SHEETZ ENTERS THE CBD MARKET IN PA

Sheetz has announced the launch of cannabidiol, or CBD, products, which will be available at over 140 of its store locations across Pennsylvania.

According to a release, the CBD products that will be offered include topical rubs and patches, tinctures, vape pens, oral pouches, capsules and pet products.

All CBD products will be kept behind the counter and a 100% proof-of-age policy requiring customers to be 18 years of age or older to purchase products will be enforced.

Sheetz employees will ask for proper identification, such as a valid driver’s license, passport or military identification card, from any customers wanting to purchase CBD.

Click here for a list of all locations selling CBD products.

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NACS & SIGMA Submit Joint Response to FDA’s E-Cigarette Policy Proposal

05/08/2019
Electronic cigarette user

ALEXANDRIA, Va. — The convenience store industry shares growing concern about the rise of electronic cigarette use by minors; however, the industry did raise concerns about the Food and Drug Administration’s (FDA) proposal to restrict the sale of flavored vapor products.

This week, NACS, the Association for Convenience & Fuel Retailing, and the Society of Independent Gasoline Marketers of America (SIGMA) submitted formal comments on the FDA’s draft guidance regarding the sale of flavored — other than mint, menthol and tobacco — e-cigarettes.

Hundreds of retailers also have submitted comments to the agency.

In comments addressed to Norman Sharpless, acting commissioner of the FDA, NACS and SIGMA said they share the agency’s concern over the increased use of e-cigarettes by underage consumers; however, the groups pointed out that the draft guidance doesn’t address that concern but instead favors some retail outlets over others “in a way that is not consistent with the reality of the marketplace,” according to NACS and SIGMA.

On March 13, former FDA Commissioner Scott Gottlieb announced that the agency is proposing to end the current compliance policy as it applies to flavored electronic nicotine delivery system (ENDS) products such as electronic cigarettes, and prioritize enforcement of their sale to shut down youth access. The proposal does not include tobacco, mint and menthol flavors, as Convenience Store News previously reported.

The stricter compliance policy would effectively remove the flavored tobacco products from convenience stores, allowing sales only in adult-only, age-restricted outlets like tobacco shops.

According to the two industry groups, the FDA has not provided data that supports this type of distinction between adult-only and stores where minors can enter. The draft guidance, they noted, cites data showing that more teens acquire e-cigarettes from vape shops (14.8 percent) than from convenience stores (8.4 percent).

If implemented as written, the FDA’s draft guidance “will push underage consumers to retail outlets with the worst track record of compliance with age restrictions. The result will be more overall sales of [e-cigarettes) to minors rather than less,” NACS and SIGMA pointed out.

An American Journal of Health Promotion study indicates that each vape shop/tobacco store is 100 times more likely to sell e-cigarettes to a minor than the average convenience store, the groups added.

Other concerns, according to the groups, include:

  • The current draft guidance is an attempt to impose a regulation on an industry, which mandates a more extensive rulemaking process than the FDA has used in this situation.
  • Tobacco sales are vital to the c-store industry’s economic viability, with tobacco products accounting for nearly 38 percent of an average store’s in-store sales in 2018.
  • The agency should focus on underage users’ access to the products themselves. Stores should keep them behind a sales counter that is solely accessible by adult employees.
  • The draft guidance uses confusing language and high-level recommendations that don’t specify how retailers can comply.
  • The FDA has said it will begin enforcing the updated policy in 30 days after it is finalized, which is not sufficient time for businesses to respond appropriately.

House of Representatives Support

In addition to comments from the retail community, the FDA also heard from 46 members of the U.S. House of Representatives about some of the same concerns.

The bipartisan letter, led by U.S. Rep. Trey Hollingsworth (R-Ind.), noted that the proposed restrictions pick winners and losers in the marketplace by allowing certain channels of trade to sell these products and prohibiting other channels like the convenience store and grocery channels.

