Tag: retail

  • Vapor and E-Cigarette Sales Surging at C-Stores, Up 6.8%

    Vapor and E-Cigarette Sales Surging at C-Stores, Up 6.8%

    While the e-cigarette and vaping product industry overall is struggling everywhere from regulatory challenges to competition from nicotine replacement products to disruption amid Covid-19, the C-store market continues to grow.

    C-store dollar sales of electronic cigarettes have risen a hefty 6.8 percent for the 52 weeks ending Aug. 9, according to IRI, and unit sales are surging, seeing a 15.6 percent rise for the same period. And that’s with an average price drop of $1.13 per unit, according to Convenience Store Decisions.

    But the regulatory heat is rising. Most recently, California’s Gov. Gavin Newsom, D-Calif., signed into law Senate Bill 793, a flavored vaping ban, on Aug. 28. Chicago passed a flavored vape ban on Sept. 9, and backers of an Illinois state initiative that stalled last year said they plan to try again in 2021.

    Municipal and state bans are nothing new to vape manufacturers and retailers. And until federal guidelines, in the form of policy and/or legislation, set a standard for all jurisdictions those local restrictions will continue to trouble more convenience operators.

  • MIchigan Recalls Marijuana Vapes With Vitamin E Acetate

    MIchigan Recalls Marijuana Vapes With Vitamin E Acetate

    The Marijuana Regulatory Agency (MRA) in Michigan has issued a recall for any vape cartridges containing Vitamin E Acetate. The US Centers for Disease Control and Prevention (CDC) has said vitamin E acetate is responsible for a rash of lung disease.

    Many of these products were sold from Plan B Wellness, located on 20101 8 Mile Road in Detroit. Most of them were sold late 2019.

    The substances has failed safety compliance testing in August. According to a news release, these cartridges were made before November 2019, when the rules for marijuana products were filed in the state.

    The vape cartridges will all have a license number of the marijuana facility on it. They will also have a tag number that is followed by a statewide monitoring system.

    MRA suggests customers and patients to return the affected products to Plan B Wellness, who will properly dispose them. The store will also contact customers who have bought these items.

  • Legal Marijuana Sales Growing After EVALI Declines

    Legal Marijuana Sales Growing After EVALI Declines

    cannabis vape
    photo: Jeremynathan | Dreamstime

    It was a year ago that lung disease caused by vitamin E acetate in illegal THC pens that caused legal marijuana sales to plummet. Today, marijuana vapor companies report that sales are returning to normal as consumers begin to understand the danger of consuming black market marijuana vape pens.

    Arnaud Dumas de Rauly, co-founder and CEO of New York-based vape manufacturer The Blinc Group, sees this as the biggest impact of the vaping health scare. “It made consumers realize that you can’t just buy any cannabis vaping product,” he said. “You can’t go to the black market.”

    The outbreak of what the Centers for Disease Control and Prevention dubbed e-cigarette or vaping product use-associated lung injury (EVALI) in the summer of 2019 slowed the growth of some companies and stifled sales toward the end of the year, according to a story posted on mjbizdaily.com.

    But vape products, like other cannabis goods, seem to also be weathering not only the health crisis but the current economic downturn. “We’ve seen tremendous bounce back from the vape crisis,” said Sammy Dorf, chief growth officer and co-founder of Verano Holdings, a vertically integrated cannabis company in Chicago. “Business is extremely strong.”

    The COVID-19 pandemic hasn’t slowed business much, either, according to the vape companies, despite fresh warnings that vaping and smoking can make a person more vulnerable to the virus. “We haven’t seen a change in the purchasing pattern of our patients or customers due to the pandemic,” Dorf added.

    How it played out

    The vape health crisis unfolded rapidly, beginning in the summer of 2019 with mainstream media reports seizing on the news that people were dying from allegedly vaping mainly THC products. Some states with regulated cannabis markets such as Washington temporarily banned additives in vapes, while others, including Massachusetts, banned the sale of vape products altogether.

