Tobacco Regulations in China Updated, E-Cigarette Industry Affected

The government of China has announced that there would be updates on their tobacco regulations following the rise of the e-cigarette industry in the country and the e-cigarette makers aren’t happy about it. In fact, on the day the news was announced, RXL Technologies’ stock dropped by 40%.

Just last year, the government introduced 2 policy initiatives. The first one is about banning the sales of e-cigarettes online and the prohibition of its online marketing. The second one was about the investigation of e-cigarette safety.

Further details of the plan have not yet been announced. Despite that, investors have already started panicking. RLX’s co-founder Kate Wang even shared a drop in her fortune amounting to $3 billion. Other e-cigarette companies have also suffered losses like Smoore International, Vaporesso’s parent brand who saw a drop of 27% on their stock.

The only sure thing is that e-cigarettes will not be considered tobacco products as compared to before, where they belonged to the electronic product category. Companies would also need to perform negotiations with the state just so they would have access to the market. In other words, they would need to apply for a special license and pay taxes to sell and distribute their products.

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