This blog will address recent Court of International Trade (CIT) cases on this very topic and will be a part 2 to our previous blog covering U.S. Customs and Border Protection (CBP) seizures of drug paraphernalia.  

CBP Authority 

CBP has the power to seize “drug paraphernalia” products.  This does not only cover importations of products for commercial use, but also items for personal use with individuals traveling internationally seeking entry into the United States.  CBP’s website section: Know Before You Go – Prohibited and Restricted Items encourages individuals to contact CBP prior to traveling and make sure that prohibited or restricted items, such as drug paraphernalia, are not brought into the country, as they are not only subject to seizure pursuant to 19 U.S.C. 1595a(c), but those individuals bringing in the items are subject to a monetary penalty pursuant to 19 U.S.C. 1595a(b).   

Latest CIT Decisions Regarding Marijuana-Related Accessories 

There are two decisions by the Court of International Trade that have significant implications for importers of marijuana-related paraphernalia. The first case, Eteros Technologies v. United States, No. 21-00287, concerns the interplay between federal and state laws governing marijuana-related drug paraphernalia. Pursuant to 21 U.S.C. § 863, it is illegal under federal law to import, export, or sell drug paraphernalia, which includes items used to manufacture, plant, propagate, cultivate, grow, harvest, manufacture, compound, convert, produce, process, prepare, test, analyze, pack, repack, store, contain, or conceal controlled substances.  

In Eteros, the court granted the plaintiff’s motion for judgment on the pleadings and denied the government’s cross-motion, finding that the plaintiff’s products (which included vaporizers, grinders, and rolling papers) were not drug paraphernalia under federal law. The court noted that while the plaintiff’s products could potentially be used to consume marijuana, they were also commonly used for other legal substances, such as tobacco. Moreover, the court found that the plaintiff’s products were marketed and sold in compliance with state laws governing marijuana-related products, which suggested that the products were intended for lawful use. 

In Keirton U.S.A., Inc. v. United States, No. 21-00452, the court discussed exclusion from entry into the United States of “parts and components” used to manufacture a product called the “Twister Trimmer,” which is primarily used to process marijuana plants. The plaintiff, Keirton, challenged the denial of its protest of the exclusion by CBP. The court’s jurisdiction was pursuant to 28 U.S.C. § 1581(a), which grants the exclusive court jurisdiction over actions arising under federal customs law. The standard of review was de novo based on the record developed before the court. 

In Keirton, the court granted the plaintiff’s motion for judgment on the pleadings and denied the government’s cross-motion, finding that the exclusion of the plaintiff’s parts and components was not supported by substantial evidence. The court noted that CBP had relied on a letter from the Drug Enforcement Administration (DEA) that stated that the plaintiff’s products were “designed and marketed for use with marijuana.” However, the court found that the DEA’s letter did not provide any specific evidence that the plaintiff’s products were intended to be used with illegal drugs, and that the plaintiff had presented evidence that its products were used in the legal cultivation of hemp, which is a non-psychoactive strain of the cannabis plant. 

Conclusion 

The Esteros and Keirton cases highlight the complex legal landscape surrounding marijuana-related products, and the importance of careful compliance with federal and state laws governing these products.  

Importers of marijuana-related paraphernalia should: 

• consult with competent customs counsel prior to importation and at the pre-compliance stage to carefully review and comply with both federal and state laws governing their products, including any licensing or regulatory requirements, ensure that their products comply with applicable laws and regulations and consider taking proactive measures to mitigate the risk of customs seizures like requesting a CBP Binding Ruling prior to importation. 
• be aware of the potential risks of customs seizures at the time of importation. 

• be aware of the potential for CBP to rely on guidance, policy or letters from other federal agencies, such as the DEA, in making their determinations. 

If you have any questions about the importation of merchandise into the U.S., contact info@diaztradelaw.com. 

