Latest E-Cigarette Policy Developments in the U.S., China, and Worldwide

Since the outbreak of e-cigarette-related lung disease in the United States at the end of August this year, the number of cases and deaths have continued to rise. According to data from the U.S. Centers for Disease Control and Prevention (CDC) as of October 1, 1080 cases of lung injury related to the use of e-cigarettes or fogging have been reported, covering 48 states and the U.S. Virgin Islands, and 18 deaths occurred in 15 states.
 

About 78% of cases have a history of using THC-containing products, and the latest national and local survey results suggest that THC-containing e-cigarette products may have played a role in lung disease outbreaks.

The CDC currently suspects that these lung diseases are related to a certain chemical, but it is unclear what the chemical is. No single product or ingredient has been found to be associated with lung damage. Users may not know what is in e-cigarettes or tobacco oil. Products on the market come from complex supply chains and may even contain illegal ingredients. To understand the cause, more information is needed.

Without clarifying the cause of the disease, the CDC made cautious recommendations. See Dots 'previous article,"FDA's Latest Warning: Stop Using Electronic Cigarettes and Street Electronic Cigarettes Containing THC." This is also in line with the current temporary regulatory trend in various states in the United States. This article once again combs the regulatory trends of e-cigarettes at the federal and state levels in the United States, as well as the regulatory policies and trends of e-cigarettes in China and other countries around the world.

01. Regulatory trends in the United States

1. Trends at the White House, Congress, and federal levels

Starting from August 8, 2016, the U.S. Food and Drug Administration (FDA) required the regulation of e-cigarette products as tobacco products. See the previous article by Dots Institutional Investor Community,"FDA Releases Guidelines for the Listing of E-Cigarettes, a Review of U.S. E-Cigarette Regulatory Policies."

On September 25, 2019, the FDA issued the proposed PMTA bill on its official website,"Premarket Tobacco Product Applications and Recordkeeping Requirements". This proposed bill expands the regulation of the categories of tobacco products sold in the United States and clearly includes e-cigarettes in the PMTA process. If the product has a positive effect on promoting national health (both smokers and non-smokers), the FDA will approve the PMTA marketing application for the product.

On September 11, 2019, U.S. President Trump said that the federal government is considering banning non-tobacco flavors of e-cigarettes to deal with the problem of young people using e-cigarette products. But two days later, Trump seemed to have retreated. He tweeted: While I like e-cigarettes instead of cigarettes, we need to make sure this alternative is safe for everyone! Let's get counterfeit goods off the market and keep children away from e-cigarettes!& rdquo;  
On September 17, Alex Azar, Secretary of Health and Human Services, who is responsible for the FDA and CDC, tweeted: Our e-cigarette plan can be summarized as follows: 1. Adults can still use flavored tobacco products;2. Tobacco companies can submit flavored tobacco products to the FDA for review;3. Flavoured e-cigarettes that are attractive to children are not allowed to be sold on the market until they are approved. rdquo;

Before the outbreak of lung disease, Congress had introduced a number of bills, including banning online sales, forcing the e-cigarette industry to pay user fees to the FDA, enacting the National Tobacco Law 21, regulating synthetic nicotine, restricting advertising, or combining these. Recently, senators from both parties gathered together to discuss strict rules to limit e-cigarette hardware and impose a federal tax on e-cigarette products.

(2) State and city regulatory policies
 
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San Francisco: San Francisco announced a complete ban on the sale of e-cigarettes on June 25. The ban will take effect in January, making San Francisco the first city in the United States to ban the sale of e-cigarettes.

Michigan: The governor of Michigan issued an administrative ban on the sale of flavored e-cigarettes on September 4, but not tobacco-flavored products. The ban will take effect in 180 days. Michigan has become the first state in the United States to ban the sale of flavored e-cigarettes.# p#pagination title #e#

New York: The governor of New York issued an emergency executive order on September 15, banning the sale of flavored e-cigarettes other than tobacco flavor and menthol in the state, and raising the purchase age of e-cigarettes from 18 to 21. The ban takes effect immediately. But the New York State Court of Appeals temporarily lifted the New York governor's proposed ban on flavored e-cigarettes on October 3, and the ruling will last until at least October 18, when the parties will return to court again to discuss the matter.

