“2023: A Year of Regulatory Challenges and Misinformation in the International E-Cigarette Industry”
2023 has been a year of enduring tests for the e-cigarette industry, marked by regulatory challenges and the continuous spread of misinformation. Despite facing setbacks, the market has resiliently grown as a global entity. However, differing regulatory views on the harm reduction potential of e-cigarettes continue to hinder their acceptance among smokers. The past year has also been dubbed “The Great Escape” due to the closure of several e-cigarette retailers and manufacturers. Despite challenges, an increasing number of former smokers continue to quit smoking.
Despite bans, regulations, and strict controls in several countries, the most significant impact on the industry this year came from the United States, where numerous premarket tobacco product applications (PMTAs) were rejected. The FDA’s ban on most e-cigarette products led to a black market for disposables, worth billions of dollars. According to ECigIntelligence, disposables account for nearly 40% of the global e-cigarette market.
Critics have accused the industry of shirking responsibility for the environmental damage caused by disposable e-cigarettes, while federal regulatory bodies have failed to implement measures to make e-cigarette components more recyclable or environmentally friendly. Some regulations have been proposed to reduce the products’ environmental impact, such as setting standards for them to be reusable or requiring manufacturers to fund collection and recycling programs.
Data from the Centers for Disease Control and Prevention (CDC) show that disposables currently account for about 53% of the multi-billion-dollar U.S. e-cigarette market, more than doubling in size since 2020. Several states, including New York and California, have extended product liability laws to computers and other electronics, but these regulations do not apply to e-cigarette products. At the federal level, there are no specific regulations for handling e-cigarette products. Some experts warn that without action, this destructive environmental impact could last for centuries.
Misinformation surrounding the e-cigarette industry continued to spread in 2023. A Rutgers University study showed that nearly half of smokers and young adult nonsmokers believe that nicotine-containing e-cigarettes contain the same or more harmful chemicals than regular tobacco cigarettes.
Another study found a lot of exaggeration and misinformation about e-cigarettes on social media. Some tweets exaggerated or distorted claims about nicotine and addiction, while others misinterpreted scientific research to promote e-cigarette use. Some tweets downplayed the harmful effects of nicotine and promoted its benefits, posing a potential issue. Here are the biggest e-cigarette industry headlines of 2023, reviewed month-by-month.
January
- UK-based upscale grocer Waitrose stopped selling disposable e-cigarette products due to environmental concerns.
- The U.S. FDA said it would decide “in a few months” how to regulate legal cannabis (no decision yet).
- Vaposso became the first brand to gain the ability to sell open-system e-cigarette devices in the UAE.
- The Netherlands banned flavors, and Belgium announced plans to restrict flavor names and e-cigarette devices.
- The World Journal of Oncology retracted a 2022 article claiming that e-cigarette users face the same cancer risks as combustible cigarette smokers.
- Taiwan’s legislature banned e-cigarette products.
- A U.S. district judge preliminarily approved a $255 million settlement agreement resolving consumer allegations of deceptive sales of e-cigarettes by Juul Labs.
February
- Hong Kong began enforcing a ban on CBD, classifying it as a “dangerous drug” and imposing severe penalties on those possessing CBD.
- The Bloomberg Philanthropies pledged $420 million over four years to the “Bloomberg Initiative to Reduce Tobacco Use.”
- Australia rescheduled psychedelics psilocybin and MDMA for people with PTSD.
- Connecticut sued five companies selling delta-8 products.
- Alex Norcia left Filter to work at Altria.
- RAI Services Company submitted a citizen petition asking the FDA to adopt a new enforcement policy for “illegally sold disposable electronic nicotine delivery system [ENDS]” products.
- Former RTI International chief scientist and director of the health analytics center Matthew Farrelly was appointed director of the scientific office at the FDA’s Center for Tobacco Products (CTP).
- The FDA issued its first civil fine for the illegal sale of ENDS products.
March
- Altria Group exchanged its entire investment in Juul Labs for a non-exclusive, irrevocable global license to certain Juul heated tobacco intellectual property. Altria also agreed to acquire Njoy Holdings for about $2.75 billion and asked the U.S. Federal Trade Commission (FTC) to drop its 2020 challenge to the company’s 2018 acquisition of a 35% stake in Juul Labs.
- The U.S. FDA proposed new requirements for the manufacture, design, packaging, and storage of e-cigarettes and other tobacco products to tobacco product manufacturers.
