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.

FDA Publishes Final Rule To Reduce Ambiguity For Products Made Or Derived From Tobacco

The FDA on Jan. 9th published a final rule entitled Clarification of When Products Made or Derived From Tobacco Are Regulated as Drugs, Devices, or Combination Products; Amendments to Regulations Regarding “Intended Uses” to clarify that products made or derived from tobacco will be regulated as drugs, devices or combination products rather than tobacco products if they “are intended to 1) diagnose, cure, mitigate, treat or prevent disease, including use in smoking cessation, or 2) affect the structure or any function of the body in any way that is different from effects related to nicotine that were commonly and legally claimed in the marketing of cigarettes and smokeless tobacco prior to March 21, 2000.”

Source:

Food and Drug Administration

Source Date:

January 10, 2017

https://www.tma.org/article/2017/clarification-when-products-made-or-derived-tobacco-are-regulated-drugs-devices-or-0?utm_source=TMA+Publications&utm_campaign=11d472ef4d-EMAIL_CAMPAIGN_2017_01_12&utm_medium=email&utm_term=0_f85a4ca640-11d472ef4d-72141293

Fontem, Nu Mark End E-Cig Patent Fight With Settlement

Law360, New York (January 6, 2017, 4:40 PM EST) — Fontem Ventures BV has reached a settlement with Nu Mark LLC in a fight over electronic cigarette patents, ending an infringement lawsuit as well as challenges that Nu Mark had launched attacking the validity of the patents. 
Fontem, a unit of U.K tobacco company Imperial Brands PLC, and Nu Mark filed papers Wednesday in North Carolina federal court to dismiss the lawsuit. The companies have also agreed to resolve cases at the Patent Trial and Appeal Board.

Terms of the agreement were not disclosed in court documents. A spokesman for Altria Group Inc., the parent of Nu Mark, said the company was pleased the issue had been resolved but declined to disclose details of the settlement.

Representatives for Fontem did not immediately respond to a request for comment.

The company sued Nu Mark in the spring of 2016, alleging its MarkTen and GreenSmoke products infringed eight patents. The suit was one of several that Fontem has filed against e-cigarette manufacturers in recent years.

It has also gone after the likes of R.J. Reynolds Vapor Co., maker of the top-selling Vuse; Spark Industries LLC; and Logic Technology Development LLC, among others.

Not long after the suit was filed, Nu Mark challenged each of the patents it was accused of infringing at the PTAB. It requested the board examine the patents in inter partes review, arguing that claims in each were invalid.

While some of Nu Mark’s petitions were still pending, the PTAB had declined to institute review in a handful of those cases, including one last month, when it said Nu Mark’s arguments about parts of a patent being obvious relied on evidence that had already been considered by a patent examiner.

The board said Nu Mark was, in effect, asking it to “second guess” the U.S. Patent and Trademark Office examiner.

“We are not persuaded that adjudicating a dispute on an already considered issue is an efficient use of the board or party resources,” the board wrote in its Dec. 15 decision.

Fontem in November 2013 paid $75 million to acquire e-cigarette technologies from Dragonite International Ltd. Hon Lik, a Chinese pharmacist who founded Dragonite and is widely recognized as being the inventor of the e-cigarette, also joined the company.

In addition to this week’s settlement with Nu Mark, Fontem has reached deals with companies including NJOY Inc., Vapor Corp. and Electronic Cigarettes International Group Ltd. to end patent litigation. Each of those three publicly announced deals included license agreements.

Fontem and R.J. Reynolds recently told the judge overseeing their case that the companies are working to identify a mediator that they can agree on.

The patents at issue are U.S. Patent Numbers 8,365,742; 8,375,957; 8,393,331; 8,689,805; 8,490,628; 8,863,752; 8,893,726; and 8,899,239.

Fontem is represented in the Nu Mark case in district court by Michael J. Wise, Joseph P. Hamilton, Lara J. Dueppen and Courtney M. Prochnow of Perkins Coie LLP, and Stuart H. Russell and G. Gray Wilson of Wilson Helms LLP.

Nu Mark is represented by Gregory P. Stone, Peter A. Detre, Peter E. Gratzinger and Zachary M. Briers of Munger Tolles & Olson LLP, Anish Desai, Elizabeth S. Weiswasser and Stephen Bosco of Weil Gotshal & Manges LLP, and Gregory C. Holland and Whit D. Pierce of Smith Moore Leatherwood LLP.

The case is Fontem Ventures BV et al. v. Nu Mark LLC, case number 16-cv-01261, in the U.S. District Court for the Middle District of North Carolina.

–Editing by Aaron Pelc.

https://www.law360.com/articles/878255/fontem-nu-mark-end-e-cig-patent-fight-with-settlement

Donald John Bores – November 21, 1934 – December 1, 2016

With sadness I pass on this information. Don helped me greatly and I will miss him greatly.

Lou

Donald John Bores

November 21, 1934 ~ December 1, 2016

Just 10 days after celebrating his 82nd birthday at home in Apopka, Florida, Don, ‘Pops’ Bores

received an opportunity for yet another venture that he could not pass up. This one came with a

great sign-on bonus of meeting his Creator and being reunited with his friends and loved ones

that have gone before him. He has accepted this new opportunity and has left us, not to return,

while he beings this new journey. He will be missed beyond measure.

Don began his first venture in Brecksville, Ohio, the oldest son of Kazmer and Wanda Bores.

His entrance was followed by his brother, Ken and many years later by another brother, Jack.

