State Regulatory

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In September, the U.S. Food and Drug Administration (FDA) issued two new rounds of warning letters to online retailers, manufacturers, and distributors for reportedly selling or distributing unauthorized e-cigarette products. Notably, FDA’s most recent letters target several popular disposable flavored products, including Elf Bar, EB Design, Lava, Cali, Bang, and Kangertech, which FDA states are particularly appealing to youth. FDA also sought civil money penalties against 22 retailers for failing to comply with prior warning letters and, for the first time, sought the maximum penalty allowed by law.

The Virginia ABC will assess a regulatory scheme for liquid nicotine, with the consultation of stakeholders, and issue a report and recommendations.

On April 12, the Virginia General Assembly enacted House Bill 2296 and Senate Bill 1350, incorporating recommendations of Governor Glenn Youngkin to have the Virginia Alcoholic Beverage Control Authority (ABC) “assess” a potential licensing scheme for liquid nicotine manufacturers, distributors, and retail dealers, as well as administrative and enforcement matters relating to liquid nicotine licensing, age verification, product verification, and advertising restrictions. These bills effectively instruct the ABC to tell the Virginia General Assembly whether and how the Commonwealth should regulate liquid nicotine. The ABC’s report and recommendations are due by November 1, and will be informed by stakeholder input. The enactments specify that the ABC will conduct its assessment “in consultation with stakeholders, including public and community health organizations, retailers, tobacco and vaporized nicotine companies, and wholesalers.”

The Troutman Pepper Tobacco Team was featured in part two of a two-part podcast on recent developments in the tobacco industry and what to expect for the coming year. In this podcast, Bryan Haynes, Agustin Rodriguez and Nick Ramos discuss tobacco excise taxes; challenges to flavor bans; FDA’s regulation of…

The Oregon Legislature’s 2023 regular session kicked off with a bang for the tobacco industry when House Bill 2128 (HB2128) was introduced at the request of Attorney General Ellen Rosenblum who also happens to the be president-elect of the National Association of Attorneys General. If passed, HB2128 would replace Oregon’s escrow deposit system, applicable to tobacco product manufacturers that are nonparticipating manufacturers (NPMs) under the Master Settlement Agreement (MSA), with an equity assessment. While HB2128 was only recently introduced and has a number of hurdles to overcome before it becomes law, we are not aware of any other state that has made a similar proposal to retroactively change escrow deposit systems for NPMs. Thus, HB2128 is worth monitoring, not only for its potential impact to Oregon NPMs, but also to see whether similar legislation will be introduced in other states.

The Senate recently passed the Medical Marijuana and Cannabidiol Research Expansion Act (the Act) by a voice vote after the House of Representatives passed the bill with strong bipartisan support (325-95) last July. The Act is the first stand-alone marijuana legislation passed in decades and, according to some news sources, President Biden will likely sign it within the next two weeks. Historically, conducting research with Schedule I controlled substances has been subject to numerous administrative hurdles and onerous security requirements that have deterred many potential researchers. The Act amends key sections of the Controlled Substances Act (CSA) to ease some of those restrictions and to facilitate research on marijuana and its potential therapeutic benefits, without changing marijuana’s designation as a Schedule I controlled substance. Some of the key provisions are summarized below.

On November 3, Judge Gary L. Sharpe of the U.S. District Court for the Northern District of New York issued a preliminary injunction, blocking cannabis regulators from issuing marijuana retail licenses for five geographic regions across the state, while a constitutional challenge to the program proceeds.