News-Week, August 27 - September 04, 2026

US Courts Diverge, EU Grinds to a Halt: Nicotine Policy Slips Into Open Confrontation

Headline Points

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• New York State enacted a 75% wholesale tax on tobacco-free nicotine pouches taking effect September 1, 2026. Distributors must also settle a retroactive floor tax on stock already on hand by September 21.

• Australia’s federal Opposition put forward a plan to slash the national tobacco excise by 80% and bring regulated adult sales of e-cigarettes and nicotine pouches out from behind pharmacy-only restrictions. The stated aim is to erode the margins of an illicit trade that, by the Coalition’s reckoning, now accounts for as much as 80% of all tobacco consumed in the country.

• The FDA cleared three additional Juul2 e-cigarette products on September 1, 2026, raising the US tally of FDA-authorized e-cigarettes to 48. That follows the original Juul2 device clearance on August 28, 2026.

• US federal appellate courts have come down on opposite sides of how the FDA reviews flavored vapes. The Ninth Circuit, in MH Global v. FDA, preserved the agency’s “comparative efficacy” benchmark for flavored e-liquids. The Fifth Circuit, in NicQuid v. FDA, held that very same benchmark unlawful for bypassing notice-and-comment rulemaking. The resulting conflict will almost certainly be pushed further up the appellate ladder.

• Altria has sued the FDA, contending that the agency has repeatedly blown past its own 180-day statutory window for product application reviews — among them the company’s own “on!” nicotine pouches.

• The EU’s Tobacco Taxation Directive is still stuck. A “progressive” camp (France, Germany, Belgium, the Netherlands) is pushing steep minimum excise duties across every nicotine category, while a “cautious,” harm-reduction-leaning camp (Sweden, Portugal, Romania, Greece) resists flat-rate taxation of lower-risk products.

• US retail figures from Circana (52-week window ending July 12, 2026) underline where the growth is: spitless nicotine pouches climbed 25.9% to $7.41 billion, whereas e-vapor sales through convenience stores slipped 5.7% to $6.22 billion — the drop largely reflecting buyers drifting toward untracked, unauthorized disposable channels.

• A fresh Gallup poll, picked up by Forbes on August 29, 2026, puts past-week cigarette smoking among US adults at 11% (a record low), vaping at 9%, and nicotine pouch use at 4%. This is the first time Gallup has measured pouch consumption.

• Malaysia’s government is deciding what to do next after pulling its appeal of a court ruling that voided the 2023 delisting of liquid nicotine from the Poisons Act, which reopens questions about the legal standing of vapes in the country.

1. US Regulatory Developments (FDA)

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The FDA kept green-lighting next-generation nicotine products this week, even as a circuit split over its flavor-review standard deepened.

Juul2 system picks up three more authorizations

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On September 1, 2026, the FDA authorized three more items within the Juul2 e-cigarette line: the device itself plus 18 mg/mL tobacco- and menthol-flavored pods (around 1.5–1.6% nicotine by volume). This builds on the Juul2 device clearance on August 28, 2026, for a next-generation unit that pairs with an optional app-based age-verification and location-lock feature marketed to adults 21 and older. FDA-cited company data indicated that 19.9–34.6% of tobacco-pod users and 28.4–49.3% of menthol-pod users had quit smoking entirely at the six-week mark, and the agency concluded that population-level gains outweighed youth-appeal concerns for the menthol variant. The running total of FDA-authorized e-cigarettes now stands at 48.

Circuits disagree on the “comparative efficacy” benchmark for flavored vapes

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Two federal appeals courts handed down opposing verdicts within days of one another on the question of whether the FDA can compel flavored e-liquid applicants to demonstrate that their products help smokers quit more effectively than tobacco-flavored alternatives do — the so-called “comparative efficacy” test:

For flavored-vape manufacturers whose applications were rejected under the same benchmark, the split hands them fresh ammunition — particularly inside that circuit — and forces the FDA toward either formalizing the standard through rulemaking or overhauling its review methodology. Legal commentary on the divergence was still being published in early September 2026.

Altria takes the FDA to court over review delays

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Altria filed suit against the FDA in federal court, alleging that the agency has routinely blown past the 180-day statutory window for resolving premarket tobacco product applications (PMTAs) — leaving products such as Altria’s own “on!” nicotine pouches in limbo for years. Altria argues that compliant manufacturers are penalized while unauthorized competitors continue to capture market share. The FDA has said it will look at the challenge.

2. State and Federal Taxation

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New York became the latest state to set taxes on nicotine pouches at or above traditional-tobacco levels, with Nevada and others weighing similar moves.

