This post reports on some recent activities and decisions of vaping manufacturers.
Setting an election agenda: mobilizing against vaping regulations.
Over the past few months, federal proposals to restrict the types of vaping products that can be sold in Canada have become the target of industry-funded campaigns.
The Canadian Vaping Association (CVA), which represents specialty vape shops, has focused on opposing restrictions on flavours. Through its mobilization web-site, it has arranged for about 100,000 indivduals to send emails to members of parliament -- that's about 1 in 10 of all adult vapers in Canada. This was a lobbying season, and the CVA was the most active federal lobbyist group this April. Meanwhile, the Vaping Industry Trade Association (VITA), which represents vaping manufacturers and convenience stores, has focused on mobilizing opposition to limits on the amount of nicotine that can be put in vaping liquids.
The impact of these campaigns will be known later this spring, when the government does (or does not) finalize its plans to put a ceiling of 20 mg/ml of nicotine in vaping liquids, or introduce proposed regulations to restrict flavours.
Sayonara: Japan Tobacco is pulling out of the Canadian Vaping Market
In e-mails to its customers and on its web-site, Japan Tobacco has announced that its Logic vaping devices will be discontinued in Canada as of August. No explanation is offered, and the decision has not yet received much attention in the business or trade press. Japan Tobacco has not announced closures in European markets where nicotine levels are capped - like Ireland and the United Kingdom, although it has also withdrawn their brand from Iceland.
Click and Collect: Circumventing bans on selling flavoured vaping in convenience stores
Ontario and British Columbia continue to allow flavoured vaping liquids to be sold, but do not allow them to be sold in convenience stores. This is a problem for the tobacco companies (like BAT/Imperial Tobacco) who have powerful contracts and existing supply systems with 28,000 convenience stores and less sway with the 1,500 or so independent vape shops across Canada. The solution? Click and collect. BAT offers the option of an online transactions to purchase its VUSE vaping products, with pick up at the local Convenience store.
"Beyond Nicotine" BAT moves to market CBD vaping products in Canada
BAT has promised investors that it is moving "beyond nicotine" and will be selling products that deliver other drugs. It is currently test-marketing CBD vaping pods for its VUSE devices in Manchester, England. Recent trademark registrations in Canada suggest that it is preparing to sell them here too. This May, BAT registered trademarks for three CBD designs for Vuse pods - smooth berry CBD, Cool Mint CBD and Chilly Mango, CBD. It also registered the phrase "Ryde your Rhythm" for use with CBD and tobacco products. (There may be some regulatory complications - Health Canada has signalled that it will be reviewing the flavours permitted in cannabis vaping products).
There's an app for that: Bluetooth-enabled vaping devices
Last winter BAT's Finance Director, Tadeu Marroco, told investors that Canada would be the pilot site for a Bluetooth enabled VUSE device -- presented as a way to conduct age-verification. ("In summary, we are entering 2021 with good momentum across all three new categories, with some exciting new launches planed. In vapor, we are launching a Bluetooth enabled version of Vuse providing electronic age verification. The product will be launched in Canada, as a pilot market in the first half of 2021")
In 2020, the number of vaping products on the Canadian market grew, and prices dropped
The trade analyst group, ECigIntelligence, reported that between 2019 and 2020 number of vaping products for sale in Canada doubled (from 244 to 498), while the prices fell. Prices of the cheapest category - open pod systems -- fell by 20% over the year to an average of $30. There is currently no formal registry of products for sale in Canada, unlike the European Union, where companies are required to provide advance notice of market introduction. This results in publicly-available lists of products for sale, such as those maintained by the Belgian Ministry of Health.
Canada is the world's third largest vaping market
Italian trade analists Finaria reported that Canada had the third most valuable e-cigarette market, with U.S. $1.08 billion in revenue in 2020, slightly ahead of France and Germany. Ahead of Canada are the United Kingdom (with revenue of $3.1 billion) and the United States (with revenue of $6.2 billion). This is consistent with BAT's report last December that Canada was the second in its list of the 5 countries which made up 75% of the world's sales of closed vaping products (the others were the USA, U.K., France and Germany) .
JUUL changes management in Canada.
In April, Juul made two significant changes to its Canadian operations. It replaced its CEO and it withdrew from the Vaping Industry Trade Association. The first decision was implemented without much fanfare: Michael Nederoff was quietly replaced with Eric Omwega. (Mr. Nederoff is now heading a cannabis business). The following reason was provided for leaving VITA: "While we have appreciated the opportunity to collaborate with VITA (Vaping Industry Trade Association), we will not be renewing our membership as we are not aligned on too many critical policy issues. For example, we support Tobacco 21 legislation (raising the minimum purchase age of tobacco and vaping products to 21), enhanced access controls at retail, and limiting flavour options."