U.S. Department of the Treasury’s Office of Foreign Assets Control

• On July 11, 2022, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) identified and designated an individual engaged in the trafficking of high-caliber firearms from the United States to one of Mexico’s most powerful drug organizations. Today’s action is the result of ongoing efforts by U.S. agencies and the Government of Mexico to disrupt Mexican drug trafficking organizations’ access to weapons, including those sourced in the United States. 
• On July 7, 2022, the OFAC, issued Venezuela Related General License 40A, effective immediately, authorizing certain transactions involving the exportation or re-exportation of liquefied petroleum gas to Venezuela. The license does not authorize any payment-in-kind of petroleum or petroleum products; or any transactions or activities otherwise prohibited by the VSR, prohibited by any other part of 31 CFR chapter V, or involving any blocked persons other than PdVSA, any entity in which PdVSA owns, directly or indirectly, a 50 percent or greater interest, or any Government of Venezuela person that is blocked solely pursuant to E.O. 13884.  
• On July 7, 2022, the Secretary of the Treasury along with heads of other U.S. agencies, delivered a framework for interagency engagement with foreign counterparts to President Biden. Principals under the framework include protecting U.S. global financial stability, reinforcing U.S. leadership in the global financial system, and promoting access to safe and affordable financial services.

U.S. Customs and Border Protection 

• On July 11, 2022, a Federal Register announced that the HTSUS General Note 3(b) is being updated to include Russia and Belarus as countries subject to column 2 duties as a result of being removed from the most favored nations and column 2 duties were increased on HTSUS subheading 9903.90.08 to 35% for numerous products listed in Annex A of the Notice. 
• As of July 16, 2022, the U.S. Customs and Border Protection (CBP) announced the members of the 16th term of the Commercial Customs Operations Advisory Committee (COAC). Congratulations to all new members.

The Food and Drug Administration 

• On July 13, 2022, the Food and Drug Administration (FDA) issued its first two warning letters to manufacturers for unlawfully marketing non-tobacco nicotine e-liquid products without the required authorization. FDA announced, it has issued 107 warning letters to retailers in the last two weeks for illegally selling non-tobacco nicotine products, including certain e-cigarette or e-liquid products, to underage purchasers. 
• As of July 24, 2022, the FDA announced the UNK is no longer an acceptable UFI and importers of food(s) subject to the FSVP regulation are required to have a DUNS number. After July 24, 2022, customs brokers must transmit an importer’s DUNS number when electronically filing entry for each line of food subject to the FSVP regulation. Electronic entries containing UNK in the Entity Number field will be rejected by CBP’s electronic import system. 

The Department of Justice  

• On July 8, 2022, the Department of Justice (DOJ) announced a federal grand jury in the District of New Jersey returned an indictment charging a resident of Florida with running a massive operation to traffic in fraudulent and counterfeit Cisco networking equipment with an estimated retail value of over $1 billion. Onur Aksoy, aka Dave Durden, 38, of Miami allegedly ran 19 companies formed in New Jersey and Florida, which imported tens of thousands fraudulent and counterfeit Cisco networking devices from China and Hong Kong.  

If you have questions about these updates, contact our Customs and International trade law attorneys at info@diaztradelaw.com or call us at 305-456-3830.

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In response to the increase in enforcement discussed below, Diaz Trade Law is hosting a NEI accredited webinar, FDA – Is it a Cosmetic, a Drug, or Both? Mitigating FDA Enforcement Actions to train industry on top compliance tips to avoid enforcement, and best practices in responding to various FDA enforcement.

Why Should Industry Register for the Webinar?

Warning Letters in 2021:

• Just yesterday, FDA teamed up with the Federal Trade Commission (FTC) to publicly admonish 5 companies with warning letters for illegally selling dietary supplements claiming to treat infertility because FDA advised the products are unapproved drugs.
• Since the beginning of 2021, alone, the FDA has already issued 260 warning letters. 55 of those warning letters were issued against firms, including cosmetic firms, for selling unapproved drugs that are misbranded or adulterated or selling unapproved and misbranded products related to COVID-19.

