OAKBROOK TERRACE, Ill. -- Last week, I was tasked with counting down the biggest tobacco stories of 2015. As I looked at the most newsworthy stories of the past year, it struck me how many question marks hang over 2016.
Sure the TPSAC (Tobacco Products Scientific Advisory Committee) panel weighed in on snus as a modified risk product, but the U.S. Food and Drug Administration (FDA) has yet to make an official ruling. Likewise, the merger between Reynolds American Inc. and Lorillard Inc. was finalized, but because of a standstill agreement between Reynolds and ITG Brands, the full effects of the deal won’t be felt until 2016. And of course, there’s the small matter of the FDA’s long-awaited deeming regulations.
So for my first blog of 2016, I’ve decided to look at what major headlines we should be watching for in the new year:
1. More States Go 21/Legalize Pot
We’ve all talked about the importance of even the smallest local tobacco action: once one state, city or municipality passes a new type of tobacco regulation, others will follow in droves. It has happened with indoor smoking bans and flavor bans, and now it’s happening with 21-to-purchase laws. With Hawaii becoming the first state of officially raise the tobacco purchase age to 21, it doesn’t take a fortune teller to see that other states will attempt (and likely succeed) to do so in 2016.
On the flip-side, watch for an equally large number of states to put recreational marijuana sales on the ballot this year—especially after seeing the windfall of tax dollars Colorado and Washington are enjoying. If I were a betting gal, my money would be on California as the next state to go “green” … though I highly doubt it will be the only one to do so this year.
2. Modified Risk
As we’ve written about before, just because the TPSAC panel rejected Swedish Match’s request to market its General Snus products as less harmful than cigarettes doesn’t mean the FDA will officially reject the company’s modified risk tobacco product (MRTP) application. Granted, the agency currently has a bit of a full plate, but I expect we’ll get at least some kind of clarity at some point this year.
That decision stands to have quite the ripple effect on other potential reduced-harm products: as David Bishop, managing partner of Barrington, Ill.-based sales and marketing firm Balvor LLC, told Tobacco E-News last May, “Swedish Match has put a considerable amount of time, effort and resources into this process that would support claims that (snus) lowers the harm to the user and the general population. If they can’t get a modified-risk application approved, the thinking is, who can?”
3. E-Cig Consolidation
Every year I’ve attended the annual NATO Show in Las Vegas, I’m wowed by how the number of vape and e-cig booths seems to multiply. And every year I wonder “can this possibly continue?” Between the deceleration of e-cig sales in 2015 and the potential consequences of operating in a regulated environment, analysts and retailers alike have predicted consolidation is inevitable in this nascent industry. In 2015, we saw big players like Logic partner up with major tobacco manufacturers, but I suspect that was just the beginning.
4. A Play From Imperial
Perhaps the biggest story of my tenure are a tobacco editor so far, the 2015 Reynolds-Lorillard deal will continue to make news this year; however, for me (and many retailers), the biggest question mark is the new No. 3 player, ITG Brands (a subsidiary of Imperial Brands). With the provisions of the Reynolds standstill agreement (which limits how much additional shelf space Reynolds can require) expiring towards the end of the year, watch for Imperial to make a splash to build up its newly acquired brands.
5. Easy Pick: Deeming (Finally) Happens
You may have noticed the lack of “deeming” in these five predictions...frankly, you don’t need a crystal ball to predict that the FDA will finally announce the regulations that will grant the agency authority over currently undeemed products like cigars, electronic cigarettes and vapor. If these regulations aren’t announced in 2016, it will absolutely be the year’s biggest story.
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