Charlie's Holdings Aligned with FDA Guidance in Vape Market

Recent FDA Guidance on Vape Regulation Supports Charlie's Holdings Business Model

COSTA MESA, CA / ACCESSWIRE / January 16, 2020 / Charlie's Holdings, Inc. (OTC PINK:CHUC) ("Charlie's" or the "Company), an industry leader in both the premium, nicotine-only, e-liquid space and the hemp-derived, CBD wellness space, is pleased with recent guidance from Food and Drug Administration (FDA) banning e-cigarette pod flavors other than Tobacco and Menthol, and clarified regulation around the legal sales of sweet and fruity flavored e-liquids. (https://www.wsj.com/articles/fda-to-ban-all-e-cigarette-pod-flavors-except-tobacco-and-menthol-11577833093)

The latest vape regulatory guidance from FDA serves to bolster Charlie's business model, which focuses on providing high-quality, nicotine-only e-liquid for use in open-system vaping devices through its subsidiary company, Charlie's Chalk Dust (CCD). A recent survey completed by one of Charlie's Chalk Dust's largest chain of vape stores confirmed that consumers of Charlie's products are adult users, with an average age of 33, a consumer demographic focused on choice that is unaffected by recent age-related restrictions.

Brandon Stump, Charlie's Holdings Chief Executive Officer, commented, "We have remained confident that any change in vape regulation would not affect the open-system vape market. Recent guidance from FDA has confirmed that regulatory changes target flavored e-cigarette pods, not open-system vaping devices. Charlie's continues to be a leader in compliant e-liquids for refillable open-system vaporizers. We believe the latest FDA guidance is extremely favorable for Charlie's Holdings and anticipate a positive impact on our business."

The following are highlights from the recent article:

FDA to Ban All E-Cigarette Pod Flavors Except Tobacco and Menthol

• Ban the sale of fruity flavors in cartridge-based e-cigarettes, but the restriction won't apply to open-system vaporizers commonly found at vape shops, according to people familiar with the matter.
• Open-system vaping devices aren't popular among children or teenagers, who tend to use vaporizers with prefilled cartridges.
• Open-system vaporizers are typically found in vape shops.
• Intended to curb a surge in underage vaping, would apply only to pod-based vaporizers such as those made by large closed-system manufacturers.
• Pull from the market all e-cigarette refillable pods except those formulated to taste like tobacco or menthol.
• The sweet and fruity flavors that would be banned under the new policy represented about 80 percent of retail store e-cigarette sales in 2019, according to analyst estimates.
• E-cigarette makers can apply to FDA for permission to bring flavored products back on the market. To do so, they must demonstrate that the products provide a net benefit to public health.
• By May, manufacturers must submit for FDA to review any vaping products they want to remain on the market beyond that point, even those that taste like menthol and tobacco.

About Charlie's Holdings, Inc.

Charlie's Holdings, Inc. (OTC Pink: CHUC) is an industry leader in both the premium, nicotine-only, e-liquid space and the hemp-derived, CBD wellness space through its subsidiary companies Charlie's Chalk Dust, LLC and Don Polly, LLC. Charlie's Chalk Dust produces high quality vapor products currently distributed in more than 90 countries around the world. Charlie's Chalk Dust has developed an extensive portfolio of brand styles, flavor profiles and innovative product formats. Launched in June of 2019, Don Polly, LLC formulates innovative hemp-derived CBD wellness products. Don Polly's high-quality CBD products derive from single-strain-sourced hemp extract and high purity CBD isolate crystals.

For additional information, please visit our corporate website at: CharliesHoldings.com and our branded online websites: CharliesChalkDust and EnjoyPachamama.

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This press release contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to statements regarding the Company's overall business, existing and anticipated markets and expectations regarding future sales and expenses. Words such as "expect," "anticipate," "should," "believe," "target," "project," "goals," "estimate," "potential," "predict," "may," "will," "could," "intend," variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond the Company's control. The Company's actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to: the Company's ability to successful increase sales and enter new markets; the Company's ability to manufacture and produce product for its customers; the Company's ability to formulate new products; the acceptance of existing and future products; the complexity, expense and time associated with compliance with government rules and regulations affecting nicotine and products containing cannabidiol; litigation risks from the use of the Company's products; risks of government regulations; the impact of competitive products; and the Company's ability to maintain and enhance its brand, as well as other risk factors included in the Company's most recent quarterly report on Form 10-Q and other SEC filings. These forward-looking statements are made as of the date of this press release and were based on current expectations, estimates, forecasts and projections as well as the beliefs and assumptions of management. Except as required by law, the Company undertakes no duty or obligation to update any forward-looking statements contained in this release as a result of new information, future events or changes in its expectations.

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SOURCE: Charlie's Holdings, Inc.