Import Alerts in 2021:

• FDA has 208 active import alerts. Since the beginning of 2021, the FDA has already updated 74 import alerts to add new violators. 4 of the 74 import alerts are specifically for unapproved drug violations:

• FDA has updated Import Alert 66-41 a total of 274 times since the beginning of 2021, with the most recent update on May 6, 2021. This import alert lists 379 violative cosmetic products which are (because of their claims) unapproved drugs. This import alert will be discussed in detail at the webinar. The speedy increase in the number of firms subject to the this import alert indicates that manufacturers, importers, and distributors of cosmetic and over-the-counter drugs must review their labeling and pre-compliance protocols to avoid being targeted by the FDA.
• Important to note that on February 25, 2021, FDA published Import Alert 62-08, which allows for the “Detention Without Physical Examination of Alcohol-Based Hand Sanitizers Manufactured in Mexico.”

This one-hour webinar will provide an overview of FDA regulatory enforcement actions. Our international trade attorneys will discuss top labeling dos and don’ts to lower your risk of FDA enforcement, while offering best practices. You will learn about FDA regulations and laws pertaining to over-the-counter (OTC) drugs and cosmetics marketed in the United States. The presentation will discuss real case scenarios. The objective of the webinar is to teach manufacturers, importers, and the like, how to navigate FDA’s regulatory framework, provide TOP compliance tips to avoid FDA enforcement actions, and top strategies to implement when you are faced with an enforcement action.

Manufacturers, importers, distributors, and others engaged in the production or sale of Over the Counter (OTC) drugs or cosmetic products are encouraged to attend our one-hour webinar, “Is it a Cosmetic, a Drug, or Both? FDA Enforcement Actions” either live on June 9, 2021 at 12:00 PM, or on demand thereafter.

Diaz Trade Law’s president, Jennifer Diaz, accompanied by DTL’s Associate Attorney Denise Calle, will be our featured speakers. Importers, exporters, brokers, and others interested in trade policy are encouraged to attend. REGISTER HERE!

Why Does CBP Stop Drug Paraphernalia?

• CBP secures America’s borders at and between ports of entry by stopping inadmissible people and illicit goods. The Tariff Act of 1789 provides one of CBP’s core functions: to act as the leading federal agency in determining the admissibility of goods that may enter the Commerce of the United States. Even though each State has internally legalized marijuana either for medical or recreational purposes, CBP still has the express power to authorize or not any merchandise that comes into the U.S. Thus, CBP can detain and seize “drug paraphernalia” even if you did not intend to use the product that purpose pursuant to 19 U.S.C. § 1595a(c) stating a violation of 21 U.S.C. § 863.

What Constitutes Drug Paraphernalia?

In 2014, a smoke shop owner imported different merchandise from China described as “glass hookahs and parts”. The Central District of California considered these products, which were valued at $82,933.64 as drug paraphernalia and thus detained and seized the merchandise pursuant to 19 U.S.C. § 1595a(c) for violations of 21 U.S.C. § 863. The U.S. sued the shop owner and the Court concluded that “despite…[the] erroneous characterization of the merchandise as ‘hookah pipes’…they are bongs, and are therefore barred from entry into the United States.”

To determine whether the product is drug paraphernalia, the Court will not only consider the Code, but also other relevant factors such as the existence and scope of legitimate uses of the product in the community and expert testimony concerning its use. Under 21 U.S.C. Section 863(e), the following items are used to determine if a product is drug paraphernalia:

(1) instructions, oral or written, provided with the item concerning its use;

(2) descriptive materials accompanying the item which explain or depict its use;

(3) national and local advertising concerning its use;

(4) the manner in which the item is displayed for sale;

(5) whether the owner, or anyone in control of the item, is a legitimate supplier of like or related items to the community, such as a licensed distributor or dealer of tobacco products;

(6) direct or circumstantial evidence of the ratio of sales of the item(s) to the total sales of the business enterprise;

(7) the existence and scope of legitimate uses of the item in the community; and

(8) expert testimony concerning its use.

There is no requirement that the violator had specific knowledge that the merchandise constituted drug paraphernalia. United States v. 160 Cartons of Glass Water Pipes, Case No. CV 12-8965- BRO (VBKx) (C.D. Cal. Mar.  10, 2014).

What Must You Refrain From Doing?