    It took a few months for more information about the illness to surface. Scientists identified one substance, vitamin E acetate, which is added as a cutting agent to some vape oil, as a possible culprit in the lung illness.

    Many industry officials claimed that vitamin E was more commonly found in illicit market products and pointed out that legal cannabis is regulated, tested and safer than unregulated street products.

    Most recently, an academic study published in August confirmed that states lacking licensed, regulated cannabis saw the highest rates of EVALI, particularly those in the northern Midwest. (See chart above.) The report, from the Society for the Study of Addiction, noted “these results suggest that EVALI cases did not arise from e-cigarette or cannabis use per se, but rather from locally distributed e-liquids or additives most prevalent in the affected areas.”

    “We believe the bigger lesson here is that the data clearly indicate that there were fewer cases of lung illnesses and injury in states where legal, regulated cannabis products were available,” said Steve Fox, strategic adviser to the Cannabis Trade Federation. “In fact, the lowest rates of incidence were in Colorado, Washington and Alaska – three of the first four legal states – with Oregon and Nevada close behind.”

    ‘Very scary’

    According to Seattle data-analytics company Headset, sales of adult-use vape products in three of four states with recreational markets generally have recovered, though Nevada retailers saw sales still lower than pre-health scare levels after the state enacted stricter lockdown measures for marijuana retailers during the pandemic.However, market share for vape pens is lower year-over-year, according to the Marijuana Business Factbook, as flower tends to represent a more economical choice amid COVID-19 and greater economic concerns.

    Several cannabis vape business executives interviewed for this story said sales have completely rebounded. George Sadler, president of San Diego-based Platinum Vape, which sells products into several markets, said sales plateaued right after the initial scare but started trending upward in the early winter. “We never really saw much of anything on the level of decline that we thought,” Sadler said.

    Dumas de Rauly said his sales started to recover in December as consumer confidence in the legal market returned. “We have doubled our revenue in terms of vaping hardware since the vaping crisis,” Dumas de Rauly said.

    But he added that his business likely lost a year of growth because of the earlier drop in sales. In Denver, Dan Gardenswartz, chief operating officer at Spherex, said his company’s sales never took a “meaningful hit,” but the end of 2019 was “a little bit of a roller coaster.”

    “It was a very strange time,” he said. “The vape crisis was a very scary thing for people in the industry.”

    Seth Wiggins, chief revenue officer for Clear Cannabis, also in Denver, saw a decline in sales for about 60-90 days before the trend began to reverse. The health crisis “was very painful initially,” he added. However, Wiggins said his company has posted record sales in recent months.

    Illicit to licit

    Wiggins attributes that lift in sales to customers who are shifting from illicit suppliers to legal providers. “The compliant market allows for more regulations and safety,” he added. “It’s breaching the tipping point where the cost basis is not worth the risk” to buy off the street.

    Morgan Fox, spokesman for the National Cannabis Industry Association, also identified that trend. “Across the board, we’ve seen a lot of people moving away from the unregulated market largely because of public-health concerns,” he said.

    Gardenswartz said he saw more people transition from the illicit to the legal market in California than in Colorado, which has imposed tighter controls on illegal dispensaries peddling products. Sadler agreed. He believes there has been some decline in vape sales on the unlicensed market, and he noted that some of his consumers have made the shift from the illicit market to licensed businesses.

    He cited Weedmaps’ decision to curtail advertising for unlicensed dispensaries as helping consumers find legal, tested vape products. Consumers are more aware that they’re going to a licensed dispensary, and stores in California have even displayed QR codes on storefronts so customers know they’re buying from a legal shop.

    “People are more diligent about asking the questions,” he said.