Starting September 1, 2026, New York imposed a 75% wholesale tax on tobacco-free alternative nicotine products, sweeping in pouch brands like ZYN and VELO. The levy is collected before products reach store shelves, leaves e-vapor items out (taxed separately), and excludes FDA-approved cessation aids. Businesses must also pay a retroactive floor tax on inventory already in state by September 21. The stated goal is to close the price gap between newer nicotine formats and cigarettes — a move that will, in practice, push retail prices higher for pouch consumers in New York.

3. Market Data: Pouches Climb, E-Cigarette Eases

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Circana’s convenience-store data for the 52 weeks ending July 12, 2026 underline how sharply the pouch and vapor categories are diverging in the US.

The figures point to a continued drift of consumers away from tracked convenience-store vapor sales and toward untracked specialty and online channels — most of it unauthorized disposable product — even as legal, PMTA-authorized nicotine pouches keep expanding.

New study reports that the majority of e-cigarette sales in convenience and grocery channels were estimated to be unauthorized

A study published in NEJM Evidence reportes that as of December 2025, 69.4% of e-cigarette product sales in convenience and grocery channels were estimated to be unauthorized. While the vast majority of tobacco-flavored e-cigarette sales were FDA authorized, only a small minority of menthol-flavored sales and practically non of other non-tobacco flavors involved authorized products. These are the results of prohibitionand over-restrictive regulation, failing to cope with the demand.

4. Consumption Trends: Gallup’s First Pouch Measurement

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A new Gallup survey, picked up widely on August 29, 2026, sets the first national US benchmark for nicotine pouch use alongside cigarettes and vaping.

Gallup’s 2026 Consumption Habits poll (fieldwork July 1–19, 2026) found: - 11% of US adults smoked cigarettes in the past week — matching Gallup’s all-time record low. - 9% vaped — within the 6–9% range Gallup has logged since it began tracking in 2019. - 4% used nicotine pouches in the past week — the first time Gallup has asked the question. - Cigarette smoking skews toward adults aged 30–49 (16%); vaping and pouch use both lean younger, peaking among 18–29-year-olds (17% vaping, 5% pouches) and 30–49-year-olds (7% pouches). - Nicotine pouch use shows the widest gender gap of the three categories, with men reporting roughly seven times the usage rate of the oldest age cohort.

Since this is Gallup’s baseline reading for pouches, the numbers should be treated as a starting line for future tracking rather than evidence of any shift already underway — the survey cannot say whether current pouch users are former smokers, former vapers, or first-time nicotine users.

5. Policy Debates Outside the US

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Australia: a coalition plan to cut excise and legalize regulated vape/pouch sales

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Australia’s federal Opposition Coalition has proposed an 80% cut to the national tobacco excise, with the goal of bringing retail cigarette prices down to roughly A$9–A$10 per pack — a level aimed specifically at eroding the profit margins of the country’s illicit tobacco trade, which the Coalition says now controls up to 80% of total consumption. The plan would also dismantle the current pharmacy-only model for nicotine vaping products, legalizing and taxing adult retail sales of e-cigarettes and nicotine pouches, alongside A$200 million in federal funding to combat organized crime tied to illicit tobacco. The Coalition estimates the combined shift could deliver A$8 billion in tax receipts over four years by pulling illegal sales back into taxed channels.

European Union: tax reform deadlocked between “progressive” and “cautious” blocs

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The European Commission’s proposed overhaul of the EU Tobacco Taxation Directive is still stuck over disagreements on how to tax newer nicotine products. Because EU tax decisions require unanimity across all 27 member states, the two camps are blocking each other:

• “Progressive” bloc — France, Germany, Belgium, the Netherlands — wants steep minimum excise duties on all nicotine products, plain packaging, and even a filter ban, framed as protecting youth from novel-product uptake.
• “Cautious”/harm-reduction bloc — Sweden, Portugal, Romania, and Greece — argues for lower taxes on non-combustible alternatives specifically to nudge adult smokers away from cigarettes.

Greece’s stance reflects its historically high smoking prevalence (around 39% of adults) alongside an established domestic heated-tobacco and vaping market; Athens has aligned with Sweden’s harm-reduction framing, calling for regulation that distinguishes combustible tobacco from lower-risk alternatives rather than taxing them at parity. Until the two camps reconcile, the Commission’s broader tobacco-tax and product reforms stay in legislative limbo.

Malaysia: what comes next after the government drops its vape-nicotine appeal

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Following Malaysia’s Health Ministry decision (confirmed August 18, 2026) to withdraw its appeal of a Kuala Lumpur High Court ruling that voided the 2023 removal of liquid and gel nicotine from the Poisons Act 1952 schedule, the government now has to settle on a regulatory path for vape liquids. Health Minister Dzulkefly Ahmad has said the withdrawal is not the end of vape regulation, but has not yet laid out a replacement framework. Commentary published in early September sketched the main paths available — including re-attempting a Poisons Board exemption or regulating nicotine vapes solely under the newer Control of Smoking Products for Public Health Act 2024. Whatever path is chosen will determine the legal status — and tax treatment — of vape liquids sold in Malaysia.

