The US Food and Drug Administration (FDA) issued three more warning letters to vapor industry companies on March 19. The latest announcement total brings the count to 69 letters this year for companies selling vapor products without gaining regulatory approval through the agency’s premarket tobacco product application (PMTA) process, according to the agency’s website.
The latest letters were issued to Arizona-based Vapor Outlet, Vapor Tech Hawaii and the Vaporium in Illinois. In its letter to Vaporium, the FDA stated that the company continues to “manufacture, sell, and/or distribute to customers in the United States The Vaporium 6mg Red White and Blue 70/30 30 ML e-liquid product” without a marketing authorization order.
“Your firm is a registered manufacturer with 19,860 products listed with FDA. It is your responsibility to ensure that your tobacco products comply with each applicable provision of the FD&C Act and FDA’s implementing regulations,” the letter states. “Failure to adequately address this matter may lead to regulatory action, including, but not limited to, civil money penalties, seizure, and/or injunction.”
Companies that receive warning letters from the FDA have to submit a written response to the letter within 15 working days from the date of receipt describing the company’s corrective actions, including the dates on which it discontinued the violative sale, and/or distribution of the products. They also require the company’s plan for maintaining compliance with the FD&C Act in the future.
Many of the FDA’s letters so far have gone to local vape shops that manufacturer their own e-liquid in the store. For example, Vapor Tech Hawaii’s letter states that the FDA has determined that it “manufacture, sell, and/or distribute to customers its Vapor Tech Hawaii Waikikiwi 100ML 3mg e-liquid product” without a marketing authorization order. On March 16, the company issued three letters to stores owned by the Louisiana-based Little Town Vaping for selling house brand e-liquids.
Xavier Becerra (Photo: State of California Department of Justice)
The U.S. Senate on Thursday narrowly confirmed Xavier Becerra as President Biden’s secretary of Health and Human Services (HHS), reports The New York Times.
Becerra will take charge as the Biden administration is working to lead the nation out of the coronavirus pandemic.
Biden’s selection of Becerra was a surprise, and it set off an immediate debate over whether, as a lawyer, he was the correct choice to lead a department that oversees high-profile medical agencies, including the Food and Drug Administration, the Centers for Disease Control and Prevention, and the National Institutes of Health. Republicans argued he was unqualified.
Democrats argued that Becerra had deep expertise in health policy. As California’s attorney general, he led 20 states and the District of Columbia in a campaign to protect the Affordable Care Act from being dismantled by his Republican counterparts. He has also been vocal in the Democratic Party about fighting for women’s health, including access to contraceptives and abortion.
In a tweet earlier this year, Derek Yach, president of the Foundation for a Smoke-Free World, described the nomination of Becerra as a “serious missed opportunity.”
“At a time of public health crisis, deep expertise in public health, medicine and science should matter,” Yach wrote. “Sadly, this is not apparent in the pick of the lead cabinet health voice.”
James A. Mish, CEO of 22nd Century Group, welcomed Becerra’s appointment, citing his leadership in tackling cigarette addiction.
According to Mish, Secretary Becerra is a long-time proponent of a reduced nicotine cap for cigarettes and tougher regulation for the tobacco industry. While serving as the attorney general of California in 2018, Becerra and five other attorneys general wrote a letter in response to the FDA’s Advance Notice of Proposed Rulemaking, strongly supporting a tobacco product standard for the nicotine level of combusted cigarettes.
“We look forward to joining Secretary Becerra, the HHS and the FDA on tackling the pressing public health tragedy caused by addictive cigarettes that is costing millions of Americans’ lives and billions of dollars each year,” said Mish in a statement.
Vapor Voice, in partnership with TMA, has created a tool to track PMTA submissions as they make their way through the review process.
By Timothy S. Donahue
The world is waiting. When premarket tobacco product applications (PMTA) were due to the U.S. Food and Drug Administration’s Center for Tobacco Products (CTP) on Sept. 9, 2020, the vapor industry wanted to know what companies had submitted the required data and could remain in the U.S. market legally. In response, the CTP stated it would release a list of products that may continue to be sold during the review process.
Nearly five months later, the CTP has yet to produce anything to help the retailers, wholesalers, manufacturers and suppliers. In late January 2021, CTP Director Mitch Zeller said that the FDA would release the information in the “coming weeks.” Zeller has also said that “thousands” of PMTAs were submitted. Meanwhile, the CTP has stated that before making such a list available, the agency needs to ensure that publishing any such information complies with federal disclosure laws.