“We should want a marketplace where in all players are competing under equal rules and that advances the stated, pressing public policy need of keeping e-cigarettes out of the hands of minors. That mission is advanced by having a set of guidelines that enables and ensures compliance by all retailers, not one that fundamentally excludes one set of retailers who have proven capable of compliance with laws forbidding the sale of products to minors,” the letter stated.

According to NACS and SIGMA, the letter also raised concerns with the FDA’s process in implementing the draft guidance. While the agency accepted public comments on the draft guidance from March 13 through April 30, it did not go through a notice and comment rulemaking, which it is required to do under the Family Smoking Prevention and Tobacco Control Act when regulating the sale and distribution of tobacco products.

“The convenience stores and grocery stores that have for decades demonstrated consistent compliance deserve the data underpinning a decision that would bar their sale of these products to legal adults and a process wherein the industry could provide input about the guidance’s impact on equality in the marketplace,” the letter states.

https://csnews.com/nacs-sigma-submit-joint-response-fdas-e-cigarette-policy-proposal?oly_enc_id=6466I3043034B0Z

Well Again the FDA makes comments with no supporting evidence. What’s your thoughts.

FDA Will Hold April Meeting to Discuss CBD Product Regulation

02/28/2019
The FDA headquarters sign

SILVER SPRING, Md. — The Food and Drug Administration (FDA) is putting cannabidiol (CBD) products on its agenda.

In testimony during a House Appropriations Subcommittee hearing on Feb. 27, FDA Commissioner Scott Gottlieb said the agency will meet in April to explore new pathways for hemp-derived CBD to be sold legally in the food and supplement markets, while protecting research into future pharmaceutical applications.

Cowen & Co. reported the meeting in an analyst note.

The meeting comes on the heels of the passage of the 2018 Farm Bill in December. The legislation declassifies industrial hemp as a Schedule I substance, but it does not change the FDA’s oversight authority over CBD products, according to Cowen & Co.

At the time, Gottlieb said the FDA will continue to step in when certain health claims are made. Additionally, since there is now an FDA-approved drug with CBD as an active ingredient, current law stipulates that CBD can’t be added to food products sold across state lines or marketed as a dietary supplement, the firm noted.

According to Cowen, some states like California have chosen to follow FDA’s stance banning hemp-derived CBD in food and dietary supplements — even though recreational cannabis is legal in California. Other states like New York initially said they would allow CBD to be sold as a dietary supplement, but have since taken a more aggressive stance on CBD added to foods.

On Jan. 15, U.S. Sens. Ron Wyden (D-Ore.) and Jeff Merkley (D-Ore.) sent a letter to the FDA urging the agency to update federal regulations governing the use and interstate sale of certain hemp-derived ingredients in food, beverages or dietary supplements.

The two senators, who authored the 2018 Farm Bill’s Hemp Farming Act provision, indicated that it was “Congress’ intent to ensure that both U.S. producers and consumers have access to a full range of hemp-derived products, including hemp-derived cannabinoids.”

They requested feedback from FDA within 30 days on the agency’s specific plans regarding implementation of the 2018 Farm Bill, Cowen & Co. reported.

“In our view, Gottlieb’s statement and testimony indicate that he is willing to take a flexible regulatory approach to foster the development of hemp products such as CBD. However, those actions will have to fit under the confines of current law and further legislation may be needed,” Cowen & Co. analysts Eric Assaraf and Vivien Azer wrote in the joint note.

“We continue to believe there will be a period of regulatory uncertainty over CBD products at the state and federal level for at least the next six months to a year,” they added.

Rite Aid Exits Electronic Cigarette Business

04/12/2019
Rite Aid store
Rite Aid will begin testing CBD sales in Oregon and Washington.

CAMP HILL, Pa. — Five years ago, CVS Health Corp. stopped selling tobacco products. Two weeks ago, Walgreens revealed plans to test tobacco-free stores. Now, Rite Aid Corp. is removing electronic cigarettes from its locations.

According to Chief Operating Officer Bryan Everett, the drugstore chain will remove all e-cigarette and vapor products over the next 90 days.

