On March 6th, Altria announced its official acquisition of the electronic cigarette brand, NJOY, for a price of $2.75 billion, in an effort to expand its market share and influence within the electronic cigarette industry.
Altria has stated on its official website that there are currently a significant number of pending PMTA reviews in the US market, with most products being non-compliant. In contrast, NJOY has received PMTA certification for six of its products set for 2022. As the FDA strengthens enforcement and the US market becomes fully compliant, growth will be slow in the single digits, and NJOY will emerge as a competitive player due to its PMTA status.
At the APE exhibition, as seen in a photo sourced from 2FIRSTS' Washington News Center...
However, during the APE Expo in Florida from March 3rd to 5th, staff from 2FIRSTS Washington news center conducted interviews regarding Altria's acquisition of NJOY. The interviewed manufacturers expressed confusion about Altria's long-term strategic planning. This is because applying for PMTA certification requires a significant investment, yet the US market does not currently set any barriers for products that have not passed PMTA. Therefore, many brand manufacturers believe that PMTA is not important and that Altria's heavy investment for future development is unnecessary.
This claim appears to be corroborated at the retail level. 2FIRSTS visited electronic cigarette stores in Fort Lauderdale and Miami, Florida, where the owners and staff did not know what PMTA was, leading to no answer to 2FIRSTS inquiries about "why products that have not passed PMTA can still be on shelves for sale." When asked about the most popular products sold in the store, the answers were almost always brands like ELFBAR, FUME, HQD, and FLUM, all of which are reportedly not PMTA-approved.
2FIRSTS staff visit Florida's electronic cigarette shops | Image Source: 2FIRSTS
Despite limited awareness of PMTA among manufacturers and retailers, some brand owners are striving to obtain PMTA certification for long-term planning and compliance development.
According to an interview by 2FIRSTS with the well-known American brand ESCOBARS at the TPE exhibition in Las Vegas, the brand stated that they have spent more than 6 million US dollars on PMTA applications but have yet to receive any follow-up review notices.
The application process for PMTA is even longer. Liu Haixiao, the head of Platinum Overseas Brands, told 2FIRSTS that their company had started the PMTA application process several years ago and only recently received the FDA's acceptance letter.
According to Liu Haixiao's explanation, an acceptance letter is a communication from the FDA acknowledging receipt of a PMTA application for tobacco and mint flavored e-liquids. It confirms that the FDA has received the testing data submitted by the company. While the FDA has not yet issued a certification of compliance, the acceptance letter indicates that the company's application falls within the 2% of applications that have been reserved for potential legal sales.
The US testing institutions for e-cigarette liquid do not directly disclose monitoring results to businesses but instead submit the data to the FDA's backend system. Businesses must wait to be notified. If the results are not satisfactory, the entire process will be overturned, requiring businesses to start from scratch in order to obtain PMTA approval.
The long timelines and significant investments make it an uncertain, prolonged battle for companies. However, due to the nature of the United States' federal system, each state has the right to establish its own laws. As a result, FDA enforcement faces numerous obstacles, and PMTA enforcement has not been implemented, leading to a mismatch between regulatory compliance and market expectations.
Related articles recommend: [1] When the US market is fully regulated, NJOY will show its competitive advantage, according to Altria's prediction.
Altria has acquired NJOY, the third largest electronic cigarette company in the United States, for $2.75 billion.
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