When Taylor Cage attends the Tobacco Plus Expo (TPE) in Las Vegas every year, she keeps an eye out for the next hot product. Usually held in January, TPE tends to be a solid indicator for where the nicotine industry will go next.
In 2020, when Cage attended, “it was all about disposables,” she said. And the evolution of the industry that year—as well as the news coverage around it—certainly supports that claim. Puff Bar, which became the most villainized vape of this kind (used until they run out of e-liquid and then tossed away), briefly seemed to replace Juul as abstinence-only prohibitionists’ biggest target.
In 2021, Cage, a board member of the Smoke-Free Alternatives Trade Association, noticed another clear market trend blossoming. “I think we’re about to see a real explosion of pouches,” she told Filter, referring to the smokeless and usually spitless alternative nicotine products—packed with chewing gum-like fillers, sweeteners and flavorings—that you place between your upper gum and lip. “It’s on the horizon,” she continued.
It might already be here. As major health groups like the American Cancer Society and tobacco control organizations like the Campaign for Tobacco-Free Kids continue to demonize vaping, savvy players are searching for ways to either escape from a tumultuous political landscape or to target a ripe yet relatively untouched corner of the marketplace.
They may have uncovered possible solutions in “tobacco-free” or synthetic nicotine, which—found in many of these nicotine pouches—seem to exist in a hazy regulatory framework. Or at least, the latter does.
There are some working, if somewhat disputed, definitions of these phrases.
“Tobacco-free nicotine” usually simply indicates “tobacco-derived nicotine”—nicotine culled from the tobacco leaf, like that in the vast majority of nicotine vaping products, which does not contain tobacco. The phrase is therefore arguably a form of branding without technical value. (It can also mean nicotine extracted from another source, like tomatoes or other plants from the nightshade family, but that’s rare.)
“Synthetic nicotine,” on the other hand, is exactly what it sounds like: nicotine created in a lab or through an industrial process similar to how pharmaceuticals are made.
We are entering what’s often labeled a “whack-a-mole” scenario—in which innovators remain endlessly a step ahead of regulators.
The terms, while distinct from one another, have become confused and, consequently, somewhat synonymous. Part of that, perhaps, comes down to the chemistry itself: Industry chemists, speaking to Filter on background, noted that it’d be difficult even for them to distinguish between, say, high-grade tobacco-derived nicotine and synthetic nicotine. Regardless, “tobacco-free nicotine” and “synthetic nicotine” are uttered interchangeably by almost all parties. And not without potential implications.
Because at the moment, we are entering a new phase of what’s often labeled a “whack-a-mole” scenario—one familiar to students of drug prohibition and Novel Psychoactive Substances—in which innovators remain endlessly a step ahead of regulators.
Much of what can happen already occurred with e-cigarettes: In 2009, President Barack Obama signed the Family Smoking Prevention and Tobacco Control Act into law and gave the Food and Drug Administration (FDA) the power to regulate “tobacco products.” But the FDA waited until 2016 to “deem” vaping products under its regulatory umbrella, and even longer to demand that manufacturers submit a premarket tobacco product application (PMTA) to remain legally on the market.
Two things emerged during that time: Vaping evolved to such a point that more and more smokers were using the products to switch from far more dangerous combustible cigarettes; and teen experimentation began, triggering breathless coverage of a so-called youth “epidemic.”
Now, manufacturers, tobacco harm reductionists and public health scholars are bracing themselves for what many anticipate might be yet another “Wild West” scenario in the alternative nicotine market, where authentic experimenters and opportunists alike have seemingly uncovered a fresh “loophole” in the FDA’s authority: using synthetic nicotine or, simply, claiming to.
Several market analysts have echoed Cage’s observation: In one research report by Piper Sandler reviewed by Filter, the financial services company noted that 2021’s TPE featured many new brands of nicotine pouches and vapor products that used “tobacco-free nicotine” (TFN). The analyst wrote that TFN might be something of “a golden ticket”—free from FDA regulation, tobacco taxes, flavor bans, and restrictions on direct-to-consumer e-commerce. (Here, the analyst is employing “tobacco-free” to mean “synthetic.”)
These are all elements, of course, that have come to plague the vaping industry: The FDA is currently reviewing PMTA applications to determine which vaping products can legally remain on the market; a handful of states have jacked up vaping taxes, sometimes to the same level as combustible cigarettes; many states, cities and other jurisdictions have issued flavor bans in the hopes of deterring teenagers from vaping; and the Prevent All Cigarette Trafficking (PACT) Act essentially prevents vaping companies from mailing their products directly to consumers.
