$KAVL Kaival Brands Expands Distribution for Bidi

$KAVL Kaival Brands Expands Distribution for Bidi Vapor

https://www.prnewswire.com/news-releases/kaiv...26896.html

GRANT, Fla., April 18, 2022 /PRNewswire/ -- Kaival Brands Innovations Group, Inc. (NASDAQ: KAVL) ("Kaival Brands," the "Company," or "we" , the exclusive global distributor of all products manufactured by Bidi Vapor, LLC ("Bidi Vapor" , which are intended for adults 21 and over, today announced the expansion of additional wholesaler and retailer accounts, which, together, are expected to reach approximately 28,000 additional stores.

Niraj Patel, Chief Executive Officer of Kaival Brands said, "We are encouraged by growing sales volumes in our second fiscal quarter generated by both established wholesalers and retailers selling the BIDI® Stick in new stores, as well as new wholesale and retail accounts being added to our distribution network. We anticipate the activation of approximately 3,900 new store locations over the next 45 days, including one new major retailer having already placed orders totaling more than $1.1 million."

This expansion represents a positive development for the Company since the U.S. Food and Drug Administration ("FDA" issued its marketing denial order ("MDO" to Bidi Vapor this past September, as it did for about 96% of all manufacturers of flavored ENDS. In February 2022, the U.S. Court of Appeals for the Eleventh Circuit granted Bidi Vapor a judicial stay of the MDO, pending the resolution of Bidi Vapor's ongoing merits-based litigation. In effect, the judicial stay means that the MDO, which covered the non-tobacco flavored BIDI® Sticks, is not legally in force. Accordingly, Kaival Brands anticipates marketing and selling all 11 flavored BIDI® Sticks, subject to the FDA's enforcement discretion, while Bidi Vapor continues with its merits case challenging the legality of the MDO. The FDA has indicated that it is prioritizing enforcement against companies that have either not submitted Premarket Tobacco Product Applications ("PMTAs" , or whose PMTAs have been refused acceptance or filing by FDA, or whose PMTAs remain subject to MDOs.

After the court granted Bidi Vapor the judicial stay of the MDO in February 2022, the Company is seeing indications of growing confidence in the vaping industry, with Bidi Vapor's flavored electronic nicotine delivery systems (ENDS) now declared legal to sell while pending resolution of the ongoing litigation.

"This was a significant event not only for Kaival Brands and Bidi Vapor, but the entire industry," said Patel of the court decision. "The judicial stay granted in February allowed us to resume sale of all 11 flavored products in the BIDI® Stick lineup. We are eager to return our flavored products to the shelves of retailers that comply with the Prevent All Cigarette Trafficking Act so adult consumers can enjoy their preferred flavors once again. As a result of the judicial stay, we expect revenues to resume an upward trajectory as renewed distribution ramps up and sales of flavored BIDI® Sticks increase."

Additionally, we believe that the FDA's new authority over products using synthetic nicotine will only bolster Kaival Brands' market position, as more retailers understand the nearly insurmountable compliance hurdles facing those manufacturers of non-compliant, synthetic products. The Company applauds the recent bi-partisan effort by Congress to give the FDA authority over synthetic nicotine. The Company, along with Bidi Vapor, prioritizes regulatory compliance to ensure high standards for product quality.

"Products in the vaping industry should be developed and placed in the market under a high degree of supervision, such as the FDA's PMTA process or the FDA's drug-approval process," continued Patel. "We anticipate that as the FDA begins enforcement against illegally marketed and synthetic-nicotine vaping products, there may be an increased demand for compliant and legal vaping products, such as the BIDI® Stick.

Adult smokers aged 21 and older who are looking for an alternative to combustible cigarettes have been our priority from the beginning," Patel said. "It hasn't been an easy road, but we fight to create a level playing field for our products and pave a realistic path for adult smokers to change their habits. This is and always has been our commitment."