• Sell or offer to sell drug paraphernalia
• Mail drug paraphernalia or transport it through interstate commerce
• Import or Export drug paraphernalia

REMEMBER: CBP is the federal agency that has control over everything that is imported and exported to/from the U.S. and therefore, they have the power to detain and seize your products when it constitutes drug paraphernalia. This will continue to happen until Congress decides to enact a Federal Law that allows marijuana consumption on a federal level or drug paraphernalia within the U.S.

What Do You Do if CBP Detains and/or Seizes Your Merchandise?

CBP has the power to detain persons or merchandise and make admissibility decisions. If CBP believes merchandise should be detained, it is required to send a Notice of Detention no later than five (5) business days from the day of examination. Often, the Notice of Detention does not specify the circumstances of the detention or is not even issued. It is important during this detention phase to communicate with CBP to discuss why your merchandise should not constitute drug paraphernalia and should be released.

CBP also has the ability to seize your merchandise if it is contrary to law and CBP will send a Seizure Notice, which you will have 30 days to respond, and typically we respond in the form of a Petition. Seizure cases are complicated, it is best to hire an expert who knows the policies, internal procedures and practices of U.S. Customs. Most importantly, getting involved early in the detention process is the best way to tackle this issue.

Want to Know if Your Product Will be Considered Drug Paraphernalia Prior to Importing?

Prior to importing your product, we recommend you review your product with an expert and determine whether to request a Binding Ruling from CBP. In CBP Ruling HQ H150766, an importer inquired on whether its hookah and hookah components constituted drug paraphernalia. The major issue CBP decided was whether the hookahs are “primarily intended” for use with drugs since it is considered a multiple-use item. CBP ruled that hookahs are admissible merchandise into the United States and held that they are not considered drug paraphernalia based on the weight of the evidence addressing the 8 criteria as set forth in 21 U.S.C. § 863, specifically its intended use for tobacco and not drugs.

If you have questions on whether or not your product constitutes drug paraphernalia and are interested in requesting a binding ruling, or if CBP has detained or seized your product, contact our office at info@diaztradelaw.com or (305) 456-3830 for assistance.

What Are Tobacco Products and What’s Being Regulated?

New Tobacco Products Regulated include: All cigars (premium and domestic), pipe tobacco, e-cigarettes, e-hookah, e-cigars, vape pens, advanced refillable personal vaporizers, electronic pipes, hookah tobacco, dissolvable tobacco products, and nicotine gels. As well as any product made or derived from tobacco that is intended for human consumption, including any component, part, or accessory of a tobacco product. All of the above have been deemed tobacco products and are now subject to FDA regulation.

How Does FDA Regulations Affect Manufacturer, Distributor, Importer, and Retailer?

Under §1140.10; Each manufacturer, distributor, importer, and retailer is responsible for ensuring that the cigarettes, smokeless tobacco, or covered tobacco products it manufactures, labels, advertises, packages, distributes, imports, sells, or otherwise holds for sale comply with all applicable requirements under this part.

Hookah/Vape Shops Become Manufacturers.

An additional effect of the new deemed tobacco products by the FDA will consider, and regulate some retailers as manufacturer. Under §1140.3 manufacturer means any person, including any rapacker and/or relabeler, who manufactures, fabricates, assembles, processes, or labels a finished tobacco product. This means that retailers that mix e-liquids for e-cigarettes or vapor devices, that prepare, compounds or process tobacco products will meet the definition of tobacco product manufacturer.

Rules, Regulations, and Requirements for Tobacco Products   

Methods of Sale

In Person Sales

Under the FDA regulation retailers may only sell cigarettes or smokeless tobacco to:

• persons over the age of 18,
• whose age is verified by means of photographic identification containing the bearer’s date of birth,
• in a direct, face-to-face exchange without the assistance of any electronic or mechanical device.

Tobacco products regulation is slightly different. Retailers may only sell tobacco products to:

• persons over the age of 18,
• whose age is verified by means of photographic identification containing the bearer’s date of birth.