“What we’re dealing with, again, are people simply being entrepreneurial,” David Sweanor, a tobacco industry expert and chair of the Advisory Board for the Centre for Health, Law, Policy, and Ethics at the University of Ottawa, told Filter when asked about the surge in pouches. “If you look at the global market for cigarettes, it’s not that far short of $1 trillion a year. If you can get one ten-thousandth of that market, you could be a billionaire.”
In many ways, this economic pivot is a game of semantics. The FDA defines a “tobacco product” as anything “made or derived from tobacco that is intended for human consumption, including any component, part, or accessory of a tobacco product.” (My emphasis.) On the most technical reading, this terminology would preclude the agency from treating synthetic nicotine as it does other nicotine products, which are almost always derived from tobacco.
“What happens when the nicotine is no longer derived from tobacco? It’s no longer a tobacco product, and the FDA doesn’t have jurisdiction.”
But again, we have seen this kind of language wrestling before, as vape producers attempt to devise novel methods to tiptoe out of the FDA’s bureaucratic reach. Some of them, especially those who had been transitioning toward the cannabis business or entertaining it, recently identified a savior in Delta 8—a hemp-derived cannabinoid that remains federally legal thanks to the wording of the 2018 Farm Bill. And because “tobacco-free” and synthetic nicotine do not have overwhelming chemical differences, it’s easy to imagine a scenario in which less-than-truthful actors take advantage of vague diction and a not-totally informed customer base.
In the end, the Piper Sandler analyst concluded that tobacco-free nicotine might pose increased competition for Big Tobacco’s nicotine pouches and vapes, suggesting that these products could be commercially attractive to the tobacco giants down the line.
“What happens when the nicotine is no longer derived from tobacco?” Sweanor asked, concluding: “It’s no longer a tobacco product, and the FDA doesn’t have jurisdiction. If the FDA then tries to assert jurisdiction, how long will that take? How established could the companies get?”
Few expect the FDA to act fast. It’s likely that when President Obama put his signature on the Family Smoking Prevention and Tobacco Control Act, Congress had not taken synthetic nicotine—or the prospect of it—into account. Plus, up until now, the government really hasn’t had to deal with it. (An FDA spokesperson declined Filter’s request for comment.)
Eric Lindblom, a senior scholar at Georgetown’s O’Neill Institute for National and Global Health Law and a former director of the FDA’s Center for Tobacco Products Office of Policy, sees two avenues the FDA can take. The first, which he views as unlikely, is that the agency could assert jurisdiction over synthetic nicotine as a tobacco product and argue that, when the legislation was written, nobody had the foresight to consider synthetic nicotine. The second is that it could claim synthetic nicotine doesn’t have the special privileges of a tobacco product—and therefore must be regulated like any other drug.
“They’ll probably wait until Congress orders them to take action, or some crisis appears.”
In the short term, though, the FDA could conceivably send warning letters to companies manufacturing synthetic nicotine products, explaining that they’re operating illegally—claiming either that their products are not actually synthetic nicotine and must go through the PMTA process; or that even synthetic nicotine is still technically a “tobacco product;” or that synthetic nicotine is an unregulated and unauthorized drug.
Because of the FDA’s so-called “enforcement discretion,” the agency can also choose not to enforce requirements if it believes the risk of a given product is low.
“FDA takes so little concrete action, especially in any newer or or potentially controversial areas,” Lindblom told Filter. “They’ll probably wait until Congress orders them to take action, or some crisis appears, like market shares increase or these companies start advertising in some way that creates youth initiation.”
“The agency always wants to fully understand a situation before taking any action and wants to ruffle so few political feathers,” Lindblom continued. “If they think these synthetic nicotine products are less harmful, though, they might just be thinking that they’re a low priority. If there’s no real public health consequence yet, they might not bother with it. They have so much else on their plate.”
“Is Zyn the Next Juul?”
If the outrage cycle is evidence enough, Cage, Sweanor, and the bevy of financial experts look to be right about the imminent explosion of the tobacco-free and synthetic nicotine market. In predictable fashion, anti-nicotine crusaders and mainstream tobacco controllers have apparently caught on. Recently, they’ve turned their attention to Zyn—a “tobacco-free” nicotine pouch sold by Swedish Match, a company perhaps best known for its popular oral tobacco product snus. (There is no suggestion that Swedish Match is using the term “tobacco-free” to imply that its product is not tobacco-derived.)