The CTP did finalize PMTA and substantial equivalence rules (SE) meant to guide how a manufacturer can seek a marketing order for electronic nicotine-delivery systems (ENDS). The text of the final rule was published long after the provisional PMTA submissions were due. Then, nearly a week after its posting, the new Biden administration froze all new and pending rules introduced in the last part of the Trump administration, including the just-finalized PMTA rule. The rule was removed from the Federal Register prior to its effective date.
“While a memo from the White House chief of staff ordered the withdrawal of any rules that did not publish by noon on Jan. 20, 2021, and the PMTA and SE final rules were withdrawn, this does not impact the FDA’s review of PMTAs or SEs that the agency has received,” an FDA spokesperson told Vapor Voice. “The agency continues to process the large number of submissions received and has already begun reviewing many applications. In the coming weeks, the FDA intends to provide a more detailed update on the agency’s progress since the Sept. 9, 2020 deadline.”
The FDA spokesperson says the agency will work closely with the new administration to advance appropriate regulations and policies that were withdrawn and are in line with the agency’s public health mission.
To help stakeholders gain some visibility on this crucial issue, Vapor Voice partnered with data specialists TMA to locate and confirm who has submitted PMTAs and at what stage the application is in in the regulatory process. The PMTA list can be found here.
Because there is no central, publicly available database, the information had to be pieced together from multiple sources, according to TMA research assistant Karen Pace. Several organizations issued press releases as their PMTAs moved through the process. Many others did not. Pace says that Vapepmta.com, an online resource also attempting to collect PMTA information, has been a valuable resource in her research.
“Not all of the press releases are as specific as others,” says Pace. “I tried to research those that had minimal information. Sometimes that worked, sometimes I could not find anything more. Then I found Vapepmta.com. The site was extremely helpful and is where I gathered most of the information. It was still a challenge to gather information on the total number of submissions a company had and the actual products submitted.”
It was also difficult to know what brands and how many flavors or nicotine strengths (or even if a submitted product used a freebase or salt nicotine) a company submitted. Pace says the only way to know for sure about some submissions was to go to the source. “We checked corporate websites and also called or emailed the companies directly to verify submissions,” she says. “It is something we will continue to do moving forward as we update the listing.” In the end, Pace choose to list companies individually and list the brands submitted when possible. “We are going to need help from the industry in keeping the information accurate and up to date,” she says.
The Vapepmta.com team built and operates its platform and has no affiliation with the FDA or any other company. Dan Daniel Racowsky has been in the industry for more than five years and says limited information and confusion around PMTAs led the group to take on the task of building a PMTA listing.
“It wasn’t very challenging to gather data upfront. After launching, we gained some publicity and were flooded with inquiries from brands asking to be included in our database,” Racowsky said. “Somewhat of a challenge has been keeping our data as accurate as possible. We’re in direct contact with the majority of brands listed on our platform, and most are pragmatically keeping us informed on their PMTA’s progress.”
The list is a solid source for interested parties, however, it is impossible for VV/TMA to guarantee its complete accuracy. While many companies have confirmed the accuracy of their listings, in some cases we have not been able to reach the applicant.
“We put in a lot of effort to validate these submissions, but there are still some companies that haven’t returned calls or emails to confirm their listing,” says Taco Tuinstra, editor-in-chief for Vapor Voice. “We note those instances in the list.”
If you note inaccuracies in your listing, please send an email to pmta@vaporvoice.net and we will be pleased to update the information.
Methodology explained
Thousands of manufacturers and importers submitted premarket tobacco product applications (PMTA) to the U.S. Food and Drug Administration (FDA) by the Sept. 9 deadline to keep their products on the U.S. market. But which products exactly are under review and how all those submissions have fared in the process is less clear. A comprehensive list promised by the FDA has yet to materialize.
In the absence of an official database, Vapor Voice decided to create its own tracker. As a news outlet, we already receive many press releases relating to PMTA submissions. In addition, we continuously monitor corporate websites, social media platforms and other industry sources. Individually, the pieces of information gathered during those endeavors make for interesting news announcements; taken together, they provide a coherent dataset to track PMTAs.
Of course, this approach has its limits. The data is self-reported, and at present, we cannot fully verify the veracity of all claims made in the announcements used to compile the list. The quality of the information that reaches us also varies greatly, from exact counts in all list categories to more general statements on a brand or brand family without further elaboration. As per our protocol, these issues are noted in the list. While we cannot present our dataset as a representative sample, we believe that, after capturing information on 180 companies, it paints as coherent a picture as possible.