Internet Sales

Retailers may, however, sell tobacco products (not including cigarettes or smokeless tobacco) with the assistance of electronic or mechanical devises, if the retailer can ensure that no person younger than 18 years of age has access to it. This leaves the internet as a possible method of sale, as long as the retailer can ensure that no person under the age of 18 is allowed access. The FDA added a comment to this specific issue saying that it did not intended to prevent the sale of tobacco products over the internet, as long as it was to persons over the age of 18 only.

Vending Machine Sales

This also means, that a retailer may sell tobacco products with the use of a vending machine, if the retailer can ensure that no person under 18 is allowed in the area where the vending machine is located.

Warnings, Advertisement, And Packaging.

All tobacco product’s, other than cigars, packages must bear a required warning statement on the package label. “WARNING: This product contains nicotine. Nicotine is an addictive chemical.” Advertisements must display this warning in the ad as well, in order to be lawful. Both warnings (package and advertisements) are subject to FDA regulation and standards.

Cigars are subject to additional warnings, besides the nicotine warning. These warnings include warnings about cancers of the mouth and throat, warnings about lung cancer and heart disease, and warnings about smoking while pregnant. Advertisements of cigars must display this warning as well. Both Warnings are subject to FDA regulation and standards.

Warning Plan Required – Rotating: Cigars manufacturers, retailers, importers, and distributors must have a warning plan on how warnings will be randomly displayed, distributed on packages, and rotated on advertisements, this plan must be submitted to and approved by the FDA.

Additional Regulation for manufacturers

Pre-Market Review and Pathways

Just like manufacturers and importers of cigarettes, smokeless tobacco and roll your own tobacco, manufacturers and importers of the newly deemed tobacco products will need to comply with premarket review requirements.

There are three pathways to enter into the US newly deemed “tobacco” products, and its extremely important to keep in mind that pre-market review requirements will consistently include the predicate date (grandfather date) of February 15, 2007, which means, because your product was commercially marketed in the United States, without any modifications, as of February 15, 2007 you are therefore “grandfathered in” and are not a “new” product and therefore, don’t have to comply with one of the 3 pathways below:

1. Premarket tobacco product applications (PMTA – 24 months to submit your application),
2. Substantial Equivalence (SE – 18 months to submit your application) – Provide data to demonstrate that the characteristics of your new product are the same as the predicate that’s been on the market by or before February 15, 2007 (or differences don’t raise new questions of public health), or
3. Exemption from Substantial Equivalence (SE Exemption – 12 months to submit your application) – The importers and manufacturers of tobacco products that were on the market between the grandfathered date and August 8, 2016, will have to submit a substantial equivalence (SE exemption) request to keep their products on the market.

Compliance with the FDA can be complicated and exacting, especially if you have products already on the market and aren’t sure which pathway will apply to you and you want to make sure you meet your deadline to continue marketing your product. You’ll need to ensure you have an expert by your side to assist you through the process.  Diaz Trade Law specializes in compliance with the FDA and other regulatory government agencies – Call 305-456-3830 or email info@diaztradelaw.com today for a consultation!  Visit www.diaztradelaw.com for more information.

If the proposed rule became final – e-cigarettes (and the other products “deemed” tobacco products) would have been subject to:

(1) Enforcement action against products determined to be adulterated and misbranded;
(2) required submission of ingredient listing and reporting of harmful and potentially harmful constituents (HPHCs) for all tobacco products;
(3) required registration and product listing for all tobacco products;
(4) prohibition against use of modified risk descriptors (e.g., “light,” “low,” and “mild” descriptors) and claims unless FDA issues an order permitting their use;
(5) prohibition on the distribution of free samples; 
(6) premarket review requirements;
(7) Requirement for a minimum age of purchase; (what this will do to online sales was yet to be determined)
(8) health warnings for product packages and advertisements; and
(9) prohibition of vending machine sales, unless the vending machine is located in a facility where the retailer ensures that individuals under 18 years of age are prohibited from entering at any time.

