Vape Industry Uncertainty Could Benefit PODA Alternative
Vape issues, from teens taking up the habit in large numbers to health concerns, were dominating headlines a couple years back. In response to the industry’s sudden boom and the potential problems associated with vape use, the US Food and Drug Administration (FDA) created a set of standards and a new process for approving vape products, called a premarket tobacco application (PMTA). The deadline for submitting the application for products already being sold was September 2020, and as of now there are still more than a million applications pending.
Over the last two years, only three families of products have been approved by the FDA through the PMTA process: IQOS, a heat-not-burn (HNB) product created by Philip Morris; Vuse Solo, an e-cig product by RJ Reynolds, and Verve, smokeless oral tobacco products marketed by a subsidiary of Altria Group. Verve had previously been discontinued so its fate as a product remains unknown. The FDA has issued denials to more than 150 companies covering about a million products, ordering them to stop selling. Some of these companies are appealing through the court system, but the pattern is clear. It is VERY difficult to get a product approved through the costly and arduous PMTA process.
PODA Holdings, Inc. (CSE: PODA) (FSE: 99L) (OTC: PODAF) has developed a patented system and family of HNB products, the Beyond Burn Poda Devices and Pods, designed to reduce the risk associated with smoking. Similar in some ways, and according to PODA superior in other ways, to the IQOS products, Beyond Burn products contain a specialized blend of tea leaves and synthetic nicotine and are not subject to the PMTA approval process. This differentiating factor could give Poda a leg up in approaching the $800 billion global tobacco market with healthier alternatives.
CEO Ryan Selby discusses the PMTA and its implications for PODA Holdings.
What’s in a PMTA?
Filing a PMTA is no easy task, requiring all kinds of data and studies to back up four basic requirements. One, the product has to be safe. Two, it can’t create new nicotine users. Three, it has the ability to convert existing nicotine smokers to a reduced risk system. Four, the product needs to benefit society. That is a lot to ask from product manufacturers, and the complexity could be a partial explanation as to why the only approvals to date have been awarded to large corporations with plenty of resources.
Implied in the whole process is the idea that many applications may have been denied for lack of sufficient data or evidence. It seems unlikely that these three products are the only ones, out of millions of submissions, to actually meet the FDA standards. The courts will eventually decide all of this, but in the meantime denied products are being removed from shelves and pending applications are in a sort of limbo.
Poda’s synthetic nicotine/tea blend does not currently require a PMTA, meaning the company can market and sell its products without fear of regulatory denial. What’s more, should the PMTA ever be expanded to cover synthetic nicotine products like Poda, the company will have been gathering the necessary information on the benefits of its system to present to the FDA.
Poda has been ramping up sales and production as it rolls out Beyond Burn in key global markets. The company recently announced the shipment of 500,000 Poda Pods to a customer with distribution in Asia and Europe. Poda’s current production capacity in its pilot production facility is about 400,000 pods/month. With the model proven and demand increasing, the company is in the process of expanding that capacity to 10 million/month.
In a major development, the company appointed industry veteran Christoph Tepr as its VP of European Sales & International Expansion. Tepr previously held key sales and management positions with Philip Morris’ IQOS division, vape giant JUUL, and British American Tobacco’s HNB product division. He will be tasked with establishing Poda’s European operations and appears to have the perfect background for the job.
Overall, Poda represents an early-stage opportunity with an innovative company in a very large market. Health and regulatory trends are pushing the market in Poda’s direction, and it’s up to the company to execute on the opportunity. Early signs are encouraging.
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