The U.S. Supreme Court heard a challenge against the Food and Drug Administration (FDA) Monday about past bans on flavored liquids for e-cigarettes and vapes.
What Happened: Triton Distribution brought a case to the U.S. Supreme Court, challenging the law that allows the FDA to control the regulation of e-liquids and e-cigarettes.
The FDA previously denied Triton’s applications to sell flavored e-cigarettes. The concern is that they could appeal to children and teenagers, as reported by Politico.
Cigarette flavors, except menthol, have been banned by the FDA since 2009.
A final ruling will not be made by the Supreme Court for months. Justices, though, don’t appear to sympathize with Triton's argument.
"Everybody basically knows that flavors are particularly dangerous in terms of kids starting the use of smoking products," Justice Elena Kagan said.
Triton has the potential to reapply with the FDA. A company attorney said the incoming Donald Trump administration could make things easier, given his past comments on wanting to save vaping.
Some judges believed the FDA was not consistent on its approval process.
"Their argument is that the guidance were actually a moving target, that either they weren't clear, or you changed the guidance as time went on," Justice Clarence Thomas said.
Read Also: Trump Vows To ‘Save Vaping Again’ Despite Past Partial Ban. Here’s How He Plans To Do It
Why It's Important: Under the existing 2009 law, the FDA only approves new tobacco products if they believe they will protect public health. This makes it harder to get new products approved, as the system favors those fighting to get current users of products to stop smoking or prevent new users from starting.
Past appeals courts have approved the FDA's decisions, as reported by NPR. The conservative Fifth Circuit Court of Appeals rejected the FDA's decision capabilities. It also threatened to allow all vaping products to hit the market, prompting the challenge with the Supreme Court.
With a final ruling likely in June, cigarette and vaping companies could be on the radar of investors.
Cigarette manufacturer Altria Group (NYSE:MO) owns the NJOY menthol e-cigarette product that has flavored vapes approved by the FDA. Altria was previously an investor in Juul, a leader in the e-cigarette sector. It eventually exchanged its stake for some intellectual property.
Maintaining the FDA's current rules would keep Altria as one of the only companies that can sell approved flavored e-cigarettes. A different decision could see Altria quickly face increased competition.
British American Tobacco (NYSE:BTI) has watched previous attempts to have some vaping products approved denied by the FDA.
Turning Point Brands (NYSE:TPI), a past challenger to the FDA's approval process, could benefit if the Supreme Court puts new rules in place.
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