After analyzing the proposed rule and its potential economic effects, the White House’s Office of Management and Budget (OMB) intervened to weaken the proposed regulations of e-cigarettes and cigars.
The major OMB changes include:

• This biggest of all changes is this one – Editing the FDA’s “prohibition of non-face-to-face sales (e.g. vending machines)” to “prohibition of vending machine sales,” leaving online sales of e-cigarettes unrestricted.
• Deleting language detailing the FDA’s concerns about the safety of e-cigarettes, specifically the FDA’s review of electronic cigarette cartridges. The FDA sought to reduce “threats to the public healthy by investigating and responding to … poor quality control, significant variability in nicotine content, and the presence of humectants such as diethylene glycol – a chemical that has caused mass poisonings in other consumer products.”
• Deleting language regarding electronic cigarette manufacturing concerns, specifically a proposal that the FDA would review e-cigarette cartridges for evidence of poor quality control, variable nicotine content or toxic ingredients.
• Deleting extensive language in which the FDA calculated how many lives might be saved by regulating cigars. The FDA estimated a “welfare gain” of $16 million to $52 million from dissuading people from smoking cigars.
• Removing the FDA’s cost-benefit analysis stating that exempting premium cigar manufacturers from issuing large warning labels would save the industry $1 million to $3 million, while incurring public health costs of $32.6 million to $34.2 million.

In a change that impacts “premium cigars” – the OMB also changed the FDA’s proposed rule from a two-part rule – one for traditional tobacco products and one for products that have not previously been regulated – into a “two-option” rule. Option 1 would deem all products meeting the statutory definition of “tobacco product” except accessories to be subject to the FDA’s control. Products that meet the statutory definition of “tobacco products” can include certain dissolvables, gels, hookah tobacco, e-cigarettes, cigars and pipe tobacco. Option 2, is the same as option 1 except that it exempts premium cigars.

The cigar industry has aggressively lobbied Congress for such an exemption to the proposed rule. In a December 2013 letter to Margaret Hamburg, FDA Commissioner, and Sylvia Mathews Burwell, Secretary of Health and Human Services and former Director of OMB, 24 Republican members of Congress (that represent premium cigar manufacturers) asked that premium cigars be exempt from the proposed rule. “As you know,” they wrote, “premium cigars are a niche product with an adult consumer base, much like fine wines. The majority of people who enjoy a cigar do so occasionally, often in social or celebratory settings.”

In Reuter’s June 25 article, Emily Cain, a spokeswoman for OMB, explained that “it is routine for agencies to make changes to their draft rules during the course of OMB review.” Adding that “the goal is to maximize the effectiveness and benefit of the rules we complete.” FDA spokeswoman Jennifer Haliski said the FDA does not comment on changes to a proposal during the review process but encouraged the public to comment on the proposal. The period for the public to comment has been extended until August 8. “All comments will be carefully considered as the final rule is being developed,” she said. “As the science base continues to develop for these products, the agency has the ability to take additional regulatory actions designed to further minimize the public health burden of tobacco use in this country.”

The FDA extended the comment period to August 8th.  Do you have comments on the proposed rule? Do you need lobbying assistance like the premium cigar manufacturers had? Do you need help submitting your comment? If so, let’s discuss, email me at jdiaz@bplegal.com.

Co-Authorized by Melissa Rodriguez, a law clerk at Becker & Poliakoff and a student at the University of Florida Levin College of Law.

On April 24, 2014, the U.S. Food and Drug Administration (FDA) announced what some call a “long- awaited” proposed regulation that will impact the future of the currently booming e-cigarette industry. Currently, e-cigarettes are not a part of FDA’s purview and have no FDA oversight – FDA’s proposed rule intends to change this in a big way.

How is Tobacco Defined Currently?

Section 201(rr) of the Federal Food, Drug and Cosmetic Act (FD&C Act), (21 U.S.C. 321(rr)),as amended by the Family Smoking Prevention and Tobacco Control Act (Tobacco Control Act), currently defines the term “tobacco product,” as ” any product made or derived from tobacco that is intended for human consumption, including any component, part, or accessory of a tobacco product… “. The Tobacco Control Act permitted FDA to regulate cigarettes, cigarette tobacco, roll-your-own tobacco, and smokeless tobacco automatically as “tobacco product” under the FD&C Act. Section 901 of the FD&C Act  gives the FDA leeway to include “any other tobacco products that the Secretary by regulation deems to be subject to this chapter” and therefore subject to FDA regulation under the FD&C Act.