  • Canopy Growth to Launch CBD Brand With Martha Stewart

    Canopy Growth to Launch CBD Brand With Martha Stewart

    Photo: Kaylen Settles

    Canopy Growth has teamed with Martha Stewart on a CBD product line. The products that will be sold online via the Canopy website and will range in cost from $34.99 to $44.99. The brand isset for a release this week after more than a year in development, CNN reports. A line of pet products is set for later this year.

    David Klein, Canopy’s CEO, told CNN Stewart “brings that trusted voice” to the market.

    Stewart was closely involved with the development of the products, which include gummies that resemble pâte de fruits, and flavors such as Meyer lemon, kumquat, blood orange, and huckleberry. Stewart said that she is working on a separate CBD skincare project – called 86 Elm – with a dermatologist.

    The Martha Stewart brand is owned by Marquee Brands, which acquired it from Sequential Brands Group last year, along with the Emeril Lagasse brand, for $175 million. In 2018, Constellation Brands, which owns Corona and other beers, paid $4 billion for a major stake in Canopy Growth, a Canadian marijuana company.

    Stewart was reportedly introduced to Canopy by Snoop Dogg and his talent agency, Stampede Management. The duo has collaborated on several projects throughout the years. Snoop’s Leafs by Snoop brand is also produced in partnership with Canopy.

  • Final Countdown: PMTAs Due to the FDA by 4pm Today

    Final Countdown: PMTAs Due to the FDA by 4pm Today

    The vapor industry is expected to look vastly different tomorrow. At 4pm today, all premarket tobacco product applications (PMTA) must be submitted to the U.S. Food and Drug Administration (FDA). Many industry players say that the regulatory rule will force more than 10,000 businesses to close and cause more than 100,000 jobs to be lost. It could also force millions of vapers back to smoking deadly combustible cigarettes.

    The vapor industry is not dead, however, as several manufacturers have announced that their PMTA submissions have been accepted and filed by the FDA. This allows those products to remain on the market while the FDA conducts its substantive review phase of the PMTA. During this period, the FDA will evaluate whether marketing a specific electronic nicotine delivery system (ENDS) product is appropriate for the protection of public health.

    If a company does not submit a PMTA by 4pm today, it must remove its products from the market. If the product was “verifiably” on the market prior to Aug. 8, 2016 (the FDA’s cutoff for new products) and submitted a PMTA application before Sept. 9 at 4pm, the product can stay on the market for up to a year or until the FDA approves or denies the PMTA. For any PMTA submitted after today’s deadline, a product may not be marketed until the FDA grants a marketing order, according to the FDA.

    The FDA has said that it will release a list of products that can legally remain on the market, although no timeframe was established for when that list would be available to retailers. Beyond all the major tobacco companies, which all have submitted PMTAs for vapor products, only a few other companies have publicly announced PMTA submissions to the FDA for their products.

    As of Aug. 31, the FDA had received applications for around 2,000 deemed products, of which around 40 percent have been resolved, according to Mitch Zeller, director of the agency’s Center for Tobacco Products. Only two brands have ever had a PMTA application approved, Swedish Match’s General snus products and Philip Morris International’s IQOS, HeatSticks and charger.

    AMV Holdings (Madvapes, Kure, Aloma), Avail Vapor, Beard Vape Co., Charlie’s Chalk Dust, Bidi Stick, E-Alternative Solutions (Leap, Leap Go), Innoken, Jarvis Vaping Supply, KangerTech, Nicopure Labs, Prism (511 Solutions), Smok, Smoore/Vaporesso, Turning Point Brands and Voom are just some of the vapor manufacturers that are not affiliated with a major tobacco company that have filed PMTAs. It is expected that this list will grow exponentially throughout the day as companies submit applications before the deadline. Several companies have said they have submitted PMTAs already but are waiting for acceptance letters from the FDA before making the announcement public.

    “We feel that we have met all documentation requirements in our over 3-million-page submission thus far,” wrote James Jarvis of Jarvis Vaping Supply in a press release. “We excited about the future opportunity to work with [the] FDA and the industry to achieve final authorization in the coming months.”