- RLX Technology revealed that its financial performance for 2022 was
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severely impacted by China’s new industry regulations and e-cigarette tax as well as disruptions related to COVID-19. A U.S. federal judge dismissed a tobacco industry lawsuit against California’s statewide ban on the sale of flavored e-cigarettes and other tobacco products. The FDA updated the definition of “tobacco products” to include non-tobacco nicotine products. After a stay order was issued by the Federal Fifth Circuit Court of Appeals, R.J. Reynolds Vapor Company was allowed to continue selling two menthol-flavored Vuse products that had received marketing denial orders (MDOs). Argentina banned the import and sale of ENDS products. Former CTP Director Mitch Zeller joined the advisory board of Qnovia, a “platform pharmaceutical” company developing a prescription inhalable smoking cessation therapy.
April
- Malaysia removed nicotine-containing e-liquid in e-cigarettes and other vaping products from its list of toxic substances in the country.
- Greenlane Holdings Technology Company completed a $16.5 million Series B funding round, with its “strategic investment group” including Organigram Holdings, a Canadian cannabis producer invested in by BAT.
- Vuse’s U.S. market share increased from 41.5%, while Juul’s market share decreased to 26.1%.
- The UK announced plans to offer 1 million smokers free e-cigarette starter kits to encourage them to quit tobacco products.
- Juul Labs settled with six states over youth marketing lawsuits, bringing the total state settlements to over $1 billion across 45 states.
- Panama rejected a proposal to regulate e-cigarette products.
- The London High Court ruled that a patent protecting Philip Morris Products’ heated tobacco technology is valid.
- Delaware became the 22nd U.S. state to pass a recreational cannabis law.
May
- Australia announced it would ban the import of all non-prescription e-cigarette products, including those without nicotine.
- Reynolds sent letters to several small vape shops, threatening lawsuits if they didn’t stop selling flavored vaping products.
- A report in the UK showed that prisoners spend over £7 million ($8.5 million) annually on e-cigarettes.
- Logic Technology Development challenged the FDA’s marketing denial of its menthol e-cigarette products.
- Altria Group reached a $235 million agreement to end a California lawsuit accusing the company of marketing e-cigarettes to young people.
- Flonq launched the world’s first fully recyclable e-cigarette device – Flonq Plus-E.
- Yolanda Richardson succeeded Matthew Myers as president of the Campaign for Tobacco-Free Kids.
- The FDA issued “Import Alert 98-06,” detaining new tobacco products, including e-cigarettes, not licensed for sale at the border.
June
- A Hawaiian law made transporting e-cigarettes and other tobacco products valued over $10,000 a misdemeanor.
- ANDS launched Slix, a disposable e-cigarette claimed to be 99.29% recyclable.
- Bidi Vapor began shipping Bidi Sticks to over 900 Kwik Trip and Mapco locations.
- A federal appeals court ruled the FDA’s refusal to allow Magellan Technology to market flavored e-cigarette products was reasonable.
- The FDA warned 189 retailers about selling unauthorized tobacco products, particularly Elf Bar and Esco Bars brands. Zanzibar banned the use and import of e-cigarette products. CTP announced significant progress in implementing improvement plans based on recommendations from the Reagan-Udall Foundation.
The ongoing challenges, coupled with misinformation and evolving global policies, indicate a tumultuous path ahead for the e-cigarette industry. Innovations and regulatory changes are expected to continue shaping the market, with a focus on harm reduction and environmental sustainability playing key roles in future developments. For more detailed analysis and updates on the e-cigarette industry
July
- Juul Labs requested the U.S. International Trade Commission (ITC) to ban the sale and import of Njoy Ace vapor devices, alleging patent infringement.
- The U.S. Federal Trade Commission dismissed a complaint against Njoy’s parent company, Altria Group, for its acquisition of a 35% stake in Juul Labs following Altria’s exit.
- New York City filed a lawsuit against Magellan Technology Inc., Ecto World LLC (Demand Vape), Mahant Krupa 56 LLC (Empire Vape Distributors), and Star Vape Corp. for selling illegal flavored e-cigarettes and engaging in fraud.
- Jason Carignan moved from Chemular to work at Altria.
- The FDA awarded $3.9 million to the Ohio State University Comprehensive Cancer Center to assess the impact of e-cigarette flavors on smoking behavior among current adult smokers.
- Philip Morris International acquired Israeli company Syqe Medical for approximately $650 million.
- Juul Labs submitted the PMTA for its Juul2 system to the FDA.
- China’s State Tobacco Monopoly Administration issued guidelines for e-cigarette exports.
- The journal Gastroenterology Research retracted a study linking nicotine e-cigarettes to liver diseases.
- The FDA issued more warning letters for the sale of Esco Bar and Elf Bar products.
- In the first half of 2023, China’s e-cigarette exports exceeded $3.36 billion.
