Thousands of Vape Products Still Sold in the U.S. Despite FDA Ban

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On February 7, it was reported that the U.S. FDA's new ban on flavored e-cigarettes has officially taken effect in the United States, banning flavored e-cigarettes other than tobacco and menthol. Various other types of e-cigarette products and flavors are almost unaffected.

No wonder people think that this new FDA regulation that has already taken effect only regulates air.

New FDA rules will help Juul kill competitors

Of course, everyone with different positions has a different understanding of the above new regulations.

For government agencies led by the Trump administration, they will think that this new rule is a very balanced strategy.

Opponents believe that e-cigarettes are a scourge to lure young people to use them and demand that all e-cigarettes be banned. The e-cigarette industry believes that the industry is beneficial to smoking cessation and involves a large number of jobs, but it cannot deprive adults of their right to choose.
 
Trump faces the 2020 presidential election and cannot offend anyone.

Since all parties are dissatisfied and their opinions are absolute, the government will come up with a relative rule. This will also provide a balance for all parties. Trump is also very good at balancing.

For anti-e-cigarette people and organizations, they believe that the FDA's new regulations are just drizzle. Not only are they useless, they also point out the path and direction for many people how to use e-cigarettes.

For people and organizations in the e-cigarette industry, they believe that the government should not deprive adult smokers of the right to choose seasoning products. For the youth e-cigarette epidemic, measures such as age limits can be adopted to review it.

For e-cigarette users, if you cannot buy flavored and replacement products from retail stores, you can change your habits. For example, you can use disposable e-cigarettes with many flavors. You can also go to e-cigarette stores to buy open filling equipment. Neither of these are prohibited by the new regulations.

So, it seems that the FDA's new e-cigarette regulations really seem to regulate the air?

In particular, Juul, which accounts for 70% of the U.S. e-cigarette market, took the initiative to stop sales of flavored cigarettes as early as August 2019, retaining only tobacco and menthol cigarettes, which is exactly the same as the FDA's new regulations.

Juul also recently stated that it will stop selling flavored cigarette bombs in Canada and the Philippines. Therefore, the market leader no longer sells flavored cigarette bombs. Who are you going to control with this new rule?

Juul has long lost its arm, but for the other brands that occupy 30% of the market share, it is a disaster.

Based on Nielsen's recent retail store e-cigarette data, they expect Juul to also have a 57.6% market share, down from 63.9% reported on November 30.

Who took away its share of the losses caused by Juul's stopping selling flavored cigarettes?

Competitors did not take the initiative to stop selling flavored cigarettes. Instead, they also discounted prices crazily.

NJOY continues to benefit from its discounted pricing program, with sales up 792.5% year-on-year and current market share of 15.3%.

Sales of Vuse, produced by Renault in the United States, increased by 51.4% year-on-year, and its market share increased to 18.2%, making it the second largest market.

Imperial Tobacco's blu brand sales fell 19%, giving it a market share of 4.7%.

However, these three companies will be directly affected by the FDA's new regulations on flavored e-cigarettes, and their market share may soon shrink.

For Juul, the impact will not be great. After all, they have already burned their bridges and decided to reset the e-cigarette category.

Although Altria has continuously written down investment losses by US$8.6 billion, and its valuation has been reduced to US$12 billion, Juul's CEO still believes that Juul is valued at around US$20 billion, and has recently successfully raised US$700 million in convertible bonds. Financing is used for company operations.
 
Although only US$1 billion of Altria's US$12.8 billion investment eventually went into Juul's daily operations, and other funds were arranged and shared by investors and founders, Juul also has an office building worth about US$400 million in San Francisco. It has recently been ready to be sold, and its family is still very rich.

After all, a skinny camel is bigger than a horse.

Therefore, the FDA's new regulations will help Juul speed up the killing of several of the above competitors. Being on the same competitive line, these three companies will probably have a difficult life.# p#pagination title #e#

Imperial Tobacco has warned that due to the poor market, it will not be able to make a penny from the e-cigarette market in 2020.

FDA, are you sent by Juul?)

Thousands of e-cigarettes in four categories will not be affected

Having said the impact on the replacement of e-cigarettes brands, let's talk about other e-cigarettes exempted by the FDA's new regulations, that is, other e-cigarettes exempted this time.

Myers, chairman of the Smoke-Free Children's Movement, is a typical representative of the very angry anti-new regulations. He mainly believes that the new regulations are useless. He said:

Instead of eliminating the flavor e-cigarette market as the government promised in September, the final policy was riddled with loopholes that made thousands of flavor e-cigarette products available in more than 100000 locations across the country, including convenience stores, gas stations and e-cigarette stores. The policy does not protect children, but rather provides e-cigarette manufacturers with a roadmap for continuing to make children addicted to condiments. After February 6, children in the United States will still be able to buy flavored e-cigarettes unless Congress, states and cities take action to ban all flavored products.

The official website of the Smoke-Free Children's Movement Organization lists several categories of fish that have slipped through the net under this new regulation. Two categories are related to China e-cigarette manufacturers.

Category 1: Disposable e-cigarettes leak through the net
 
They believe that the e-cigarette industry has introduced the next new stage of fashion, which is cheap disposable e-cigarettes. These products have more than ten flavors such as strawberry, grape and mango, and have become the new favorite of young people.

Many teenagers choose these devices because of their high nicotine content, wide range of flavors, ease of use and concealment, which attract young people.

