NEW YORK -- Convenience retailers in New York City may see a bump in cigarette, cigar and other tobacco product (OTP) sales as a law that prohibits the sale of those products at pharmacies goes into effect Jan. 1.
The law that Mayor Bill de Blasio originally signed in August 2017 also included an increase to the minimum price of a pack cigarettes to $13 from $10.50. That part of the law went into effect on June 1.
The mayor described the larger goal as reducing the number of smokers in the city by 160,000 by 2020, according to Crain’s New York Business. At the time, the news agency said 550 pharmacies were licensed to sell tobacco products in the city.
When the Woonsocket, R.I.-based drugstore chain CVS opted to stop selling cigarettes at 7,700 stores in 2014, its departure from the market was seen positively by many in the c-store industry, which reportedly saw increases in sales as a result.
“Convenience-store operators tend to be schizophrenic on this issue,” said James Calvin, president of the New York Association of Convenience Stores, Albany, N.Y. “On the one hand, they don’t want municipalities dictating which trade channels can and can’t sell tobacco products to adults, because they know our channel could be next. On the other, they hope that some of those displaced customers shift their tobacco purchases to c-stores.”
Unfortunately, Calvin said historically, those displaced cigarette smokers “turn to the thriving black market rather than to a different licensed store.”
CHICAGO -- From the possible buy-in between Big Tobacco and Juul to the U.S. Food and Drug Administration’s (FDA) assault on menthol cigarettes and flavored vaping pods, the past year has been a roller coaster for retailers trying to keep up with a category not typically known for innovation or change.
The FDA played the biggest role in all that commotion, with Commissioner Scott Gottlieb announcing a sweeping range of proposals that will certainly reshape the tobacco category for years to come.
Here’s a countdown of eight of the top tobacco stories of 2018 …
On June 5, a majority of voters in San Francisco approved Proposition E, a measure questioning the Board of Supervisors’ decision in 2017 to ban flavored tobacco products. Those products include menthol cigarettes, candy-flavored tobacco products and flavored vaping liquids. Sixty-eight percent of voters were in favor of the measure and 31% opposed it, reported CNN.
R.J. Reynolds Vapor Co. on April 13 voluntarily initiated a nationwide safety recall of all Vuse Vibe power units after receiving consumer complaints about malfunctioning batteries, which may cause the power unit to overheat and create a fire risk.
The Winston-Salem, N.C.-based company notified the FDA regarding the issue and said it would work directly with the agency on the voluntary recall. Vuse Solo and Vuse Ciro, which use different battery components, were not part of the recall. No similar incidents have been reported to the company about these products.
As medicinal remedies using cannabidiols (CBDs)—or products derived from cannabis or hemp that do not contain the psychoactive chemicals found in marijuana—begin to filter into convenience-store inventories so does concern over product safety. One of the products c-store retailers have been encountering is kratom, a medicinal remedy produced from a Southeast Asian plant.
On April 3, the FDA issued a mandatory recall of all food products containing powdered kratom manufactured, processed, packed or held by Triangle Pharmanaturals LLC after several of the products were found to contain salmonella.
This was the first time the FDA issued a mandatory recall. It took action after Las Vegas-based Triangle Pharmanaturals failed to cooperate with its request to conduct a voluntary recall.
In a sweeping move to reinforce its public statements on preventing underage sales of e-cigarettes—and a move that may potentially affect product flavors—the FDA in September issued 1,300 warning letters and fines to an undisclosed number of retailers as a result of a summer-long undercover operation at the store level, the agency announced.
The majority of the violations were for the illegal sale of five e-cigarette products: Vuse, Blu, Juul, MarkTen XL and Logic, the agency said. These five brands currently make up more than 97% of the U.S. market for e-cigarettes, according to the FDA.
The agency gave each of the five e-cigarette companies 60 days to submit plans describing how they will address youth access and use of their products.
This fall, Richmond, Va.-based Altria Group Inc. and San Francisco-based Juul announced they would stop selling certain vaping products at retail outlets as a result of talks with the FDA. The agency had expressed concerns over minors getting their hands on their vaping devices.
Altria announced plans to remove its MarkTen Elite and Apex by MarkTen pod-based vaping products until they “receive a market order from the FDA or the youth issue is otherwise addressed,” the company said in a press release.
Days later, Juul stopped accepting retail orders for its Mango, Fruit, Creme and Cucumber Juul pods from the more than 90,000 retail stores—including convenience stores, tobacco retailers and vape shops—that sell its products. Juul will make those flavors available only on Juul.com, where it is adding further age-verification measures to an online sales system that is restricted to people 21 years old and uses third-party verification.
While deciding not to follow through on an anticipated ban on flavored electronic cigarettes in c-stores, the FDA did propose bans on menthol in combustible cigarettes and cigars, along with a ban on flavored cigars.
On Nov. 15, Gottlieb said the agency will allow c-stores to sell flavored e-cigarettes, vaping products and other electronic nicotine delivery systems (ENDS) but only in age-restricted areas.
This move does not include tobacco retailers and vape shops that prevent entry of persons under the age of 18.
The FDA will also advance a notice of proposed rulemaking that would seek to ban menthol in combustible tobacco products. The agency’s research suggests “menthol use is likely associated with increased smoking initiation by youth and young adults,” said Gottlieb.
Altria, the maker of the dominant Marlboro cigarette brand, is reportedly vying for a significant minority stake in e-cigarette upstart Juul Labs, according to The Wall Street Journal.
Citing people familiar with the matter, the news source said no deal is imminent—and nothing is certain—but if it were to happen, such a move would come with a hefty price tag. With just a few hundred employees, the three-year-old Juul was valued at $16 billion in a funding round this summer, the Journal reported.
After counting the midterm ballots this past fall, Michigan became the 10th state in the United States to legalize recreational marijuana, while voters in Missouri and Utah passed measures that would legalize marijuana for medicinal use, the Huffington Post reported. The latter moves make those states the 31st and 32nd to approve medical marijuana.
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