Our tracker lists company, brand family, brand styles and PMTA stage. We view it as a “living document” that will be updated as new information becomes available. To that end, the tracker also includes a tool for user input. If the status of your application has changed or if you notice inaccuracies, we invite you to share that information with our editors, who will be pleased to make the required updates.
Keeping in mind the limitations of our tracker, we recommend using this tool to gain directional understanding of the volume of submissions for which the FDA’s Center for Tobacco Products is processing and as a starting point in a comprehensive due diligence search regarding products. We also strongly recommend that any retailer gain certification of products in their inventory from the manufacturer and rely upon advice of counsel as to appropriate due diligence and safe harbor.
The Covid-19 pandemic slowed the regulatory process in 2020, creating an expected uptick in 2021.
By Chris Howard, special to VV
After CBD’s explosive growth in 2019 following the passage of the 2018 Farm Bill that legalized hemp, 2020 began navigation of a regulatory environment in flux. Burgeoning federal and state regulation, as well as increased research into consumer trends and tastes, begins outlining the future of CBD.
The Covid-19 pandemic slowed progress in the U.S. Food and Drug Administration’s (FDA) decision making around CBD, setting up 2021 as a crucial year for the industry, although it is unlikely that any FDA regulations will be finalized this year. Vapor industry veterans, who witnessed the regulatory battles with the FDA, are rightfully wary of the government’s efforts to oversee CBD, but the initial steps seem promising. It is still early days for the CBD industry, and the FDA appears willing to collaborate with the industry on many issues that are important to manufacturers and retailers alike.
As we look ahead, I offer some thoughts on the current CBD market, where regulatory efforts are and finally, what to expect as the CBD space matures.
State of the market
After CBD’s rise to prominence in 2019, last year represented more incremental growth. According to the Brightfield Group, a leading cannabis and CBD market research provider, the United States CBD market grew from $627 million in 2018 to over $4 billion in 2019, an increase of over 650 percent. In 2020, market growth slowed to 14 percent as CBD could be found in more stores and additional uncertainty caused retailers to tread carefully. Despite this recent modest growth, the Brightfield Group projects the CBD market will continue to grow from $4.7 billion in 2020 to nearly $15 billion by 2024.
Driving this growth is a mixture of increased consumer awareness and interest as well as improved access. Sales continue to increase in key market areas, especially e-commerce, creating more competition for CBD specialty stores and vape shops selling these products. C-stores were previously well positioned to capitalize on the market, but research from Technomic, a management consulting company, shows that consumers are being selective where they shop to better hand-pick CBD products.
Chris Howard
Consumer form factor preference (the types of products available containing CBD) has been another important area of analysis. Tinctures remain popular, especially with new CBD users. Lotions have become a huge source of interest for consumers with many over-the-counter topical, beauty and skin care companies investing heavily in these products. Refining offerings will be a key part of crafting common sense regulation and helping CBD companies make more confident investments in their product lines.
Regulations in 2021
It is no surprise that the FDA took significant interest in CBD as it quickly grew from an industry valued in the hundreds of millions to one worth billions. Yet, the agency has been slow to definitively rule on any regulations apart from taking a firm stance against companies making therapeutic or health claims, especially during the pandemic.
Where does that leave us now? The FDA’s studies into CBD are ongoing, both analyzing the effects of the compound as well as auditing the contents of current products, although progress has slowed due to Covid-19. Meanwhile, there remains some pressure from congress to create policy around CBD to act as a stopgap while the FDA creates long-term guidance.
I remain optimistic that the FDA will introduce a framework for the specific purpose of regulating products containing CBD that permits the marketing and sale of all form factors in the U.S. This includes food and dietary supplements, a source of much back and forth between CBD advocates and regulators. That said, it is unlikely that a rule will be finalized in 2021. I expect this to be subject to a lot of discussion this year. We will find out more based on how the Biden administration addresses CBD in the year ahead.
In the meantime, CBD companies are forced to navigate a labyrinth of state-by-state regulations. CSP and Grocery Business research indicates 46 states have created CBD laws. State laws can run directly counter to existing federal guidelines, such as those concerning food and beverage products—which are prohibited federally but which are permissible for sale within some states. The patchwork created by these various regulations continues to make national distribution of CBD products a challenge and in some cases even threatens the supply chain of hemp growers and manufacturers.