    Receiving a marketing authorization to sell vapor products isn’t the end of the process for manufacturers. The FDA requires companies to conduct post-market surveillance and studies to determine the impact of the marketing orders on consumer perception, behavior and health, and to enable the FDA to review the accuracy of the determinations upon which the orders were based.

    These post-market requirements include a rigorous toxicity study using computer models to help predict potential adverse effects in users. The orders also require the company to monitor youth awareness and use of the products to help ensure that the marketing of the product does not have unintended consequences for youth use.

  • Philip Morris International Opens IQOS Stores in Manila

    Philip Morris International Opens IQOS Stores in Manila

    Photo: Alpar Benedek | Dreamstime.com

    Philip Morris Fortune Tobacco Co. (PMFTC) is opening its first four IQOS stores in Manila, reports The Manilla Standard.

    While the heat-not-burn product has been available in the Philippines through several retail outlets since April, the opening of the stores marks a significant step towards achieving the company’s vision of a smoke-free future, according to PMFTC President Denis Gorkun.

    “PMFTC’s vision is to help adult smokers who would otherwise continue to smoke to move away from cigarettes as quickly as possible and switch to a better alternative,” Gorkun said.

    PMFTC parent company Philip Morris International has invested more than $7 billion in research, development and production capabilities to create smoke-free products such as IQOS, which are now available in several countries.

    In July, the U.S. Food and Drugs Administration (FDA) authorized the marketing of IQOS and heat sticks in the U.S. with a reduced exposure claim adding that such issuance is appropriate for the promotion of public health.

    Gorkun said the FDA decision shows that IQOS is a fundamentally different tobacco product compared to cigarettes and a better choice for adults who would otherwise continue smoking.

    About 60 percent of Filipino adult smokers are willing to try smoke-free alternatives provided they are made commercially available and meet quality production standards, according to a study commissioned by PMFTC.

    PMFTC said IQOS is aimed at adult smokers. The company is implementing age verification and access restriction to ensure that only legal age consumers 21 years old and above will have access to the stores, the e-commerce website and the IQOS products.

  • Retail Groups Urge FDA to Release List of PMTA Filers

    Retail Groups Urge FDA to Release List of PMTA Filers

    Retailers are struggling to know what vapor products will be able to remain on the market after Sept. 9. That’s the deadline for manufacturers to file premarket tobacco product applications (PMTA) to the U.S. Food and Drug Administration (FDA).

    In a letter to the FDA, several retail associations are asking the regulatory agency to release a list of manufacturers that have PMTAs on file so retailers can know what electronic nicotine delivery system (ENDS) brands can remain on store shelves.

    “As the September deadline approaches, the PMTA List will be critical to support compliance across the tobacco trade channel, helping inform distributors, wholesalers, and retailers which ENDS products are being marketed legally in accordance with FDA’s compliance policy,” the group wrote. “Relatedly, such a list also would facilitate enforcement against those manufacturers that continue to introduce illegally marketed products without premarket authorization or, in the case of deemed, currently marketed products, without a PMTA submitted by the deadline.”

    FMI (the Food Industry Association), the National Association of Convenience Stores, the National Association of Truckstop Operators, the Petroleum Marketers Association of America, and the Society of Independent Gasoline Marketers of America state that “unlike the confidentiality provisions that are afforded to applicants” of PMTAs, such restrictions are not applicable when the PMTA filing applies to a currently marketed product.

    “While FDA typically does not disclose the existence of a premarket product application (unless the applicant has publicly disclosed or acknowledged the existence of the application), the underlying rationale for non-disclosure does not apply in this situation,” the letter states. “Unlike PMTAs for products that have not yet been marketed, disclosing the existence of PMTAs submitted for ENDS products that have been on the market since at least August 8, 2016, through publication of the PMTA List, would not reveal any trade secret or (confidential commercial information).”

