The NJOY bankruptcy is certainly a blow. I’ve been asked many times about its significance and what it says about the future of electronic cigarettes and vaping.
What I tell people is that while it’s significant, NJOY is just part of a larger, more complex story.
I’d argue that as an industry, we’re at the most pivotal point ever. Some would say the time leading up to and the announcement of the U.S. Food and Drug Administration’s “deeming” regulations were critical, but we have to look past that. Because in this election cycle, it’s really about survival.
I refer to the pending Cole-Bishop amendment to the 2017 Agricultural Appropriations bill and our need to do all we can to get it passed. It’s a lifeline for our industry—of course, not a guarantee of survival but an opportunity to grab onto something meaningful. It would push up the grandfather date for deemed products from Feb. 15, 2007, to probably sometime in 2016. In doing so, manufacturers would still have to comply with certain rules, but they wouldn’t have to go through the more complicated new-product review process.
Many in the vaping community know the importance of this window of opportunity, but as I reflect on the bankruptcy of NJOY, certainly a pioneering e-cig company and one of the most prominent, I also have to say the industry wouldn’t have made it this far without NJOY.
The company started back in the mid-2000s, but in 2009 it took on the FDA and won. Those in the industry recall that at the time, the FDA had begun barring entry of e-cigs at our borders, calling them unregulated medical devices. NJOY did the industry a great service by filing a lawsuit that eventually stopped the FDA ban and allowed the market for these products to gain traction here.
Others would note the flip side of the coin: The legal rulings also may have inadvertently categorized e-cigs as tobacco products.
Let me explain. The common thought today is that e-cigarettes are tobacco products.
But imagine a time when these tobacco-delivery methods weren’t considered anything. They were devices. Not cigarettes, not cigars, but products that allowed people to absorb nicotine in lieu of traditional smoking. In fact, the naming of e-cigs and vapor as a tobacco product is not even in the original ruling. It appears in the comments afterward.
If e-cigs or the process of vaping were never classified as tobacco products, they may never have fallen under FDA authority in the first place.
Outlier or Outsider?
But getting back to NJOY, two things are of note. First, from the beginning, the company positioned its products as smoking alternatives. It declared in advertising that NJOY would make smoking obsolete. Immediately the company aligned with the tobacco definition and actively pursued smokers.
By doing so, NJOY was always an outlier to what was the core vaping community. The company never even seemed to court them. The NJOY people wore business suits, which contrasted with the edgier, underground
vibe of the bedrock market. Instead of reaching out to the growing number of vaping shops, NJOY went after c-stores and other retail outlets, trying to bring the product into the mainstream.
Yes, NJOY did attempt to make the product look cool. Rock singer Courtney Love was one of the celebrities in the ads. But NJOY never seemed to reach out to that core market.
Second, the company didn’t embrace flavors. Maybe as it aligned itself with the tobacco concept, NJOY wanted to avoid—at least initially—the idea of flavors. If you follow the growth of vaping and vape shops, you’ll see that flavors were a primary driver. In fact, when the deeming regulations came out, a back-and-forth discussion within the federal government and the vaping community successfully cut out language of flavor bans for vaping. Such bans may resurface, but for now, flavors are allowed.
As I alluded, NJOY did eventually develop its own line of flavors, its “Artist Collection,” for which it partnered with well-established e-liquid makers to create a solid product.
But how far it’ll go in selling it in light of the bankruptcy is hard to say.
Which brings us back to Cole-Bishop. We can look at NJOY and give it props for where it brought the industry, arguably more for the better than worse. But what’s more important today is the battle at hand. Cole-Bishop won’t guarantee anything, but it will get us out of immediate danger. If it fails, the industry will have a much harder time in the future.
Cynthia Cabrera is a consultant with Miami-based Cating Group and has a background with vaping manufacturers, online sellers and affiliated groups. Reach her at ccabrera@catinggroup.com.
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