Looking ahead
While we await final FDA guidance on CBD, I see companies in this industry dealing with many of the same issues we’ve seen over the years in the vapor industry.
The cost of entry for many in the space will become increasingly burdensome once the FDA begins setting regulations, forcing many smaller CBD companies to exit the market. This is similar to what we have seen with PMTAs in vapor, where the larger companies have been far more well equipped to maintain a compliant product selection.
Although it has not been a concern yet, CBD companies should remain mindful and vigilant to ensure that they are taking the necessary steps to prevent youth use of CBD products. Taking a proactive stance now and preventing youth use will help avoid many of the issues faced by the vapor category over the past two years.
Although there are many complex considerations with CBD, it is hard not to get excited about this industry’s future. With continued strong market growth and an apparent pathway to sensible regulation from the FDA for sellers and consumers alike, the future remains bright. In 2021, I hope to see more progress from regulators as we continue to create a strong framework that will work to the benefit this industry and consumers for years to come.
Chris Howard is vice president, general counsel and chief compliance officer for E-Alternative Solutions.
Policy experts weigh in on the vaping industry’s future under the Biden administration.
By Maria Verven
Within days of assuming office, U.S. President Joe Biden issued executive orders to respond to Covid-19, by far the biggest global health threat in over 100 years. It may be months or even years before anyone knows how the new administration and the U.S. Centers for Disease Control and Prevention (CDC) and its new director, Rochelle Walensky, will respond to another major health threat: the 480,000 annual deaths caused by combustible cigarettes.
Vapor Voice interviewed vapor industry leaders and legislative experts for their opinions on how the vapor industry might fare under the new administration. The panel includes:
Mark Anton, executive director, Smoke-Free Alternatives Trade Association (SFATA)
“Let’s get the junk science funded by big pharma and the tobacco Master Settlement Agreement out of the narrative of harm reduction. The federal government must be guided by the best science to ensure responsible decision-making.”
Gregory Conley, president, American Vaping Association (AVA)
“Legal nicotine vaping products are far less hazardous than smoking and serve a vital public health role in helping adult smokers quit.”
Michael Siegel, professor, Department of Community Health Sciences, Boston University School of Public Health
“Vaping is, for many smokers, a life-saving health decision. It is much safer than smoking and is literally saving the lives of smokers who would likely die if they weren’t able to stop smoking.”
David T. Sweanor, adjunct professor, advisory board chair, Centre for Health Law, Policy & Ethics, University of Ottawa
“It’s the smoke, stupid.”
Vapor Voice: What policy changes might the Biden administration make regarding vaping products?
Anton: During the Biden administration, SFATA is taking the lead in youth prevention with the creation of the Responsible Industry Network, which we presented to HHS and the FDA. This would allow adults to access flavors while protecting small businesses through the FDA’s PMTA (premarket tobacco product application) process.
Mark Anton / Credit: SFATA
Adults need access to products that help them transition away from combustible cigarettes, so unfavorable e-cig policies and flavor bans should not be on their agenda. Vaping is truly a good tool for tobacco harm reduction. The industry is made up of former smokers who strive to develop the best manufacturing practices without the FDA’s help. To protect against youth use, SFATA supports the enforcement of T21 [Tobacco 21], passed by Congress and signed by the president. Covid[-19] policies have prevented true enforcement.
Finally, the CDC should always give true assessments and release reports to the media and medical and public health journals. Last year, the CDC failed to give a full accounting of EVALI (vaping-related lung illnesses), when they should have made a declarative statement that vaping nicotine e-cigs was not the cause.
Conley: Sadly, there is no use answering this question as there’s no indication whatsoever that the Biden Administration will make favorable decisions with regard to vaping products. I would be thrilled to be wrong, but after a decade of fantasizing about smart policy and regulations and only getting the opposite, it’s time to stop dreaming and work within the broken system we have.
Siegel: Introduce legislation to ban the sale of tobacco products, including vaping products, with the exception of stores only open to [consumers] 21-plus that only sell these products. And direct health insurance companies to cover electronic cigarettes just as they cover other forms of nicotine-replacement therapy.
Encourage physicians to promote vaping for smokers who are unable to quit using other means. And direct the CDC, FDA and other national health agencies to endorse the use of vaping products for smoking cessation, especially when traditional medications do not work. Finally, discontinue the requirement for PMTAs for vaping products and, instead, directly regulate these products by forcing the FDA to promulgate safety regulations.