Citing data from the Centers for Disease Control and Prevention that show tobacco use among youth increased nearly 38 percent between 2017 and 2018, Everett made the announcement during Rite Aid’s fourth-quarter 2019 earnings call on April 11.

“While many feel these products are beneficial to those of legal age or trying to quit the use of tobacco, we have made the decision to remove all electronic cigarettes and vaping products from our offering at all Rite Aid Stores,” he explained.

In addition, the company will continue to enforce its chainwide policy that requires identification for all age-restricted purchases.

“We will also continue evaluating our entire front end offering to ensure that we are meeting both the needs and the expectations of our customers,” Everett added.

As it exits one segment, Rite Aid will begin testing sales of another. According to Everett, the company will begin testing cannabidiol (CBD) products this month. The decision was driven by its customers’ interest.

“In response to this interest, this month we will begin piloting the sale of CBD creams, lotions and lip balms at Rite Aid stores in Oregon and Washington to better meet the needs and preferences of our customers in those communities,” he said.

Camp Hill-based Rite Aid has 3,585 locations in the United States

Tobacco 21 Bill Passes in Texas Senate

Just as a bill attempting to raise the legal age to purchase tobacco products from 18 to 21 years is introduced on the federal level [read more here], a similar bill is now being considered in the state of Texas.

On April 9, 2019, Senate Bill 21 passed Texas’ Senate in a 20-11 vote. The bill was introduced by Sen. Joan Huffman (R-Houston) and had the support of one Democrat, State Sen. John Whitmire, also from Houston. Republicans at first opposed the bill, criticizing the age increase because it conflicted with those who were serving in the military who would want to use tobacco products. With the enlistment age being 18, the bill in its original presentation would have barred young adults from being able to legally purchase these products. Sen. Huffman amended the bill to include the military exemption, allowing for Texans who are 18 years and older that serve in the armed forces to purchase tobacco products if they have a valid military ID. Previously, there was a bill in the lower chamber that passed out of a Texas House committee that did not include the military exemption.

Texas’ Lt. Governor Dan Patrick has named Senate Bill 21 as one of his priorities this session and that he believes this bill will save lives and improve public health. A coalition of organizations with a goal of raising the tobacco purchasing legal age to 21 known as Texas 21 opposes the military exemption. Claudio Rodas, a regional director of Campaign for Tobacco-Free Kids, noted that the organization does not support the military exemption and that they will work with legislators to understand why the exemption should be opposed by all.

The bill is now assigned to the House Committee on Public Health. You can express your opposition to the bill by using the International Premium Cigar & Pipe Retailers Association’s (IPCPR) website by clicking here.

Looking for thoughts and discussion. This is controversial.

Senators Question JUUL’s Business Ties to Altria, Demand Answers

Time to come back after a long quiet spell. Time to share your thoughts.

https://tobaccobusiness.com/author/antoinereidtobonline-com/

Eleven senators are demanding answers from popular e-cigarette manufacturer JUUL Labs as the ongoing youth “epidemic” surrounding the popular vaping device continues to be a focus on Capitol Hill. The senators sent a letter addressed to Kevin Burns, CEO of JUUL Labs, Inc., on April 8, 2019, questioning the company’s marketing practices as well as its relationship to big tobacco company, Altria Group, Inc. In the last quarter of 2018, Altria Group, Inc. made a sizable investment in JUUL labs [read more here], a move that’s only brought more scrutiny to the company as e-cigarettes and flavored tobacco products have become the focus of much of the U.S. Food and Drug Administration’s policy in the past year.

“Nearly one year a go, many of us wrote you urging that your company immediately take action to reduce youth use of the dangerous and addictive JUUL vaping device. One year later, JUUL is more popular than ever with children and your company has decided to team up with Big Tobacco giant Altria–the maker of Marlboro cigarettes, the most popular cigarette among children in the United States–in a partnership that the American Heart Association has called ‘a match made in tobacco heaven’,” the senators wrote in their letter to Burns. “While JUUL has promised to address youth vaping through its modest voluntary efforts, by accepting $12.8 billion from Altria–a tobacco giant with such a disturbing record of deceptive marketing to hook children onto cigarettes–JUUL has lost what little remaining credibility the company had when it claimed to care about the public health.”