Arkansas: Republican State Senate President Jim Henren will introduce a bill to impose a 67% wholesale tax on atomizer products and supplement the state's Clean Indoor Air Act. Arkansas's Legislature won't hold a regular session again until 2021, but Henren proposed holding a special session this year. Hendron also proposed a value-added tax at the last legislative session.

California: Gov. Gavin Newsom announced a $20 million publicity campaign and said next year he will work with the state Legislature to ban flavored e-cigarettes statewide. He also ordered regulators to find ways to ban illegal and counterfeit products.

Los Angeles County: Los Angeles County voted on October 1 to ban flavored tobacco products, including mint flavors, and requires tobacco and e-cigarette retailers to obtain new county business licenses for an initial fee of $778 and an additional fee of $142 every two years thereafter. The ban will take effect within 30 days, and e-cigarette stores have 180 days to clear their stocks of flavored e-cigarettes. At the same time, the county's regulatory board also urged California Governor Gavin Newsom to pass a statewide ban on e-cigarettes. Los Angeles County lawyers said under the ordinance, online sales of e-cigarettes will not be banned and users will not be punished.

Massachusetts: On September 25, Massachusetts Governor Charlie Baker issued an emergency public health ban, temporarily banning the use of all aerosolized products, including nicotine and marijuana, flavored and non-flavored products. Massachusetts was the first state to ban THC oil-atomized products after recreational marijuana sales were legal in the state. On October 4, the U.S. federal court held a hearing. Although the ban was not rejected, a comprehensive hearing will be held on whether it is necessary.

Connecticut: Democratic Rep. Jonathan Steinberg of Connecticut told the Connecticut Mirror: We will be prepared, we have written the ban on flavored e-cigarettes. rdquo;

Oregon: Oregon issued a temporary ban on the sale of all flavored e-cigarette products and additives related to e-cigarette lung disease for a 180-day ban on October 4.

Washington, D.C.: A majority of members of the Washington, D.C. Legislature co-sponsored a bill to ban flavored e-cigarette products. Another bill proposes banning sales at any retailer other than a medical marijuana pharmacy or pharmacy.

Utah: Utah health officials issued an emergency rule on October 2 that prohibits general tobacco retailers, including grocery stores, pharmacies and gas stations, from selling flavored nicotine e-cigarette products, and all tobacco sellers will be required to post notices about the dangers of distributing unregulated THC. Retailers need to implement the ban by October 7.

Florida: Rep. Jackie Toledo, R-Florida, has introduced a bill that would ban flavored e-cigarettes and change the legal purchase age to 21. The bill will not be heard until the 2020 legislative session.

Illinois: Republican State Rep. Grant Wehrli has introduced a bill that would ban the sale of flavored e-cigarettes and tobacco products. Republican Rep. Dan Utaste told TV station KHQA: I don't know why flavored e-cigarettes exist. rdquo; In my opinion, it's just to attract young people." rdquo;

Mississippi: Mississippi Democratic Attorney General Jim Hood (a candidate for governor in 2020) has called for a complete ban on the use of e-cigarette devices.

Kansas: More than 25 cities and counties in Kansas have passed bills raising the age for purchasing nicotine products from 18 to 21, and lawmakers and advocates say a statewide law could be passed next year.

Montgomery County: A bill has been introduced to ban e-cigarette stores within a half-mile radius of the county's middle or high school. If passed, the law would close almost all e-cigarette stores in wealthy areas of Maryland.

New Jersey: Democratic Senate Chairman Steve Sweeney of New Jersey has announced his intention to ban all aerosolized products completely. Sweeney said he will phase out the ban over a few years.# p#pagination title #e#

Ohio: Gov. Mike DeWine is exploring whether he has the authority to ban flavored e-cigarettes.

Rhode Island: Under October 4 emergency regulations, it will be illegal to manufacture, distribute or sell flavored e-cigarette products in Rhode Island for the next four months.

City of San Jose: Democratic Congressman Magdalena Carrasco called for a complete ban on all e-cigarette products. She also plans to ban other flavored tobacco products, but will retain sales of tasteless cigarettes.

