CHANGE! HOW IS THE FUTURE OF VAPE?

March 14, 2022

Electronic cigarette regulation has changed dramatically! Only tobacco flavor, retail requires a monopoly license... Leading stocks crash 40%
2022-03-12 07:48 Source: Securities Times Author: Tang Wei
On the afternoon of March 11, the e-cigarette industry received two major news in succession. First, the detailed rules for the management of e-cigarettes were released, which will be implemented on May 1; the second is the second draft of national standards for e-cigarettes, which clearly said that e-cigarettes should not present flavors other than tobacco. This is regarded as the biggest negative for the e-cigarette industry.

A senior industry insider told reporters that at present, tobacco-flavored e-cigarettes account for a small proportion of domestic sales. If e-cigarettes are not allowed to add other flavors, the impact on the domestic market will be subversive. It's destined to be a sleepless night for people"

Electronic cigarette retail needs to apply for a tobacco monopoly license

On March 11, the State Tobacco Monopoly Administration issued the "Measures for the Administration of Electronic Cigarettes", which will take effect on May 1, 2022. The "Administrative Measures" include general provisions, production and quality management, sales management, import and export trade and foreign economic and technological cooperation, supervision and inspection, and supplementary provisions, with a total of six chapters and forty-five articles. Activities such as import and export and supervision and management are stipulated. In addition to the strict market access system, the listing of enterprises must be approved by the tobacco monopoly department.

Compared with the "Administrative Measures for Electronic Cigarettes (Draft for Comment)" issued on December 2, 2021, the "Measures for the Administration of Electronic Cigarettes" has 40 differences in the full text, including 9 new contents, 4 deleted contents, and 27 expressions adjusted. strip.

Specifically, the 9 new items include:

Article 8 The initial public offering and listing of stocks by the enterprises specified in the preceding paragraph shall be reported to the tobacco monopoly administrative department of the State Council for examination and approval.

Article 12 The tobacco monopoly administrative department of the State Council shall issue tobacco leaves, red-cured tobacco leaves, cut tobacco and other tobacco.

Article 20 Enterprises or individuals that have obtained the tobacco monopoly retail license and are qualified to engage in the retail business of electronic cigarettes shall purchase electronic cigarette products from local electronic cigarette wholesale enterprises, and shall not exclusively operate the electronic cigarette products sold on the market.

Article 21 It is prohibited to hold exhibitions, forums, expositions, etc. to promote electronic cigarette products in various forms.

Article 24: The transportation of electronic cigarette products, atomizers, and nicotine for electronic cigarettes shall be subject to the supervision of the administrative department of tobacco monopoly.

Article 30 Imported electronic cigarette products shall be subject to commodity inspection in accordance with relevant state regulations.

Article 41: Business entities in these Measures shall go through the relevant registration formalities with the market supervision and administration department in accordance with the law to obtain or change the relevant licensing items.

Article 43: Heated cigarettes are included in cigarette management. Other new tobacco products shall be implemented in accordance with the relevant provisions of these Measures.

Tang Shunliang, a professional lawyer in the new tobacco field of Beijing Zhonglun Wende Kunming Law Firm, believes that the addition of pre-examination procedures for e-cigarette companies to issue stocks can be understood as a benefit for e-cigarette companies to be listed.

According to the regulations, the establishment of electronic cigarette manufacturers, atomizer manufacturers and nicotine manufacturers for electronic cigarettes must be approved by the tobacco monopoly administrative department of the State Council, obtain a tobacco monopoly production enterprise license, and be approved and registered by the market supervision and management department; To engage in the retail business of electronic cigarettes, they shall apply to the tobacco monopoly administrative department in accordance with the law to obtain a tobacco monopoly retail license or change the scope of the license; electronic cigarette products shall meet the mandatory national standards for electronic cigarettes.

In addition, the "Measures for the Administration of Electronic Cigarettes" also mentioned that it is prohibited to sell flavored electronic cigarettes other than tobacco flavors and electronic cigarettes that can be added with atomizers; E-cigarette product manufacturers and e-cigarette brand owners that have obtained tobacco monopoly licenses shall sell e-cigarette products to e-cigarette wholesale enterprises through the e-cigarette transaction management platform; the import and export trade of e-cigarettes by the tobacco monopoly administrative department of the State Council Supervise and manage foreign economic and technological cooperation in accordance with the law.