    In the 6-page letter to Matthew Holman, director, Office of Science for the FDA’s Center for Tobacco Products, the retail group also stated that if the FDA would require consent from the manufacturer before disclosure, the retail group could provide “recommendations on a streamlined process for obtaining such consent” quickly.

    “For example, FDA could ask for an applicant’s consent at the time of submission. To do so, [the] FDA could add a field in its submission portal notifying the applicant of the option to permit the agency to disclose the existence of its PMTA in a public list,” the group suggests. “Alternatively, in its initial acknowledgement letter, which provides the submission tracking number (STN) to applicants, FDA could ask for such consent. In both cases, the applicant would have the opportunity to provide affirmative consent.”

  • Illinois Marijuana Sales on Record Pace This Year

    Illinois Marijuana Sales on Record Pace This Year

    Credit: Frederick Warren

    Illinois has already hit the $300 million mark for marijuana sales this year. July had the most sales of any month, according to state figures.

    July cannabis sales hit $61 million, which is up from $47.6 million in June and $44.3 million in May, according to the Illinois Department of Finance and Professional Regulation and New Frontier Data, according to the Associated Press..

    One reason for the increase in sales could be the customers’ ability to order online, which many dispensaries started to keep lines down, the Chicago Tribune reported.

    “We got a lot better at being able to get people in and out because of the online order reservations,” said Jonah Rapino, spokesman for NuEra, which has dispensaries in Chicago, East Peoria and Urbana and recently changed its name from NuMed.

    The amount of money that customers spend at dispensaries has also increased. The average transaction was $126 in the first three months of the year but increased to $150 in April, May and June, according to Washington, D.C.-based New Frontier.

    Greg Butler, chief commercial officer at Chicago-based marijuana company Cresco Labs, said the pandemic could be credited to the increase in demand, too.

    More product availability could also be a contributing factor to the high demand. During the beginning of the year, there were some supply issues. The Tribune previously reported that dispensaries said they needed more marijuana and employees.

    Butler noted that many facilities that grow marijuana expanded operation, and those products started hitting the shelves over the summer. Cresco expanded at some of its facilities and increased production at its Joliet location.

    “With supply picking up, it has allowed customers to purchase that extra product or two that might not have been available,” said Michael Mandera, general manager of the Herbal Care Center dispensary.

  • Combustible Cigarette Sales Outperform Vapor During Pandemic

    Combustible Cigarette Sales Outperform Vapor During Pandemic

    Vapor sales are slumping during the Covid-19 crisis, while combustible cigarette sales continue to perform better than expected, according to two industry analysts.

    Overall sales volume for traditional cigarettes was down just 0.2 percent for the four-week period that ended July 11, according to the latest Nielsen survey of convenience stores.

    By comparison, the sales volume was down 7.2 percent in the four-week period that ended in Aug. 10, 2019, writes Richard Craver in an article for the Winston-Salem Journal.

    Meanwhile, sales of electronic cigarettes — down 13.2 percent for the four-week period — have continued to slump five months after the Food and Drug Administration implemented its latest round of heightened regulations on the products.

    The FDA regulations have depressed the demand for closed-pod cartridges that provide the nicotine, with No. 2-selling Vuse of R.J. Reynolds Vapor Co. being the lone exception, according to the article.

    The ability of traditional cigarette to flatten its sales decline year-over-year represents “a very dramatic change in the market and coincides with the concerted attacks on vaping over the past year,” said David Sweanor, an adjunct law professor at the University of Ottawa and the author of several e-cigarette studies. “It is deeply ironic that the credit for the recovery of the cigarette business from a near-death experience a little over a year ago can be credited to the Centers for Disease Control and Prevention, Michael Bloomberg and the others who pushed an abstinence-only agenda on nicotine. By undermining the low risk alternatives to cigarettes they protected the cigarette business.”

    The biggest factor in the most recent report was the list price hike by the major three U.S. tobacco manufacturers in June.