South Carolina: Democratic Representative Beth Bernstein and Republican Representative Kirkman Finlay will jointly introduce a bill in next year's legislative session to ban flavored e-cigarette products.

Vermont: Gov. Phil Scott said he will focus on the federal government's actions. Scott already supported legislation earlier this year that forced e-cigarette shops to leave Vermont.

02. China's e-cigarette supervision trends

Our country is regulating the e-cigarette market to establish a healthy and standardized e-cigarette environment. Please refer to the previous article by the Dots Institutional Investor Community,"The Most Comprehensive Analysis of E-Cigarettes: Where will the barbaric growth of e-cigarettes go?"

It is worth noting that on August 30, 2018, in the "Notice on Prohibiting the Sale of E-Cigarettes to Minors" issued by the State Administration for Market Regulation and the State Tobacco Monopoly Administration, the sales management standards for e-cigarettes are consistent with those for cigarettes.

On September 20, 2019, the State Tobacco Monopoly Administration also quoted the Tobacco Monopoly Law when answering questions from netizens about whether e-cigarette production required approval. (It is not sure whether the e-cigarette referred to in this question and answer is an ENDS e-cigarette or a HNB heating and non-burning new tobacco like IQOS)
 
However, Caixin. com reported at the end of September 2019 that the Tobacco Monopoly Bureau has begun to implement license management for e-cigarette production companies and will issue 30 production certificate licenses. About 5 companies have obtained this license, but e-cigarette companies are reluctant to mention the issue of licenses. In fact, the so-called e-cigarette manufacturing license is just recognition of e-cigarette brands selling e-cigarettes. The actual manufacturing of various e-cigarette brands on the market in China is all entrusted to foundries, and 90% of e-cigarettes are completed by several factories in Shenzhen.

According to Caixin.com, the national standard plan "E-Cigarette" was formulated in October 2017 and is expected to be released in October 2019. The approval draft of the national standard plan "E-Cigarette" obtained by Caixin reporter shows that in terms of tobacco oil, the standard plan is expected to ban the use of substances that claim to have special functions such as being beneficial to health, increasing energy or reducing harm, and provide food safety for tobacco oil additives. National standards must meet the requirements. In addition, the concentration of nicotine in tobacco liquid will also be clearly specified, with a content of 20mg/ml. The approval draft of "E-Cigarette" also shows that in the future, the product labeling of e-cigarettes will also clearly indicate warnings and hieroglyphs warning dangers that are prohibited from being sold to minors.

03. E-cigarette regulatory trends in other countries

India is the world's second largest tobacco market. As several states in the United States have introduced restrictions on e-cigarettes, it will also crack down on e-cigarettes.

On September 18, 2019, Indian Finance Minister Nirmala Sitharaman announced at a press conference that in the next few days, the Indian government will issue an emergency injunction to ban the manufacturing, import, export, transportation, sales, storage, promotion, etc. of e-cigarette products. Sitaraman said that considering the impact of e-cigarettes on public health, especially on the health of young people, a decree will be issued to completely ban e-cigarettes.

Recently, New Zealand Deputy Health Minister Jenny Salesa said she would introduce legislation to the House of Representatives to ban most flavors of flavored e-cigarettes and allow only three flavors, including tobacco, menthol and mint.

Malaysia's Deputy Minister of Health Li Wencai said recently: We are drafting a new tobacco ordinance mainly to consolidate all tobacco products, including traditional cigarettes, e-cigarettes, vape and shisha, under separate ordinances. At that time, the government will also remove the regulations on cigarettes under the Food Ordinance and incorporate them into the new Tobacco Ordinance. rdquo;

However, some countries have also expressed support for e-cigarettes. Recently, in the Birmingham region of northern England, two largest medical institutions opened e-cigarette sales outlets and began selling e-cigarettes. This measure is mainly to implement the comprehensive smoking ban in hospitals and replace cigarettes with e-cigarettes, giving smokers a way to transition and replace them. According to plans formulated by the British government, it aims to enable all smokers of traditional cigarettes in the UK to switch to e-cigarettes by 2030. It can be said that the e-cigarette industry has fully entered the fast lane in the UK.# p#pagination title #e#