Nicotine, also known as Niacin, is the main component of smoking addiction, and the related mechanism has been fully studied. It can be said that the essence of tobacco development is the development of nicotine delivery efficiency. The emergence of electronic atomization technology provides a more efficient and purer new way for smokers to ingest nicotine, an ancient but enduring “addiction-relieving” substance. With the development of market supervision and technological innovation, changes in various aspects of nicotine are also happening quietly.

The current nicotine price depends on the size of the e-cigarette market

Electronic cigarettes and other new types of tobacco are important applications of nicotine raw materials. According to 2020 data, the electronic cigarette industry accounts for about 82% of the total nicotine market sales, and the remaining share mainly belongs to the field of pharmaceuticals and biological agents.

The promulgation of the “Administrative Measures for Electronic Cigarettes” standardizes electronic cigarette products. Although there are not many expressions on nicotine, just one article may increase the cost of existing nicotine manufacturers-the administrative measures stipulate that the production of electronic cigarette products Tobacco leaves, red-cured tobacco leaves, etc. used by enterprises shall be purchased from tobacco enterprises that have the right to operate tobacco leaves and red-cured tobacco leaves. At present, nicotine producers mainly extract nicotine from tobacco leaf scraps, and this route may no longer be feasible in the future.

Bob, who works as an e-liquid manufacturer, said to [2 FIRSTS]: “At present, most of the nicotine is extracted from the leftovers of tobacco leaves. After the implementation of the management measures, the cost of extracting nicotine will increase, and the e-cigarette will follow. The price of nicotine has gone up, which has led to an increase in the cost of e-liquid.”

It is understood that the price of nicotine fluctuated abnormally last year, and the price difference reached 4 times. After the relevant departments regulated the price of nicotine, the price of nicotine has stabilized. Bob said: “For e-liquid factories, nicotine suppliers are basically the dominant position, and they have the pricing power. In January 2021, the price of nicotine per kilogram will be around 1,200, and by March Time has soared to more than 3,000 yuan, and at the peak in May and June, it reached 6,000 yuan per kilogram, and now the price is relatively normal, about 2,000 yuan per kilogram.”

After the implementation of the new regulations, both the supply and demand sides of nicotine have no dominance, which is highly similar to traditional tobacco

At present, the nicotine supply and demand market seems to be calm, but downstream e-liquid manufacturers are due to market competition, and the transaction price and profit of e-liquid are getting lower and lower. Increasing profits is a problem that major e-liquid manufacturers need to solve at present. The imminent implementation of e-cigarette management measures and national standards for e-cigarettes may become the direct cause of price fluctuations.

Mr. Zeng, who has more than ten years of experience in the e-cigarette industry, said: “There has not been a big change in price. After the implementation of the new regulations, upstream production costs may increase. For wholesale and retail, there may be part of the previous profits. It becomes a tax, and the days of high gross profit in the past are gone, thus entering a stage of small profit, and I guess that the capacity of the cartridge may increase, thereby increasing the profit margin.”

After the implementation of the new regulations, Mr. Zeng expects that the supply of nicotine will be limited and gradually transformed into planned supply, then its price will remain stable and relatively fixed after fluctuations, as will the entire domestic e-cigarette market.

The implementation of the national standard also has an impact on consumers

On November 30, 2021, the National Standard Information Public Service Platform released the draft for the mandatory national standard project of “Electronic Cigarette”. The new national standard clearly stipulates that the source of nicotine is the extraction method and the purity should not be lower than 99% (quality score), The tobacco raw materials required by the extraction method are strictly controlled, not only unified requirements for the main raw materials of new tobacco, but also a series of specifications:

1. The influence of nicotine concentration: achieving the best addiction relief effect within the specified nicotine concentration range will become the core competitiveness of manufacturers;

2. The influence of the total amount of nicotine: the capacity limit of the cartridge is relatively loose, and only the total amount of nicotine of a single cartridge is controlled;

3. The influence of nicotine release: It limits the possibility of using high power to increase nicotine delivery.

Bob believes: “The nicotine content of a cigarette is about 6mg. From the perspective of nicotine, 20mg/ml is not higher than the nicotine content of cigarettes, but the nicotine in electronic cigarettes has no irritating substances, which is different from traditional cigarettes. The burning of cigarettes contains thousands of different chemicals, so e-cigarettes must have relatively strong nicotine to bring a throat hit. If it is implemented according to 20mg/ml, it is not enough to satisfy old smokers.”

In the communication with Mr. Zeng, [2 FIRSTS] found that he seems to have a different understanding from Bob: “I think this issue should be said separately, for people who are not aiming at nicotine addiction, nicotine concentration is not so important ; For those who go for nicotine addiction relief, I think that through technical optimization, it should be basically satisfied, so the introduction of management measures has brought new issues to the optimization of electronic cigarettes.”

Like Mr. Zeng, Xing Chenyue, a Chinese-American female scientist and inventor of nicotine salts, was delighted with the introduction of the management measures: “I always feel that if an industry wants to develop healthily, it should be under a reasonable regulatory environment.”

The new regulation is not a restriction on e-cigarette nicotine, but a check and balance

Although the nicotine regulatory rules have not yet come out, it is estimated that the State Tobacco Administration will approve relevant qualifications in a planned way to guide the production behavior of enterprises, which is not only a production restriction, but also the beginning of standardized development.

[2 FIRSTS] When communicating with Bob, I found that he was more worried about the issue of license acquisition and nicotine distribution management after supervision: “I feel that each company may have a certain quota, that is, how much nicotine you can only use each month. , and then unified management, which may restrict the domestic e-cigarette market very obviously.”

However, Mr. Zeng, who has been in the industry for a longer time, has experienced the ups and downs of the domestic e-cigarette industry many times, and does not seem to have the same anxiety as Bob: “Although the regulatory rules have not yet come out, for nicotine and e-liquid production enterprises, safety, standardization, and standardization are important factors. To improve as soon as possible, there is a better balance for the development of both traditional tobacco and electronic cigarettes.

As one of the main raw materials of electronic cigarette products, nicotine can be said to be the lifeblood of the industry and is related to the development of the entire industry. Under the new regulations on e-cigarettes, the restriction of nicotine has doubled the pressure on e-liquid manufacturers, but this is a short-term impact. Under the standardized and standardized operation process, the R&D force and creativity will be improved, so that Chinese e-cigarettes will not only meet the needs of domestic users, but also Being able to conquer cities in the global market is the fundamental starting point for the formulation of new regulations on e-cigarettes.

Electronic Cigarette, Disposable Vape Pen – Aierbaita (aierbaitavapes.com)

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Author: Kailee Zhou

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