQOS), and other marketed vapor products.
Despite this science and evidence, on June 23, 2022, FDA issued a MDO for Juul Labs’ PMTAs. On July 5, FDA stayed the MDO, announcing, on its own, that it would review the decision after determining “there are scientific issues unique to this application that warrant additional review.”
A summary of the Juul Lab’s responses to what the company believes are the deficiencies of the MDO is available here.
October 24, 2022
Philippines Begins Consultation on New Vape Law

Photo: BillionPhotos.com
The Philippines Department of Trade and Industry (DTI) will begin consulting the public for the crafting of the implementing rules and regulations (IRR) of the country’s new vape law today, reports ABS-CBN News
“For private stakeholders who have an interest on the crafting of the IRR, they are included, and we will consider all inputs or all comments that were sent,” said DTI Undersecretary Ruth Castelo.
The Philippines’ Vaporized Nicotine Products Regulation Act governs the importation, manufacture, sale, distribution and use of vape products. Among other measures, it calls for lowering the vaping age to 18 from 21.
The DTI was tasked to craft the IRR, following the transfer of the regulation of vapes from Food and Drug Administration.
The proposal was submitted to the Presidential Palace on June 24, days before then-President Rodrigo Duterte stepped down from office. Because the executive branch did not act on it within 30 days, the proposed legislation lapsed into law in July.
October 24, 2022