In June, SF Weekly published a long piece titled, predictably, “Is Zyn the Next Juul?”
“The industry’s latest trick doesn’t even contain tobacco, in many cases, instead isolating the cravable, joltable active ingredient of tobacco products,” the author writes. “Nicotine pouches, like the popular brand Zyn, are a sort of cross between nicotine gum and dipping tobacco. They add a high-tech, user-friendly sheen to a form of nicotine ingestion that might otherwise be seen, at least here in San Francisco, as a decidedly un-sexy way to get your fix.”
But while Zyn and other oral tobacco products are gaining recognition, they have not yet had the cultural or financial impact of something like Juul—which, despite its portrayal as the poster child for youth vaping, still holds a much larger chunk of the alternative nicotine marketplace.
Another reason that Zyn has perhaps just begun to attract mainstream attentions is because Swedish Match has followed procedure to a tee: The company submitted a PMTA for its Zyn product to the FDA “well before” the September 9 deadline, Brian Erkkila, the director of regulatory science at Swedish Match and the former lead toxicologist at the FDA’s Center for Tobacco Products’ Office of Science, told Filter. Like so many others, it’s waiting to hear back. (The agency has received literally millions of such applications, since every e-liquid flavor, device, battery, and so forth must have a separate submission.)
“We have done the science in preparation for the PMTA applications, which show that the harmful and potentially harmful constituents—the HPHCs—are either super low or undetectable,” Erkkila said. “We have very tight, strict, regimented manufacturing processes. It’s a product that does transition smokers to a less harmful form of nicotine. Part of that is we’ve done the science to show these deserve authorization through a PMTA.”
But with the potential proliferation of tobacco-free or synthetic nicotine pouches, some producers fear that lackadaisical regulations will draw in fly-by-night types, who bounce from loophole to loophole without much thought to safety and with only financial incentives in mind.
Ronald Tully is one of those critics. A longtime tobacco industry lobbyist, in 2014 he started his own consultancy business and, alongside some partners in the industry, began to look into synthetic nicotine through Next Generation Labs. “We see a broad economic market opportunity for synthetic nicotine,” he told Filter. They’re trying to see if synthetic nicotine can be commercially viable. With a pilot manufacturing plant in San Diego, California, they developed patented technology to scale it industrially.
“That scaling technology is really the part that we’re bringing to the industry,” said Tully, who views his product as truly “tobacco free.” His website proclaims “beware of the fakes,” and he has trademarked “TFN.”
“I’m sort of disappointed at the behavior across the board because we were the first,” Tully told Filter. “We led this market. We created this market. We created the opportunity for this technology to exist. And there’s just a bunch of latecomers jumping in and trying to be opportunistic.”
“If you want to divorce yourself completely from tobacco, you’ll want nicotine that’s not derived from tobacco.”
Part of the goal, for Tully, is to make everything much cheaper—especially if they hope to compete with Big Tobacco. Originally, they were producing synthetic nicotine at $10,000 per liter. Over time, as the process was scaled and market demand increased, the cost has decreased to anywhere, Tully said, from $900 to $2,200 per liter. He adamantly dismisses the notion that Next Generation Labs has been trying to fall into some FDA loophole.
“A ‘loophole’ is a deficiency in the writing of the statute,” he said. “If the statute has been ill-conceived, and the regulation has been ill-drafted, it is not the responsibility of the industry to conform to some kind of idea that you can’t innovate in those spaces where the legislation doesn’t occur.”
Instead, Tully frames the value of his company’s products in terms of people looking to switch from smoking. “If you’re an adult consumer, and you’ve made a decision that you want to divorce yourself completely from tobacco, you’ll want to move toward nicotine that’s not derived from tobacco,” he said.
“The landscape around 2014, any kind of nicotine, whether it was in vaping devices or smoking-cessation products like gum, was all derived from tobacco,” he continued. “That requires a certain socioeconomic burden. It leaves consumers, really, with just one choice. If they wanted to quit tobacco, they would have had to keep supporting the tobacco industry to do it.”
Soon, he said, that might not be the case.
The Influence Foundation, which operates Filter, has received unrestricted grants from Juul Labs, Inc. Filter’s Editorial Independence Policy applies.