“Deeming”

The FDA is proposing to “deem” products meeting the statutory definition of “tobacco product,” except accessories of a proposed deemed tobacco product, to be subject to the FD&C Act. The FDA proposed 2 options for public comment. Option 1 extended the definition of “tobacco product” in the FD&C Act to “electronic cigarettes, some or all cigars, pipe tobacco, nicotine gels, waterpipe (hookah) tobacco and dissolvables not already under the FDA’s authority”.  Option 2 deleted premium cigars from the equation.  In both cases, accessories are not included.

New Changes

Bottom line, if the Proposed Rule becomes final, the products that will be “deemed” tobacco products would be subject to:

• (1) Enforcement action against products determined to be adulterated and misbranded;
• (2) required submission of ingredient listing and reporting of harmful and potentially harmful constituents (HPHCs) for all tobacco products;
• (3) required registration and product listing for all tobacco products;
• (4) prohibition against use of modified risk descriptors (e.g., “light,” “low,” and “mild” descriptors) and claims unless FDA issues an order permitting their use;
• (5) prohibition on the distribution of free samples; and
• (6) premarket review requirements

FDA would also impose:

• (1) Requirement for a minimum age of purchase; (what this will do to online sales is yet to be determined)
• (2) health warnings for product packages and advertisements; and
• (3) prohibition of vending machine sales, unless the vending machine is located in a facility where the retailer ensures that individuals under 18 years of age are prohibited from entering at any time.

Premarket Review

The proposed rule discusses a “premarket review” process for new “deemed” tobacco products.  The FDA stated:

The statute establishes a “substantial equivalence” (SE) pathway for a new tobacco product to enter the market if it is substantially equivalent to a “predicate product,” meaning a product commercially marketed in the United States as of February 15, 2007. FDA is proposing to extend the compliance period for submitting a marketing application under this pathway to 24 months following the effective date of a final rule. FDA is also proposing a 24-month compliance period for the submission of premarket tobacco applications (PMTAs). In addition, we intend to continue the compliance policy pending review of marketing applications if those applications are submitted within the 24 months after the final rule’s effective date.

Smoking Cessation Products

Products that are marketed for therapeutic purposes, like electronic cigarettes claiming to help you stop smoking, will continue to be regulated as medical products under the FDA’s existing drug and device authorities in the FD&C Act.

Flavor Debate

Luckily for e-cigarette companies, the prohibition against characterizing flavors established in the Tobacco Control Act currently applies to cigarettes only. FDA requests comments on the characteristics or other factors it should consider in determining whether a particular tobacco product is a “cigarette” as defined in section 900(3) of the FD&C Act and, consequently, subject to the prohibition against characterizing flavors, despite being labelled as a little cigar or other non-cigarette tobacco product. FDA is also seeking research regarding the long-term effects of flavored tobacco product usage including data as to the likelihood of whether users of flavored tobacco products initiate cigarette usage and/or become dual users with cigarettes. FDA provided research findings in its Proposed Rule that “flavored product use is higher among 18-to-24-year-olds than 25-to-34-year-olds” and requested that comments be filed that address “what additional actions, if any, should FDA take to address the sale of candy and/or fruit-flavored tobacco products to children and young adults?”

FDA & E-Cigarette Industry Feedback

In the FDA’s blog, Margaret Hamburg, Commissioner of the FDA, said

Today we usher in a new chapter in FDA’s role in tobacco control, which began nearly five years ago when the Family Smoking Prevention and Tobacco Control Act enabled us to regulate certain tobacco products, including cigarettes and smokeless tobacco. Now, FDA has proposed a rule that would extend our authority to additional products meeting the legal definition of a tobacco product. This would include electronic cigarettes, some or all cigars, pipe tobacco, nicotine gels, waterpipe (hookah) tobacco and dissolvables not already under the FDA’s authority, as well as future tobacco products. … FDA is committed to protecting public health. Expanding our authority over tobacco products gives FDA additional tools to help reduce the number of illnesses and premature deaths associated with the use of tobacco products. Under FDA’s proposal, these powerful regulatory tools would include age restrictions, rigorous review of new tobacco products and claims, and health warnings.