Sweanor: Follow the science on relative risk and communicate truthfully with the public. And empower those who use nicotine to have control over their health though ready access to a wide range of low-risk alternatives to cigarettes and risk proportionate regulation of the spectrum of products. Access to alternatives to cigarettes should be no less urgent a public health goal than access to Covid[-19] treatments and vaccines. Government policy should reflect this urgency.
What were the most egregious policies implemented during the Trump administration?
Anton: Clearly, CDC misinformation about EVALI, falsely accusing e-cigarettes and seeking to ban flavors without sufficient scientific evidence is high on the list of misguided policies. And despite all the research to the contrary, they created hysteria by calling e-cigarette use by minors an ‘epidemic’ when it was not. The true epidemic is 480,000 smokers dying every year from smoking combustible cigarettes.
Conley: [Former]President Trump created a wave of issues when he declared that flavored vaping products should be banned because they were killing people. He was undoubtedly being fed bad information from his advisors, but it was ridiculous coming from the supposed pro-business, anti-regulation POTUS. Even Trump’s biggest fans realized that one of his flaws was his inability to hire competent people who shared his worldview. Putting Alex Azar in as Secretary of Health and Human Services assured there would be no positive movement to reform vaping regulations at any of the agencies HHS oversees.
Greg Conley / Credit: AVA
Siegel: The ban on flavored e-cigarettes in pod systems and the requirement that companies must submit PMTAs to stay on the market both need to be reversed. There does need to be regulation of nicotine strengths, especially for nicotine salts, but getting rid of flavors isn’t going to solve the problem of youth vaping, and it is hurting many adult ex-smokers.
Sweanor: I think the biggest failure was the failure to remove the mounting barriers confronting less hazardous products such as e-cigarettes. After a steep decline in cigarette sales by substituting safer products, particularly vaping, cigarettes started making a comeback as the CDC and other agencies engaged in a massively misleading campaign against vaping.
Meanwhile, the FDA put vaping at a marketplace disadvantage compared to cigarettes. Research showed those most at risk were misinformed about the relative risks.
At the end of Biden’s term, what state do you think the vaping industry will be in?
Anton: The outlook is not very bright for the small vaping industry based on Biden’s cabinet selections; many have anti-vaping outlooks and ignore the multitude of studies in support of the harm reduction potential of vaping products. The focus has been on youth use even though it’s decreasing at record levels. Much of the vapor industry success or demise will hinge on the Biden administration’s willingness to look honestly at the science. Additionally, Congress has pushed to ban flavors despite the fact that flavors are an important tool for the average smoker to quit smoking.
Politics have clouded the potential of this industry’s ability to reduce harm in the U.S. regarding smoking combustible cigarettes. If the Biden administration follows this path, we will be worse off. But if they choose science and real life, it will be better. Much hinges on the role the FDA will play in issuing marketing authorizations.
Conley: Right now, most adult vapers can easily access tens of thousands of different vaping products in every flavor you can think of. While there will always be a gray market and internet sales, the legal market will never be as free as it is today.
Four years from now, there will still be a legal market for tobacco-derived nicotine vaping products authorized by the FDA. It may not be a great market, but it will exist. Companies with authorized products will do everything in their power to disrupt the gray market such as stand-alone devices, nicotine-free or tobacco-free nicotine e-liquids that many vapers rely on.
Siegel: It will probably be worse off. If the administration enforces the PMTA rules, many vaping products will be taken off the market. Big tobacco companies and a few large independent companies will dominate the market. The growth of the e-cigarette sector will wane. Many ex-smokers will return to smoking, and e-cigarettes will no longer serve as an off-ramp for as many smokers.
Dr. Michael Siegel
Sweanor: Ultimately, disruptive technology, science, rationality and human rights will win, and cigarettes will go the way of previous categories of unreasonably hazardous goods and services. The question of whether that happens within four years depends on the way politics unfolds and the emergence of leaders who see the opportunity and relentlessly pursue it.
Is limiting the level of nicotine a viable solution for users of conventional tobacco?
Conley: Bloomberg-funded prohibitionists and legislators who can’t differentiate between classes of vaping products are not going to be swayed by nicotine limits. Their goal is prohibition. When you give in to the prohibitionists, all you’re doing is guaranteeing they’ll be back next year to argue that we need flavor bans because nicotine limits didn’t work.
Siegel: Yes. Limiting nicotine in e-cigarettes will help reduce youth addiction to these products. There is also evidence that very low nicotine cigarettes can result in much lower levels of addiction in cigarette smokers.