Such products include Puff Bar disposable e-cigarette from China, which was launched by GG Company, California's largest e-cigarette wholesaler, and Shenzhen e-cigarette factory. In January, it was rumored that more than 20 million cigarettes were shipped, making it one of the scarier alternatives to Juul.

Similar brands include Stig, Fogg, etc.

We also saw the disposable e-cigarette MOJO from the domestic Magic Flute moti e-cigarette company.

Disposable e-cigarettes, no matter what flavor, are not subject to this new FDA regulation.

Analysts say disposable e-cigarettes account for only 5% of the nearly $15 billion global e-cigarette market, according to data from company ECigIntelligence.

For Shenzhen's e-cigarette factories, seize the limited few months and make quick money by shipping crazily. After all, the PMTA deadline on May 12 is coming.

Category 2: More than 15000 flavored e-cigarette liquids will continue to be widely used
 
There are currently more than 15000 flavors of e-cigarette tobacco oil products on the market.

These flavors often mimic candies, fruits, and have different nicotine strengths, sometimes even higher than the nicotine content in Juul, which provides the equivalent of a pack of cigarettes.

In addition, tobacco oil purchased in bottles is often cheaper than Juul cigarettes, making them more attractive to price-sensitive young people.

Foreign e-cigarette stores only buy two types of products, one is the above-mentioned rich variety of bottled tobacco oil products, and the other is smoking equipment brands from China.

This type of bottled e-cigarette liquid, no matter what flavor, is not covered by the new regulations. The FDA mainly considers that most of the users who enter e-cigarette stores to buy it are adult users, which not only satisfies the choices of these users, but also does not allow more than 10,000 e-cigarette stores to close their doors.

Category 3: Popular open systems will still be widely available, including refillable Juul-compatible cigarettes  
The Smoke-Free Children's Movement believes that after Juul, Smok and Suorin are the most popular e-cigarette devices among high school students.

According to statistics, more than one in ten high school e-cigarette users reported that their preferred brand is Smok or Suorin, with Smok's share of 7.8%, and Suorin's 3.1%.# p#pagination title #e#

These devices are usually sold empty, which is what we often call selling smoking equipment. You can buy thousands of flavors of tobacco oils on the market from e-cigarette stores and freely choose various nicotine concentrations.

In addition, small empty containers compatible with Juul cartridges can also be legally sold and can be filled with open liquid.

So, if you don't choose a heavy smoke smoking set, you can also choose a Juul-compatible small cigarette cartridge for oiling, which is really a perfect circumvention of the FDA's new regulations.

Category 4: Juul and other menthol cigarettes will continue to be widely used
 
The Smoke-Free Children's Movement believes the tobacco industry has known for decades that menthol is attractive to young people because half of young people who try smoking start with menthol-flavored cigarettes.

Compared with tobacco flavor, menthol flavor is the only flavored cigarette bomb left on the market currently with some flavor.

The Wall Street Journal even reported in September that Juul was considering renaming its best-selling mint flavor to menthol to keep it on the market, and given loopholes in FDA guidance, other brands are sure to follow suit.

Therefore, the new regulations on e-cigarettes that came into effect by the FDA this time are basically trivial. After all, Trump does not want to explicitly offend a certain group of voters.

However, e-cigarette companies should not be happy too early. This new rule is in name but the PMTA application on May 12 may kill everyone.

PMTA truly determines the fate of e-cigarette companies

Americans also know very well how to strategize and win thousands of miles away.

The final application deadline for PMTA is May 12, and there are still three months before everyone wants to sell e-cigarettes in the U.S. market.

PMTA, Premarket Tobacco Application, stands for tobacco pre-market application. Only after obtaining PMTA certification can you continue to sell.
 
From the beginning of the application, the FDA has six months to review the application.

Products for PMTA application include: tobacco oil, electronic smoking sets, kits and related accessories and components.

That is to say, any product that wants to enter the U.S. e-cigarette market, tobacco oil, smoking equipment, needs to apply for PMTA. This is undoubtedly an additional expense and uncertainty for China's large-smoke e-cigarette manufacturers that have already entered the European and American e-cigarette markets.

For disposable e-cigarette Puff Bars, it is worth weighing whether to transfer to the underground black market to continue making quick money or to apply for PMTA in a decent manner in exchange for continued sales during the review period.

For Yuexie, a re-loaded e-cigarette brand like Juul, it also needs to think about whether it is necessary to spend tens of millions of dollars to show off their muscles in the U.S. market.

If it passes, it can be sold in the United States, proving that the product meets American standards and has strong endorsement. If it fails, it may have a negative impact.

After all, according to the VUSE product that has been submitted to PMTA, they have organized a team of more than 100 people to organize data and prepare documents, and the final material reaches 150,000 pages.

It takes time, energy and money, and e-cigarette companies are too difficult, but this industry is related to public health and controversy.

Wealth comes from danger. E-cigarette brands with rich people really cannot be intimidated and have to go head-on.

However, a very realistic and cruel test is that due to the impact of the Wuhan pneumonia epidemic, it has become difficult for China e-cigarette brands to send domestic people to the United States to jointly apply for PMTA.

Putting aside whether there are currently suitable flights between China and the United States and whether they meet the requirements for entering the United States, it is really too difficult to quarantine them for 14 days after landing in the United States.

An unexpected black swan not only makes China's e-cigarette industry difficult at home, but also makes it worse in the international market.

No matter what, if you can, hold on first. If you can't, you will not be considered deserters even if you withdraw.

There are many talented children in Jiangdong, but it is unknown that they will make a comeback.