Week of March 17 Regulatory Intelligence Recap

Trade Press and Regulatory Summary:

• Smokeless products primed to overtake cigarettes in sales - Winston-Salem Journal

  • According to Altria, the leading three unregulated brands by market share are Zone, Fre and Juice Head, along with Elf Bar, Breeze and Mr. Fog.

  • “Over the next decade, we anticipate a significant shift in the nicotine landscape whereby smoke-free products overtake combustibles to become the primary driver of industry growth,” Goldman Sachs tobacco analyst Bonnie Herzog wrote in a “deep dive” investor report last week. Herzog projected that for all tobacco and nicotine industry products, traditional cigarette volumes will decline from 47% in 2024 to 20% by 2035, while overall industry revenues are projected to decline from 70% in 2024 to 50% in 2035 for traditional cigarettes. “By 2035, we expect e-vapor to drive 42% of U.S. nicotine equivalized volume, up from 36% today,” Herzog said. “This implies that by 2035, e-vapor will be the largest volume segment in U.S. nicotine, although less than 20% in terms of revenue and less than 15% of operating profit.” “We expect that BAT will remain the largest branded player in vapor, but the category will deliver softer growth relative to other reduced-risk categories,” Herzog said.

  • Meanwhile, Herzog expects Altria to stop selling NJOY, effective March 31, per the unfavorable International Trade Commission ruling in its litigation with JUUL.”

• Unpacking The Illicit E-Cigarette Crackdown By State AGs - Troutman Pepper Locke

  • In mid-January, a bipartisan coalition of nine state attorneys general, as well as the Washington, D.C., attorney general, announced a coordinated effort to curb illicit electronic cigarette sales. The attorneys general of California, Connecticut, Illinois, Hawaii, Minnesota, New York, New Jersey, Vermont, Ohio and Washington, D.C., are coordinating enforcement activity targeting dealers of these products — issuing warning letters, serving civil investigative demands and filing complaints.

• FDA staff return to crowded offices, broken equipment and missing chairs - AP

  • The Associated Press spoke with more than a half-dozen FDA staffers who described long lines to park and clear security, followed by hours of hunting for space and supplies in offices that were not designed to accommodate the agency’s full workforce. The staffers spoke on condition of anonymity because they were not authorized to speak with the media.

    One staffer described “chaos and lost work hours” for commuting, security lines and shuffled office space.

    About half the FDA’s 20,000 scientists, attorneys, inspectors and support staff report to the agency’s main campus in White Oak, Maryland, which until the late 1990s was a naval weapons testing facility.

• Reynolds American adding 300 jobs for expansion of oral nicotine production in Tobaccoville - Triad Business Journal 

  • Velo Plus synthetic nicotine roll-out leads to new manufacturing and sales jobs in the Triad

• Dr. Makary – Create a Marketplace of Innovative Nicotine Products (Series Article #5) - Matt Holman -VP at PMI

  • The slow and unpredictable pace at which CTP processes applications creates a significant problem for manufacturers.  When the authorization process is delayed or unpredictable, it becomes extremely difficult for companies to introduce new products to the market.  This lack of clarity and predictability is a major deterrent to innovation.  Manufacturers are hesitant to invest in research and development if they don’t know when, or even if, their products will be authorized.  Without a clear path forward, many companies may be reluctant to develop new products or improve upon existing ones, fearing that they will face years of regulatory delays with no guarantee of success.  As a result, the potential for innovation is severely constrained, and smokers who would benefit from these new products are left without alternatives.  Moreover, this uncertainty creates a competitive disadvantage for U.S. companies.  While the U.S. regulatory process stagnates, companies in other countries are introducing innovative nicotine products that are already being adopted by smokers. 

• 3 Takeaways From Goldman Sachs Fourth-Quarter 2024 Nicotine Nuggets Survey - CSP

  • Downtrading Pressure Persists - Bonnie Herzog outlined key contributors to cigarette volume declines, including the category out switching to smoke-free alternatives, including illicit flavored disposable e-vapor products.

  • C-Store Trips - Herzog said survey results show that 58% of retailers and wholesalers report c-store trips for tobacco products were lower in fourth-quarter 2024 than third-quarter 2024.

  • Fuel Prices - “If gas prices remain low, we could see a recovery in the convenience-store channel,” she said. “Inside sales for the c-store industry in 2024 were negative. The last time they were negative was more than 20 years ago.”

Publications Summary:

• Cohen G, Cook S. Observational studies of exposure to tobacco and nicotine products: Best practices for maximizing statistical precision and accuracy. iScience. 2025 Feb 8;28(3):111985. doi: 10.1016/j.isci.2025.111985. PMID: 40104063; PMCID: PMC11915159.

  • The objective of this analysis was to evaluate the precision and accuracy of recent studies and to identify opportunities for further optimizing future study designs. The ROBINS framework for minimizing statistical bias was translated to specific considerations that spanned the selection and quantification of cohorts, exposure, and outcomes.

2024 and 2025 YTD FDA Tobacco Sales Compliance Checks - Underage Purchase Data Analysis for Brick-and-Mortar Retail

Takeaways from the analysis:

• Violation Rate Trend:

  • The underage tobacco purchase violation rate decreased from 14.53% in 2024 to 11.61% in 2025 YTD.

• Top Brands:

  • The top brands cited in violations remained relatively consistent between 2024 and 2025.

  • "Other," "Swisher," and "Black & Mild" were among the top three brands in both years.

  • Marlboro and Newport also remained in the top 5 for both years.

• States with Most Violations:

  • The states with the highest number of violations were:

    • NJ (New Jersey)

    • NY (New York)

    • FL (Florida)

    • TX (Texas)

    • IL (Illinois)

• States with Highest Violation Percentages:

  • When considering the percentage of violations relative to the total checks, the states with the highest percentages were:

    • PR (Puerto Rico)

    • VI (U.S. Virgin Islands)

    • VA (Virginia)

    • MD (Maryland)

    • NC (North Carolina)

State Legislative E-Cigarette Directory Bill Updates for March 2025

Below is a high-level overview of legislative activity related to e-cigarette or “vapor” registry bills (often referred to as "Directory" bills) in March 2025, based on the NATO Legislative Monitor and cross-referenced with typical legislative tracking sources like LegiScan. The table focuses on bills categorized under "Directory" that had activity in March 2025. Only relevant entries with explicit March 2025 dates or implied activity (e.g., hearings or committee actions) during this timeframe are included. It may not be an exhaustive list of activities.

Key Observations:

1. Active States: Tennessee (SB763 and HB968) showed significant activity with committee deferrals on 3/18/25 and 3/19/25, respectively, indicating ongoing deliberation. Arkansas (SB252), South Carolina (SB287), and Kentucky (SB100) had favorable committee actions or progression to the Governor in March.

2. Mixed Scope: Some bills (e.g., Florida HB785, New Mexico SB20) are not strictly "directory" bills but relate to e-cigarette regulation (e.g., taxation), reflecting broader legislative interest in March 2025.

3. Pending Actions: Several bills, like West Virginia’s SB816 (introduced 3/19/25) and North Carolina’s HB385 (referred 3/13/25), were in early stages, suggesting potential further activity beyond March.

Grok 2, an AI assistant developed by xAI, was used to analyze the data and streamline this review process