Sweanor: No. It’s a replication of the disastrous Volstead Act that ushered in Prohibition, which forced beer and wine to have no more than a minimum level of alcohol.
David Sweanor
The total U.S. nicotine market is over $80 billion, and the cigarette market alone is over $60 billion, with tens of millions of consumers. The products are far more dependence-producing than alcoholic beverages. A prohibitionist policy is very unlikely to garner political acceptance and could rapidly lead to the sort of entrepreneurship and criminality long associated with other abstinence-only campaigns.
Many who are pushing for such a policy also oppose the wide availability of consumer-acceptable low-risk alternatives to cigarettes, demonstrating that this is a flawed moralistic strategy rather than a pragmatic public health one.
What chance do any of these proposed changes/solutions have at being implemented?
Anton: The previous FDA leadership has called the millions of smokers who have transitioned from combustible cigarettes to flavored vapor products ‘anecdotal evidence’ without investing any funds into research. The Biden administration and the new FDA leadership now has the opportunity to affect public health on a massive scale by investigating this hypothesis.
The U.K.’s National Health policy recommends that smokers who want to quit switch to vaping. They recognize vaping is safer than cigarettes. This is from the country that put warning labels on cigarette packs four years before the U.S. The Responsible Industry Network is a framework that will help prevent youth access, limit marketing to age-restricted stores and develop a pathway to prevent the loss of tens of thousands of small businesses. It brings together all the elements of the Tobacco Control Act (TCA)—protecting youth from smoking and tobacco use while assisting millions of adults who are trying to stop smoking.
While these are foundational items of the TCA and the FDA, politicians are missing the opportunity to help millions of current smokers because vaping is so politicized and youth use and access to vapor products has been blown out of proportion.
Siegel: The likelihood [that] these policies will be implemented is very low. I just don’t think the mainstream tobacco control and health organizations support the idea of harm reduction in tobacco control.
Sweanor: I have little ability to discern the likelihood of rational policies, in part because the current politics around nicotine seem to favor a War on Drugs mentality where the pursuit of total abstinence takes precedence over a public health orientation. Much will depend on Americans who use nicotine, a demographic Biden appears to care very much about.
The original “Vaping Vamp,” Maria Verven owns Verve Communications, a P.R. and marketing firm specializing in the vapor industry.
Kaival Brands Innovations Group, the global distributor of all Bidi Vapor products, announced its premarket tobacco product application (PMTA) has moved the substantive review phase of the regulatory process. Bidi’s disposable e-cigarettes, Bidi Stick, comes in 11 flavor varieties, according to a press release.
Substantive Review is where the scientific review of the U.S. FDA’s regulatory process is undertaken. The company received its acceptance letter, the first step, on Feb. 9. The FDA will determine if Bidi products meet the criteria for “appropriate for the protection of the public health” established in the Tobacco Control Act. The agency issues marketing orders that authorize the continued marketing and sale of products meeting the criteria.
“Seeking an order for the continued marketing of Bidi Sticks in the United States is a long process. But it was always our goal to provide a premium vaping experience and an option to traditional, combustible tobacco that meets the needs of every adult smoker,” said Niraj Patel, the president and CEO of Kaival Brands. “This substantive review phase is where months of extensive information collection and hard work gathering together 285,000 pages of science-based evidence will pay off, as we continually put consumer health and the environment first.”
Bidi Vapor also announced they have discontinued their online direct-to-consumer (DTC) sales through its website as of February 22, 2021. The company will allow sales through gopuff.com. “With a long history of distribution of alcoholic beverages, goPuff has pioneered a very stringent and dynamic compliance program and age-gating process,” the release states.
“We are extremely excited to partner with one of the fastest growing and most secure online delivery services in the country,” stated Kaival Brands’ Chief Executive Officer, Niraj Patel. “More importantly, goPuff’s commitment to protecting minors and stringent procedural implementations will allow Kaival Brands to focus on our rapidly developing additional wholesaler distribution agreements.”
While Kaival Brands will continue its business-to-business (B2B) online sales to retailers, it believes its decision to halt online DTC sales specifically through www.bidivapor.com will set an example for the industry and help reduce the larger problem of underage access to vaping devices. “The decision also bolsters its commitment to brick-and-mortar retail, which Kaival Brands believes to be a stronger age-verification distribution model than online sales,” the release states.
The United States Postal Service (USPS) is scheduled to publish in the Federal Register its rules for mailing electronic nicotine-delivery system (ENDS) products tomorrow, Feb. 19. The unpublished rule states “that the prohibition on mailing ENDS will apply immediately ‘on and after’ the date of the final rule.”
