Week of February 2 Regulatory Intelligence Recap

Trade Press and Regulatory Summary:

U.S. Federal and State-Level Updates

Federal Updates

• FDA Oversight & Staffing: A GAO report highlights that the FDA is facing significant challenges due to staffing shortages and increased responsibilities, particularly in regulating nicotine products. Concurrently, the Department of Health and Human Services (HHS) has proposed reducing the FDA’s workforce by approximately 3,500 staff members as part of a reorganization directive.

• Illicit Vapes & National Security: A group of Senate Republicans has warned the Trump administration that illicit e-cigarettes imported from China may pose national security risks, including potential use for spying and money laundering for cartels.

• FDA PMTA Roundtable: The FDA has invited IKE Tech LLC to participate in an invitation-only roundtable focused on Premarket Tobacco Product Application (PMTA) submissions for small electronic nicotine delivery system (ENDS) manufacturers.

State-Level Updates

• Delaware: Governor Matt Meyer’s budget proposal includes raising tobacco taxes to bridge a state revenue gap, though policy experts warn the move could be regressive and disproportionately affect lower-income residents.

• Florida: A new bill proposes a broad ban on smoking and vaping in most public places statewide, extending definitions to include areas such as sidewalks, parks, and beaches.

• Georgia: Anti-smoking advocates are campaigning for an increase in the state's tobacco tax—currently one of the lowest in the nation—arguing it would raise significant revenue and reduce consumption.

• Iowa: Governor Kim Reynolds has proposed a tax plan that includes raising the cigarette tax to the national average and introducing a new 15% tax on vaping products and consumable hemp.

• New York: Governor Hochul’s budget proposal seeks to extend the state’s 75% tobacco tax to alternative nicotine products like Zyn. Business groups argue this could drive consumers to the black market.

• Oklahoma: The Department of Corrections plans to allow inmates to purchase disposable nicotine vapes and pouches starting in 2026 to combat contraband-related debt and violence.

• Washington: State lawmakers are considering significant tax hikes, including a 66% increase in the cigarette tax and a new 95% tax on the taxable sales price of vapor products.

• West Virginia: The state is exploring an increase in taxes on e-cigarettes and vaping products to 50%, effective July 1, 2026.

• Vape Waste Legislation: California, New Jersey, New York, and Missouri are advancing legislation and pilot programs to address safety concerns regarding vape waste and battery fires at recycling facilities.

Trade Press and Industry Developments

• Earnings: Philip Morris International released earnings for Q4 2025 and full-year 2025.

  • Full Year Net Revenues: $40.6B (+7.3% reported, +6.5% organic). Q4 Net Revenues: $10.4B (+6.8% reported).

  • ZYN full-year shipments: 794M cans. ZYN Q4 shipments: 196M cans.

• Market Trends: Reports indicate that smoke-free products are nearing 50% of the total nicotine market and are projected to reach 75% within a decade, driven largely by industry innovation. The market for vaporizers and ENDS is forecast to reach $24.7 billion by 2030.

• Corporate Restructuring: Philip Morris International is closing its Richmond, VA office, resulting in 135 job cuts, as part of a restructuring effort to focus on smoke-free products. Conversely, Reynolds American is adding 300 jobs in Tobaccoville to expand oral nicotine production.