August
- Ukraine imposed an excise tax on disposable e-cigarettes.
- Venezuela banned all e-cigarette products.
- The Philippines passed a law mandating importers of raw materials for e-cigarette products to seek special clearance.
- High Light Vape, a company selling e-cigarettes disguised as highlighter pens, faced severe media backlash.
- Njoy requested the ITC to prohibit the import and sale of certain Juul products.
- New Zealand introduced new regulations to restrict youth vaping.
- The Asia Pacific Tobacco Harm Reduction Advocates Alliance released a shadow report on the failure of the World Health Organization’s tobacco harm reduction strategy.
- Juul Labs announced a company restructuring aimed at reducing operating costs.
- Romania banned the addition of flavors in heated tobacco products.
- Suriname banned the sale of all e-cigarette products.
- The U.S. Court of Appeals for the District of Columbia Circuit supported Fontem US in a ruling, affirming that the FDA failed to conduct proper analysis before denying some e-cigarette products’ marketing applications.
September
- The UK Vaping Industry Association announced it would exclude tobacco companies from its membership.
- Indonesia legalized e-cigarettes.
- The manufacturer of Esco Bars sued the FDA over an import ban on its products.
- Vaposso became the first authorized company to sell open-systems in the UAE.
- New York State opened state cannabis licenses to the public.
- The FDA issued warning letters to 15 companies selling brands including Elf Bar, EB Design, Lava, Cali, and Bang.
- A fire destroyed the UK e-cigarette and hardware brand Dinner Lady’s factory.
- Spiire announced that its revenues for cannabis and tobacco e-cigarette products increased by 100.4% and 10.9%, respectively, in the 2023 fiscal year.
- Healthy Choices Management Corp. sued R.J. Reynolds Vapor Co., seeking royalties from the sales of its Vuse Alto e-cigarette pens, chargers, and pre-filled e-cigarette capsules, alleging patent infringement.
- The FDA imposed civil fines on 22 retailers illegally selling Elf Bar/EB Design products.
October
- Philip Morris International launched LEVIA, a tobacco-free stick for use with its IQOS heat-not-burn device.
- A new study titled “Impact of Flavor Restrictions on Tobacco Product Sales” found flavor bans promoted the sale of traditional combustible cigarettes.
- UK Prime Minister Rishi Sunak proposed a tobacco endgame plan.
- The U.S. Supreme Court refused to hear Avail Vapor’s arguments against the FDA’s regulatory authorization process.
- ECigintelligence reported that disposables account for nearly 40% of the global e-cigarette market.
- The American E-cigarette Association ceased operations; Greg Conley joined the American Vapor Manufacturers Association.
- The FDA denied marketing orders for flavored Vuse Alto pods.
- Elf Bar rebranded to combat the U.S. import ban.
- Njoy sued 34 domestic and foreign manufacturers, distributors, and online retailers of illegal disposable e-cigarette products.
- Logic Technology Development lost a court appeal to stop the FDA’s ban on its menthol pods.
- The Czech Republic banned the addition of flavors in heated tobacco products.
- Altria stated that the booming market for illegal disposable flavored e-cigarettes significantly reduced sales of its authorized e-cigarette products.
November
- Italy’s Lazio Regional Administrative Court (TAR) suspended an ordinance that would have classified CBD oil as a narcotic substance until January 16, 2024.
- According to Strait Research, the global
e-cigarette market is projected to reach a value of $93.94 billion by 2030, with a compound annual growth rate of 16.27% from 2022 to 2030. BAT announced a $90.5 million investment in Organigram. Ohio became the 24th U.S. state to permit adult non-medical use of cannabis. A United Nations study showed that toys contribute to more electronic waste than e-cigarette products. The FDA issued additional warning letters to online retailers for selling disposable products from brands like Elf Bar, EB Design, Bang, Cali Bars, and Lava. The 10th Conference of the Parties (COP10) to the WHO Framework Convention on Tobacco Control was postponed due to unrest in the host country, Panama.
The Louisiana Office of Alcohol and Tobacco Control released a list of nearly 400 e-cigarette products approved for legal sale in the state. Juul Labs raised approximately $1.3 billion in funding. In the quarter ending September 30, Ispire Technology reported revenue of $42.9 million and a gross profit of $6.9 million. The FDA intensified penalties for violations of federal nicotine product laws. PMI expanded IQOS Iluma in the Middle East. New Zealand’s new coalition government announced the cancellation of the country’s controversial generational tobacco ban. The Foundation for a Smoke-Free World, initially funded by PMI, stated it would no longer accept any funding from the nicotine industry. WHO announced the dates for the face-to-face continuation of the 10th COP meeting in February 2024. Australia will ban the import of disposable e-cigarettes from January 1, 2024. France plans to ban the use of disposables by 2025.