FAQ

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Did the FDA clear any new e-cigarettes this week? Yes. On September 1, 2026, the FDA authorized three additional Juul2 products (device plus 18 mg/mL tobacco- and menthol-flavored pods), building on the original Juul2 device clearance on August 28, 2026. That brings the running total of FDA-authorized e-cigarettes to 48.

Why did two US courts come down differently on the FDA’s flavored-vape reviews? The Ninth Circuit (MH Global v. FDA) found that the FDA can require flavored e-liquids to prove they outperform tobacco-flavored products without going through formal rulemaking, since the agency applied the standard through individual case reviews. The Fifth Circuit (NicQuid v. FDA), ruling one day earlier, found that the FDA had effectively created a binding rule and was therefore obliged to use notice-and-comment rulemaking first. The circuit split lifts the odds of further appeal or Supreme Court involvement.

Are nicotine pouches now taxed like cigarettes in New York? Yes, as of September 1, 2026. New York applies a 75% wholesale tax to tobacco-free nicotine pouches such as ZYN and VELO, plus a retroactive floor tax on stock already on shelves (due September 21). That narrows the price gap between pouches and cigarettes in the state, though the tax leaves e-vapor products and FDA-approved cessation aids untouched.

Is nicotine pouch use growing faster than vaping in the US? Yes, per Circana retail data for the year ending July 12, 2026. US convenience-store pouch sales climbed 25.9% year-over-year to $7.41 billion, while tracked e-vapor sales slipped 5.7% to $6.22 billion — much of the vapor drop attributed to consumers moving toward unauthorized disposable products sold outside convenience-store channels.

What did Gallup find about US adult nicotine use? Gallup’s 2026 survey put past-week cigarette smoking at 11% of US adults (a record low), vaping at 9%, and nicotine pouch use at 4% — the first time Gallup has measured pouch use. Cigarette use peaks among 30–49-year-olds, while both vaping and pouch use skew younger, peaking among 18–29-year-olds.

Where does Greece stand on the EU’s tobacco-tax debate? Greece is aligned with Sweden, Portugal, and Romania in resisting the “progressive” camp’s push (led by France, Germany, Belgium, and the Netherlands) for high, uniform excise duties across all nicotine products. Athens favors tax and regulatory treatment that distinguishes lower-risk alternatives — such as heated tobacco and vapes — from combustible cigarettes, consistent with its existing national framework.

What’s happening with vape regulation in Malaysia right now? Malaysia’s government withdrew its Court of Appeal challenge (confirmed August 18, 2026) against a ruling that voided the 2023 delisting of liquid nicotine from the Poisons Act. The Health Ministry says vape regulation will continue under some legal framework, but as of early September 2026 it had not announced which one — leaving the legal and tax status of vape liquids unresolved in the near term.

Sources

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1. CBS News — Juul can sell updated e-cigarette with age-verification system, FDA says (Aug 28, 2026)
2. Tobacco Reporter — FDA Authorizes Three Juul2 Products (Sep 1, 2026)
3. FDA — Tobacco Products Marketing Orders (marketing-order log, incl. Aug 28, 2026 entry)
4. Tobacco Insider — Tobacco Industry Highlights: August 29 – September 4, 2026 (Sep 4, 2026) — source for the NY pouch tax, Altria/FDA suit, Australia excise proposal, EU tax deadlock, and Circana vapor/pouch sales data
5. Tobacco Insider — Tobacco Regulation: European Union (Sep 4, 2026)
6. Tobacco Insider — Tobacco Lawsuits: USA (Sep 2, 2026) — Ninth Circuit/MH Global coverage
7. Nicotine Insider — Fifth, Ninth Circuits Split on U.S. FDA Vape Rule
8. Zumovape — Ninth Circuit Upholds FDA Flavored ENDS PMTA Ruling
9. Zumovape — NicQuid FDA Ruling: Fifth Circuit Challenges PMTA Standard (Aug 28, 2026)
10. Mealey’s — 9th Circuit Upholds FDA Ban Of E-Liquid Maker’s Flavored Products (Aug 26, 2026)
11. Forbes — Cannabis Overtakes Cigarette Smoking In Gallup’s Latest U.S. Habits Poll (Aug 29, 2026)
12. Gallup — U.S. Marijuana Smoking at Record High, Cigarettes at Low (Aug 24, 2026; underlying data cited by the Aug 29 Forbes piece above)
13. CodeBlue (Galen Centre) — Explainer: Three Options For Putrajaya After Withdrawing Nicotine Appeal (Sep 2026)
14. Free Malaysia Today — Ministry to explain withdrawal of appeal against nicotine vape exemption (Aug 26, 2026)

This report covers verified developments dated between August 27 and September 4, 2026.