Credit: F. Muhammad
However, the Preventing Online Sales of E-Cigarettes to Children Act, which placed ENDS under the PACT Act, was enacted on December 27, 2020 and becomes effective 90 days after enactment (March 27, 2021). The USPO rule states that the agency will mail vapor products under narrowly defined circumstances:
Noncontiguous States: intrastate shipments within Alaska or Hawaii;
Business/Regulatory Purposes: shipments transmitted between verified and authorized tobacco industry businesses for business purposes, or between such businesses and federal or state agencies for regulatory purposes;
Certain Individuals: lightweight shipments mailed between adult individuals, limited to 10 per 30-day period;
Consumer Testing: limited shipments of cigarettes sent by verified and authorized manufacturers to adult smokers for consumer testing purposes;
Public Health: limited shipments by federal agencies for public health purposes under similar rules applied to manufacturers conducting consumer testing.
Many business were unsure if B2B mailing would be allowed. The unpublished rules say they will be allowed. According to Azim Chowdhury, a partner at Keller and Heckman, the PACT Act has historically exempted businesses-to-business deliveries from the USPS ban. Specifically, the USPS ban does not extend to tobacco products mailed only for business purposes between legally operating businesses that have all applicable state and federal government licenses or permits and are engaged in tobacco product manufacturing, distribution, wholesale, export, import, testing, investigation, or research.
“Companies seeking to use USPS for business-to-business deliveries must first submit an application to the USPS Pricing and Classification Service Center and comply with several other shipping, labeling, and delivery requirements,” said Chowdhury.
The USPS rules also state that the listed exceptions cannot feasibly be applied to inbound or outbound international mail, mail to or from the Freely Associated States, or mail presented at overseas Army Post Office (APO), Fleet Post Office (FPO), or Diplomatic Post Office (DPO) locations and destined to addresses in the United States. Because of this inability, all ENDS products “in such mail are nonmailable, without exception.”
In addition to the non-mailing provisions, the PACT Act requires anyone who sells cigarettes or smokeless tobacco to register with the ATF and the tobacco tax administrators of the states into which a shipment is made or in which an advertisement or offer is disseminated, according to Chowdhury. Retailers who ship cigarettes or smokeless tobacco to consumers are further required to label packages as containing tobacco, verify the age and identity of the customer at purchase, use a delivery method (other than USPS) that checks ID and obtains an adult customer signature at delivery, and maintain records of delivery sales for a period of four years after the date of sale, among other things.
Excluded from the statutory definition are products approved by the U.S. Food and Drug Administration (FDA) for sale as “tobacco cessation products or for other therapeutic purposes and marketed and sold solely for such purposes.” The USPO also proposes to treat ENDS as a standalone category, “albeit one generally subject to the same restrictions and exceptions as cigarettes, consistent with the statute.”
A new bill in the U.S. state of Mississippi aims to add vapor to the state’s 15 percent tobacco tax rules. Senate Bill 2182, authored by Senator David Blount, would define an “electronic smoking device” and add that to the definition of other tobacco products with the additional tax.
Credit: Pieter Van de Sande
“‘Electronic smoking device’ means any device that can be used to deliver aerosolized or vaporized nicotine to the person inhaling from the device, including, but not limited to, an e-cigarette, e-cigar, e-pipe, vape pen or e-hookah,” the bill states. “Electronic smoking device includes any component, part or accessory of such a device, whether or not sold separately, and includes any substance intended to be aerosolized or vaporized during the use of the device. Electronic smoking device does not include any battery or battery charger when sold separately. In addition, electronic smoking device does not include drugs, devices or combination products authorized for sale by the U.S. Food and Drug Administration, as those terms are defined in the Federal Food, Drug and Cosmetic Act.”
Current Mississippi law indicates that cigars, cheroots, stogies, snug, chewing and smoking tobacco and all other tobacco products except cigarettes shall be taxed 15 percent of the manufacturer’s list price. This bill would add electronic nicotine delivery systems (ENDS) to that list.
A House bill heard a Montana state house legislative committee last week would limit local control on alternative nicotine and vapor products, retroactively canceling the City of Missoula’s flavored vape ban passed by the Missoula City Council last November.