The senators go on to demand documents and responses to a list of questions addressing JUUL’s business practices. The senators want JUUL to supply them with a complete list of all of JUUL’s advertising buys, including radio, TV, print and social media; the steps the company has taken to ensure its advertisements have not been seen or heard by people under the age of 21; and whether or not JUUL will take extreme steps to prevent its products from being advertised to youth, including keeping its ads out of convenience stores and not using social media influencers to promote its products. The senators also want to see all of JUUL’s new contracting, purchasing order and financial arrangements with retailers, wholesalers, and distributors for JUUL products since Dec. 19, 2018, when the company announced Altria’s investment.

The senators are also asking whether or not the FDA has issued a pre-market order for any JUUL product, including its 57 flavored products and the company’s contributions to any conservative-leaning and anti-regulation organizations that may have attempted to slow the regulatory efforts impacting tobacco products, including e-cigarettes. The senators issued these questions and have asked JUUL to respond in writing to these and many more questions by April 25, 2019.

Proposal Accepted: RAI & BAT Merger Agreement

Proposal Accepted: RAI & BAT Reach Merger Agreement

$49B deal expected to close in the third quarter.

By Melissa Kress, Convenience Store News

WINSTON-SALEM. N.C. — Three months after a proposal was placed on the table, Reynolds American Inc. (RAI) and British American Tobacco shook hands on a $49-billion deal to join forces.

RAI agreed to be acquired by BAT in a cash and share transaction valued at $59.64 cents per share, which reflects a transaction prices which is a 26.4-percent premium to the RAI stock price on Oct. 20, the day prior to publicly announcing BAT’s initial proposal, explained Susan Cameron, executive chair of the RAI board of trustees, in a call Tuesday morning.

“The transaction committee and RAI’s full board of directors are very pleased to have reached this agreement as a result of their significant discussions and negotiations with BAT over the past few months following that initial proposal,” she said.

The agreement represents a total enterprise value for all of RAI at more than $95 billion and is a 7-percent premium to the original Oct. 20 proposal resulting from BAT’s incremental understanding of RAI’s unique opportunities for growth in the attractive and profitable U.S. tobacco market.

“What we are announcing today is compelling, strategic and serves to create further value. The acquisition of Reynolds American that we agreed to not only represents a significant premium for our shareholders, but also includes the potential for continued future growth through ownership in the combined company,” Cameron said.

This acquisition also increases sale, generates considerable significant cost efficiencies, enhances geographic diversification and significantly strengthens research and development (R&D) capabilities — all of which will result in enhanced growth opportunities for the combined companies, she explained.

It is also expected to benefit adult tobacco consumers across the globe by further supporting Reynolds American’s ongoing to efforts to lead the transformation of the tobacco industry, she added.

“That transformation journey has delivered tremendous progress over the past 12 years beginning with the business combination between R.J. Reynolds and Brown & Williamson in 2004. First as CEO and now as executive chairman, it has been quite a journey for me as well over the period,” Cameron explained.

The deal will make RAI BAT’s largest operating subsidiary.

“This next step for us represents a leap forward in RAI’s transformation journey as the combined company will have a world-class pipeline of next generation products (NGP) along with global scale and the R&D capabilities both companies that will fuel the commercialization of innovative tobacco alternatives,” Cameron said.

CHANGING INDUSTRY

The deal comes at an interesting time for the tobacco industry, which has seen its leading segment fluctuate over the past few years.

“Adult tobacco consumers have really benefited from the improved economy over the past year or two and that impact is starting to stabilize. While cigarettes declined at a slower than historical rate in 2015 and 2016, we are now seeing cigarettes return to their historical annual rate of decline of approximately 2 to 4 percent, and our companies have demonstrated an ability to successfully manage this trend,” explained Debra Crew, RAI president and CEO.

As she explained, moist snuff volumes continue to grow and profit growth in both tobacco segments remains favorable.

