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Shifting Regulatory Landscape is Felt at Tobacco Plus Expo

2/9/2020
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The wide-reaching impacts of changing regulation and health concerns were evident in the products on offer at 2020’s Tobacco Plus Expo (TPE). This past January, exhibitors from across tobacco gathered in Las Vegas to show off their products and discuss the future of the industry. Split between traditional products like pipe and tobacco cigar tobacco, and trendy vapor products, the show reflected an industry in flux.

CBD continues to gain steam despite recent challenges

Compared to 2019’s conference, the selection of CBD products on display at TPE 2020 has rapidly expanded. Products ranged from edibles to e-liquids and even products for pets. The strong presence of these products is a testament to the growing popularity of the use of CBD for a growing number of applications from relaxation to pain relief.

Speakers at TPE’s education sessions highlighted not only the growth of this category but also the significant threat it faced in late 2019 following the outbreak of vaping illness caused by black market THC vaping cartridges. Although no CBD products were implicated in the illness, some consumers may have avoided CBD products due to confusion over its connection with THC. Many CBD product manufacturers at TPE reacted to this crisis by placing greater emphasis on the safety of their products by prominently featuring information on manufacturing methods used in their products as well as the country in which they were produced.

While THC products, the other significant category of cannabis products were not present at the show, the effects of legalization in various US states in 2019 and the possibility of further states allowing sales were clearly felt at TPE. This year’s show featured a larger number of producers of accessories for cannabis such as glass pipes, one of the most common tools used for consuming marijuana.

Regulation still looms large

The commonalities between the legal marijuana and tobacco industries were also a recurrent topic of discussion as panelists and presenters discussed the flow of tobacco professionals, already comfortable with heavy government oversight, into the marijuana industry. Panelists in marijuana centric education sessions also highlighted their focus on providing products tailored to specific consumers and need states. Rather than expecting consumers to educate themselves about the components of cannabis, this approach to cannabis explicitly labels products that offer the correct combination of components to provide energy, focus and other need states.

Looming U.S. legislative changes had perhaps the largest effect on the selection of products available at TPE. The FDA announcement of prioritized enforcement against non-tobacco and menthol flavors in closed system vapes meant that fruit and dessert flavors for closed systems were rarely seen on the show floor. Manufacturers of these kinds of vapes instead focused their lineup on a variety of tobacco and menthol flavors.

The May deadline for premarket tobacco applications which ask manufacturers to prove the safety of their products, also had an impact on products at TPE, especially on open system players. Many manufacturers making these kinds of vapes spoke of their intention to focus on markets beyond the US due to their uncertainty oh how their companies would fare after the deadline. Other open system companies discussed pairing back their lineup of flavors in preparation for the deadline.

Between discussions about the impact of regulation, new product innovations and changing manufacturer priorities, the biggest trends at TPE pointed toward an industry on the precipice of significant evolutions. Euromonitor will continue to closely monitor developments in tobacco this year and beyond.

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