House Bill 137, sponsored by Rep. Ron Marshall, R-Hamilton, aims to amend the State of Montana’s Youth Access to Tobacco Act by clarifying that alternative nicotine products are separate from tobacco products, according to a story on kpax.com
It would also prevent and stop any regulation on nicotine and vapor products by local governments, health boards and the Montana Department of Public Health and Human Services – an agency that attempted to eliminate the sale of flavored e-cigarettes last summer.
“It needs to be addressed,” said Marshall, who was part of a trade association who unsuccessfully sued over former Gov. Steve Bullock’s 120-day flavored e-cigarettes ban as co-owner of Freedom Vapes in Belgrade, Bozeman and Hamilton.
“There’s a lot of holes, and 56 counties in Montana means 56 different sets of rules. Everything should go through the legislative body when it comes to law. It’s just one of those things where everybody needs to be on the same page, and we need to have a clear definition of what these products are.”
Marshall said that HB 137 has been coming for a long time, and with COVID-19, laws restricting alternative nicotine products cause substantial damage to a retailer’s revenue earnings.
“Right now, with the climate out there with COVID and lost jobs and businesses and all that, coming up with another attempt to shut down more business or curtail more business is the wrong answer,” Marshall said. “You’re not only doing that, but you’re also taking away revenue. And that’s revenue that not only goes to the cities and counties, but to the state. Let’s back up and look at the big picture.”
When the Missoula City Council was discussing its flavored vape ban, City Attorney Jim Nugent said it would likely face a lawsuit as it was written at the time. Council members made changes to the ordinance to strengthen it against any legal challenge.
The city’s flavored vape ban will go into effect on Jan. 25, and Missoula County may use its extraterritorial powers to extend the ordinance five miles beyond city limits.
Nugent said the city hasn’t faced a lawsuit regarding the ordinance, and with the final section of HB 137 stating that the bill would apply retroactively, the city likely won’t face a lawsuit. Nugent said the retroactive portion of the bill is aimed at Missoula.
“Instead of a lawsuit, it is now being challenged through the Legislature,” Nugent said.
Councilmember Gwen Jones, one of the five sponsors of the ordinance, said in a statement to the Missoula Current that she hopes the legislature lets the ordinance stand.
A tobacco flavor ban that includes vaping products has cost the state of Massachusetts nearly $75 billion in taxes. According to a study by the New England Convenience Store and Energy Marketers Association (NECSEMA), excise tax lost income in Massachusetts from selling fewer menthol cigarettes alone amounted to $62 million in the first six months of the ban. No specific figures were given for electronic nicotine delivery systems in the release.
Credit: Ruben Bagues
That loss also simply transferred to Massachusetts’ neighboring states. Cigarettes excise tax stamp sales dropped 23.9 percent in Massachusetts while New Hampshire gained $28,574,340 or 29.7 percent. Rhode Island gained $12,100,000 or 18.2 percent in excise taxes.
The estimated Massachusetts loss including the sales tax is $73,008,000 while Rhode Island saw a gain of $14,066,740.
“With every month that passes, the state’s ban on flavored tobacco becomes increasingly absurd,” said Jonathan Shaer, executive director of NECSEMA. “All anyone needs to do is look at the excise tax stamp numbers from June through November to understand how ineffective and ridiculous this ban is. Rhode Island and New Hampshire have combined to sell 18.9 million more stamps than they did over the same period in 2019 while Massachusetts has sold 17.7 million fewer. Indisputably, menthol cigarettes are purchased in neighboring states and then brought back into Massachusetts for personal consumption or illicit market sales.”
NECSEMA opposed the flavored tobacco ban in 2019 when it was first presented, and continues to monitor sales data to demonstrate the failure of the law and the wrongful impact to its members. The association represents both chain and independent convenience store owners, including many in urban communities that NECSEMA states are being disproportionately affected by the flavor ban ban.
According to the National Association of Convenience Stores (NACS), there are 3,360 convenience stores in Massachusetts with 54,000-plus employees accounting for $17 billion in sales annually. Over 89 percent of legal cigarette sales occurring at convenience stores.
“I challenge anyone to demonstrate how this ban has been effective,” Shaer said. “New Hampshire and Rhode Island imports have replaced sales once made in Massachusetts by licensed retailers. In fact, the latest data shows an uptick in cigarette sales when you combine the increases for non-flavored cigarettes in Massachusetts with total cigarette sales gains in New Hampshire and Rhode Island. Massachusetts small businesses have lost, the Massachusetts budget has lost, public health has lost, and youth who this law was allegedly intended to protect have lost since prevention revenue has greatly diminished.”