He spent his early years in Ohio, playing first string quarterback at and graduating from

Brecksville High School before entering Kent State University where he graduated with a

business degree in 1957. He served in the United States Marine Corp & Reserves from 1957 to

1963.

Don met Patricia Morin on a blind date in 1960 and they were married in 1961 in a beautiful

church in Nashua, New Hampshire. Together they had three children, Michelle, Linda and DJ.

Don began his career at Norwich Eaton Pharmaceuticals, where he spent 25 years and held

several positions cumulating with the Director of Sales and Marketing. His positions took him

and his growing family to live in several states including Ohio, New York, & Illinois. When Don

felt he’d shared enough of his talent at Norwich Eaton, he joined Brown and Williamson in 1980

in Louisville Kentucky, as the Director of Trade Marketing.

Don was married to Patricia for 25 years and although their marriage ended, their friendship

never did. From 1985 to 1992 Don was married Shirley Engelmeier, and they had one son,

John Michael Bores, who gave Don a second chance at fatherhood at 55 years old, one that he

took very seriously and as a result he had an extra special connection with John.

After 7 years at B & W he felt the need to go out on his own so he started CTI, (Consultant to

Industry) in 1987. His success there and cumulative experience in the industry encouraged him

to establish Tobacco Trade Magazine in 1998, and one year later a successful candle business

in 1999. Although that would be an impressive career for most, Don was just beginning. He

continued on to establish the NATO (North American Trade Organization) trade show in 2004,

(and was just recently honored by them in 2015) while he continued to consult with MSA

(Management Science Associates) for almost 25 years and with American Tobacco for almost

10. Although he officially retired at least twice, (retirement parties included) he continued

actively working, obtaining patents and direction for his newest venture which holds great

promise, until his last days on earth while still consulting and directing his other businesses.

Don was recently perfectly described as ‘Gritty and Generous’. He was never afraid to color

outside of the lines, take risks or keep going until he got a ‘Yes’.

Don had a fondness for Fox News, talking politics, beautiful cars & homes, sports, golf, travel, a

good (or not so good) Pinot Grigio and an Outlaws cigar. He was an avid golfer until age 75 (4

hole in ones!) and played regularly with his two best friends Stu and Steve until they left this

earth to pursue their own adventures. It was rare for him to say anything negative, unless it had

to do with California or Democrats. But, without a doubt Don’s biggest passion was his family.

His children have blessed him with 8 amazing grandchildren: Cristen, Ryan, Christian,

(Gabriella) Matthew, Patrick, Katie, Justin & Nolan. He was the driving force in keeping his kids

and grand kids together & connected despite their geographic distance. He was generous to

everyone he met whether it be a neighbor, friend, (or friend of a friend) or a local church or

business. His generosity to his family was extra ordinary and he was responsible for so much,

including but not limited to: annual family vacations, home improvements, education, braces,

cars, washer/dryers, or any other need they might have.

Pops worked hard to build a family that he was proud of and he has left a great legacy. He led

by example (and by lots of direction and advice…both solicited and not) He taught about

honesty, integrity, unconditional love, hard work, making time to enjoy life, kindness, loving and

accepting everyone for who they are (unless they are a Democrat), generosity, humor, faith in

ourselves, confidence, getting the job done right, and success. He was proud of all of his

children and grandchildren, and they were proud of him. He made sure his family remained

very close to each other and that may be one of his biggest gifts that lives on with them. We are

better people because of him.

Don Bores was a great example of a life well lived. He lived life on his terms and yet he was the

ROCK to so many and made an impact on all he met. His departure has left a hole that will

never be filled but also a memory and example that will never be forgotten. He was a true

legend. In addition to his 4 children and their families, and 8 grandchildren, he leaves behind

his two brothers Ken and Jack and their families, his Aunt Jane Martin, sister in law Priscilla

Morin and very special neighbor, best pal and partner Linda Lipham, and her family, their dog

Gracie and so many friends, family and business connections.

Long live the beauty and strength that comes down from you and into all of us Pops. You will

remain forever in our hearts.

Services to be held:

Funeral Visitation/Wake

Monday, December 5th from 6-8pm

Baldwin Fairchild Funeral Home

601 North Park Ave

Apopka, FL 32712

Funeral Service

Tuesday, December 6th from 10:30am

St. Francis of Assisi Catholic Church

834 S Orange Blossom Trail

Apopka, FL 32703

There will be an open house at Don’s home immediately following the funeral service (1792

Cranberry Isles Way, Apopka, FL 32712).

Should you wish to honor Don, please make a donation to your favorite charity in his name.

 

NJOY Files for Bankruptcy

The e-cigarette manufacturer files for relief under Chapter 11 after its Kings 2.0 fails to perform.

NJOY Inc., the electronic cigarette manufacturer, filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code late Friday, Sept. 16, in Delaware.

The failure of NJOY’s Kings 2.0 device was behind the bankruptcy filing, according to Law360, which pointed to court filings in which NJOY President Jeffrey Weiss noted that NJOY sustained significant losses after it rolled out Kings 2.0, which was an updated version of its Kings disposable e-cigarette. Kings 2.0 rolled out near the end of 2013, but the product did not perform as expected.

The Debtor’s case was assigned case no. 16-12076 and is pending before the Honorable Christopher Sontchi in the U.S. Bankruptcy Court for the District of Delaware. The hearing is set for Sept. 20 at 9:30 a.m. EST.