Reactions from the e-cigarette industry reported in various news sources were mostly favorable and are summarized below: Washington Post reported mixed reviews –

• “This is worse than I expected,” said Greg Conley, a board member of the American Vaping Association, who said he welcomed the age-restriction rules but had hoped the FDA would grandfather in existing products, rather than force e-cigarette makers to file lengthy applications for any product on the market dating to early 2007. “A lot of these companies, they are supporting several employees, investing any profits back into their business … They can’t afford this, and it’s going to lead to a whole lot of consolidation and increased prices for consumers.”
• “What they did today was very encouraging … We’ve already done many things to prepare ourselves and act responsibly,” said Miguel Martin, president of Logic Technology Development one of the nation’s leading e-cigarette companies. “At least speaking for my company, this will not be the tobacco wars of the 80s and 90s.”

CNBC reported the main concern I noted, the proposed “pre-approval” process for e-cigarettes, as well as many positive comments by e-cig companies summarized here:

• “But one concern among e-cig advocates was that the Food and Drug Administration’s proposal that all e-cig products first receive FDA approval before being sold would slow down the ability to introduce technological improvements in the battery-powered devices, which could in turn harm efforts to convert smokers of cancer-causing tobacco cigarettes.”
• “Any ‘Johnny-come-lately’ will not just be able to throw a product out to the public without it in any way, shape or form being regulated,” said Jeff Holman, president of the e-cig company Vapor Corp. “I think it raises the bar.”
• “I’m very encouraged” by the proposed rules, said Miguel Martin, president of LOGIC, the second-best-selling e-cig company in the U.S., according to recent Nielsen surveys. … “There’s no question that the FDA’s oversight, which we welcome, brings legitimacy to the category,” Martin said. “Companies that are acting responsibly, I think, will be given every opportunity to be successful from a business perspective.”
• Rob Burton, director of corporate regulation affairs at White Cloud Electronic Cigarettes, was pleased there was no outright ban on flavoring proposed by the FDA. White Cloud sells e-cig liquid in five different strengths—including zero-percent nicotine—and in 19 different flavors.
• “With these proposed deeming regulations, we believe FDA has an unprecedented opportunity to advance public health goals by recognizing that some types of tobacco products may have significantly lower risks compared to cigarettes,” Altria said. “We believe FDA should adopt a regulatory framework that recognizes the differences in tobacco products and fosters innovation that may benefit public health. The framework must be grounded in science and evidence. FDA is in the best position to assess the science and determine how best to communicate relative risk information to consumers.”

Comments?

Do you have comments on the proposed rule?  You have 75 days (until July 9) to get your thoughts together, and send them to the FDA here, reference Docket No. FDA-2014-N-0189. FDA requests that parties provide comment and scientific evidence on the Proposed Rule – and specifically on:

• How the FDA should address the sale of candy/fruit flavored tobacco products to children. The current prohibition on flavored cigarettes and whether or not that should also apply to other “deemed” tobacco products.
• Whether FDA should proceed with option #1 “deeming” “electronic cigarettes, some or all cigars, pipe tobacco, nicotine gels, waterpipe (hookah) tobacco and dissolvables not already under the FDA’s authority” as tobacco products or #2, not including cigars as “deemed” tobacco products
• Pre-approval process – specifically, whether and, if so, how FDA should consider a different regulatory mechanism for newer proposed deemed tobacco products that cannot, as a practical matter, use the substantially equivalent (SE) pathway.
• Whether the FDA should stagger the compliance dates for the protection of public health.
• Behavioral data related to co-use of e-cigarettes and more traditional tobacco products, including data on the effects of e-cigarettes on the initiation and continuation of use of other tobacco products.
• How e-cigarettes should be regulated; scientific data on whether they are less hazardous than combustible products.

State Regulation

We still have to remember, states can also set more restrictive rules.  American Nonsmoker’s Rights Foundation has published a list of state and local laws regulating the use of e-cigarettes.