December
(Note: This magazine was published in December, so this month may not be complete.)
- The U.S. FDA announced that the completion of PMTA reviews might be delayed, considering the D.C. Circuit Court’s opinion in Fontem U.S. v. FDA, which partly affirmed and partly vacated and remanded marketing denial orders for certain e-cigarette products.
- U.S. House Representatives asked federal officials for information on measures being taken to stop Chinese e-cigarettes attractive to children from entering the U.S.
- Mexico’s Supreme Court ruled that the presidential decree banning the sale of e-cigarettes was unconstitutional.
- The FDA announced civil penalty lawsuits against 25 brick-and-mortar and online retailers for selling unauthorized Elf Bar, EB Design, and other e-cigarette products.
- The French National Assembly unanimously passed a bill to ban disposable e-cigarettes.
- Vuse’s market share rose from 41.5% to 42%, surpassing Juul, which declined from 24.7% to 24.3%.
- Guam proposed to strengthen fees and penalties for selling e-cigarettes to minors.
Looking Ahead to 2024
Predicting the exact state of the e-cigarette industry by the end of 2024 is challenging. Industry insiders expect regulatory crackdowns on disposable e-cigarette products, and misinformation may continue to proliferate.
The U.S. may see a reduction in product variety, as the FDA is unlikely to approve many devices. However, globally, especially in the EU and the UK, the industry should continue to flourish and expand. More importantly, innovation is expected to continue thriving outside the U.S.
Gregory Conley, Legislative and External Affairs Director at the American Vapor Manufacturers Association, predicted at the end of 2022 that the FDA’s policy on e-cigarette products would continue to be characterized by regulatory paralysis and seek the least politically controversial regulatory options, with many PMTA decisions not expected until 2024 or later. He was right on both counts.
Looking ahead to 2024, Conley told Vapor Voice that the e-cigarette industry should brace for turbulence, especially in the U.S. He predicted the biggest obstacle remains the FDA’s CTP.
“In its current form under the leadership of Brian King, despite youth vaping dropping to its lowest level in a decade, the agency has become more hostile to e-cigarette products,” Conley said. “Ongoing court cases may force internal reforms at the CTP, heightening these tensions, but such changes are likely to meet significant internal resistance and non-compromise.”
Conley warned that industry insiders should not be too naive. “The regulatory environment for e-cigarette businesses in the U.S., regardless of size, is likely to get worse before it gets better. This is the harsh reality we have to face.”
Outside the federal level, a key challenge will continue to come from state governments and major tobacco companies like Altria and R.J. Reynolds. Conley noted that the rise of disposable e-cigarette products containing synthetic nicotine is impacting cigarette sales and major tobacco companies’ market shares in e-cigarettes, prompting push for national-level PMTA registration.
“Essentially, these bills attempt to authorize state regulatory agencies to act as mini PMTA enforcement departments. The real effect of these registrations is to ban
all products that submitted PMTAs after September 2020. In short, this means that the sale of almost all disposable e-cigarette products on the market is illegal,” Conley explained. “These measures have already been implemented in states like Alabama, Oklahoma, and Louisiana, leading to market disruptions. Law-abiding retailers and ordinary adult consumers are affected as a result.”
Conley predicts that globally, the e-cigarette industry will continue to battle well-funded anti-vaping campaigns led by organizations funded by Michael Bloomberg. However, there is a glimmer of hope: evidence supporting regulated, rather than outright banned, products continues to grow.
“I cautiously optimistically believe we will see countries in Latin America and Southeast Asia begin to revisit their previously misguided policies. Unfortunately, the backlash against disposables may become more intense in Europe,” Conley noted. “It’s the best of times for adult consumers seeking carefree nicotine consumption. The market has seen tremendous changes in product quality and variety. However, for businesses in the e-cigarette industry, the situation is quite different. Success in this industry might require risking livelihood and freedom unless there is real reform to regulate the products adults want, like flavored disposables.”
Conley stated that the industry must remain vigilant as regulatory challenges, particularly in the U.S., along with global policy changes and market dynamics, indicate that the path for the industry will be rocky in the short term. “We hope that future nicotine control policies will be based on harm reduction principles, not mimic the drug war. However, the current trend seems to be leaning towards the latter.”
This complex landscape presents numerous challenges and opportunities for the e-cigarette industry. As the sector navigates regulatory hurdles and market shifts, innovation and adaptation will be key to its resilience and growth. For more detailed insights into the evolving e-cigarette market and its future trajectory