In addition, RAI sees opportunity as adult tobacco consumers look for alternative tobacco products and the company is “Investing significantly” in those alternatives, Crew added.

“RAI’s operating companies and their brands are well-positioned for continued industry leadership and sustainable long-term growth across a wide range of future scenarios,” she said.

Crew also explained that “one of the exciting elements of the transaction” is the opportunity created from brining the Newport, Kent, and Pall Mall brands under the same global company.

A LOOK AT THE NUMBERS

Under the terms of the deal, BAT will acquire the 57.8 percent of RAI common stock that it does not currently own for $29.44 per share in cash and a number of BAT American Depositary Shares representing 0.5260 of a BAT ordinary share, currently worth $30.20 per share based on the BAT closing share price as of Jan. 16, and the corresponding Dollar-Sterling exchange rate.

The transaction has been approved by the independent directors of RAI who formed a transaction committee to negotiate with BAT, given BAT’s existing ownership stake and representation on RAI’s board of directors, and by the boards of directors of both companies.

Current RAI shareholders will represent about 19 percent ownership of the combined company, according to Cameron, and more than 40 percent of the profits.

“RAI investors who received the newly issued shares in the combined company will have continued significant exposure to the attractive, growing and profitable U.S. tobacco market and will also gain additional exposure to leading positions in high-growth emerging marketing across South American, Africa, the Middle East and Asia,” said Andrew Gilchrist, chief financial officer and executive vice president.

The developed and emerging market opportunities will be addressed with a portfolio of global brands including Dunhill, Kent, Lucky Strike, Pall Mall and Rothmans.

“We believe there is also meaningful opportunities to share global best practices across both of the organizations, as well as global collaboration and sharing of both companies R&D expertise and talent across the new, enlarged group,” Gilchrist explained. “The new combined company will also possess a global new generation products business with a world-class pipeline of innovative vapor and tobacco heating products with access to the fastest-growing NGP markets.”

According to BAT’s Chief Executive Nicandro Durante, the United Kingdom-based company has been a shareholder in RAI since 2004 and has benefited from the success of its present management team’s strategy, including its 2015 acquisition of Lorillard Inc. — which BAT supported with its own investment.

“BAT has consistently executed a winning strategy and has a proven track record of delivering strong results and returns for its shareholders while successfully investing for future growth,” Durante said.  “Our combination with Reynolds will benefit from utilizing the best talent from both organizations. It will create a stronger, global tobacco and NGP business with direct access for our products across the most attractive markets in the world.  We believe this will drive continued, sustainable profit growth and returns for shareholders long into the future.”

The transaction is subject to shareholder approval from both companies, as well as regulatory approvals and other customary closing conditions. The transaction is expected to close in the third quarter.

To view RIA’s investor presentation on the transaction, click here.

The two tobacco companies have also created a transaction website to provide details on the merger.

Proposal Accepted: RAI & BAT Reach Merger Agreement

By Melissa Kress, Convenience Store News
  • About Melissa Kress Convenience Store News Melissa Kress joined EnsembleIQ’s Convenience Store News and Convenience Store News for the Single Store Owner in November 2010. Her primary beats include alcoholic beverages and tobacco. Kress has been a professional journalist since 1995. A graduate of West Virginia University, she began her career in community journalism before moving to business-to-business publishing in 2000, covering commercial real estate.

Logansport lawmaker sponsors vaping overhaul after FBI probe

Logansport lawmaker sponsors vaping overhaul after FBI probe

INDIANAPOLIS (AP) — Republicans who control the Indiana Senate say they want to overhaul a vaping law that sparked an FBI probe.

State Sen. Randy Head of Logansport says he’s sponsoring legislation that will give state government more regulatory control over the production of the liquid used in vaping devices. The devices are used as an alternative to smoking.

The law passed two years ago and amended last year effectively gave seven producers control of the Indiana market, shutting out dozens of other manufacturers that had operated in the state.

That’s because it empowered one company to inspect and certify production facilities. The company, called Mulhaupt’s Inc., only certified a limited number of producers.