    Goldman Sachs analyst Bonnie Herzog reported that Philip Morris USA raised its list price by 11 cents a pack for Marlboro, including Marlboro HeatSticks, and eight other brands. It is typical that R.J. Reynolds Tobacco Co. and ITG Brands LLC raise their prices by a similar amount.

    The list price is what wholesalers pay manufacturers for their products. The increase typically is passed on to customers at retail, the article states. The manufacturers also raised by 8 cents a pack the list prices of their traditional cigarettes on Feb. 23.

    During 2019, the manufacturers raised their prices by 9 cents to 11 cents a pack in April, 6 cents in June and 8 cents in October. Traditional cigarettes had $60.05 billion in sales at convenience stores over the past 52 weeks, representing 80 percent of all U.S. tobacco sales, according to the Nielsen report.

    Moist snuff and chewing tobacco were at $7.51 billion and 10 percent, while electronic cigarettes were at $3.8 billion and 5 percent, and cigars at $3.59 billion and 5 percent.

    Overall e-cigarette sales-volume growth has declined steadily since Nielsen’s Aug. 10, 2019, report, when it was up 60.2 percent year over year.

    The latest FDA restrictions on the sector debuted Feb. 6. The FDA raised the legal smoking age from 18 to 21 on Dec. 20. Those restrictions foremost required manufacturers of cartridge-based e-cigarettes, such as Juul Labs Inc., R.J. Reynolds Vapor Co., NJoy and Fontem Ventures, to stop making, distributing and selling “unauthorized flavorings” by Feb. 6, or risk enforcement actions.

    The menthol and tobacco flavors still allowed for cartridge e-cigarette flavorings are the same as those that are legal in traditional cigarettes, the article states.

    Juul’s four-week dollar sales have dropped from a 50.2 percent increase in the Aug. 10, 2019, report to a 31.7 percent decline for the latest report. By comparison, Reynolds’ Vuse was up 62.9 percent in the latest report and NJoy down 14.2 percent.

    Juul has a 57.6% market share, down from 58.9 percent in the previous report. Vuse is at 22 percent, up from 20.4 percent, while NJoy at 5 percent, down from 11.3 percent, and Fontem Ventures’ blu eCigs at 2.7 percent, down from 3 percent.

    Herzog said that NJoy “refutes Nielsen’s data and methodology,” according to the article.

  • U.S. Senate Passes Bill to End Online Sales to Minors

    U.S. Senate Passes Bill to End Online Sales to Minors

    Ded Mityay I Dreamstime.com

    The vote was unanimous. On July 1, the U.S. Senate passed the Preventing Online Sales of E-Cigarettes to Children Act (S.1253) by unanimous consent. The legislation aims end online e-cigarette sales to minors by applying the same measures that are required when traditional cigarettes are purchased online. The House passed its version of the bill last year.

    The National Association of Convenience Stores (NACS) said it strongly supports S. 1253, which “ensures responsible retailing of e-cigarettes and age verification across all channels. The legislation would require online sellers of e-cigarettes to ensure the delivery carrier verifies the age of the recipient upon delivery. It would also require online sellers to collect and remit the appropriate state and local taxes,” according to a story on the NACS website.

    These rules are already in place for cigarettes and smokeless tobacco products purchased over the internet after Congress passes the Prevent All Cigarette Trafficking (PACT) Act, in 2010. Language for vapor products was not included in the law.

    “It’s been long in coming, but finally the Senate has now passed legislation that requires the same proof of age requirement that is needed for tobacco products for e-cigarettes and vaping products, particularly those that are sold over the internet,” stated Senator John Cornyn in his speech on the Senate floor.

    After Wednesday’s vote, the legislation is one step closer to becoming law. Last October, the House passed its version of the bill (H.R. 3942) on suspension. Given that the Senate bill is slightly different than the House version, the House will need to pass the Senate’s version before it can become law, according to NACS.