Tobacco major Philip Morris International Inc. ( PM ) is trading lower in premarket today.

Swedish Match North America LLC (SMNA), an affiliate of Philip Morris ( PM ), received a subpoena from the Attorney General of the District of Columbia, requesting details on SMNA’s adherence to D.C.'s ban on the sale of flavored products, particularly focusing on ZYN nicotine pouches.

Early investigations revealed that flavored nicotine pouches have been sold in D.C., mainly through online platforms and some independent retailers.

In response, Philip Morris ( PM ) has directed SMNA to conduct a thorough review of its sales and distribution channels in D.C. and other areas affected by flavor restrictions.

As a preliminary action, SMNA has suspended online sales on ZYN.com while continuing its investigation.

The company has emphasized that all sales through ZYN.com are age-restricted, ensuring that only adults aged 21 and over can access the products.

Also Read: Philip Morris International Raises 2024 Earnings Outlook, Expects Growth Despite Currency Impact

Should the inquiry conclude unfavorably, SMNA could face substantial financial liabilities, though the exact amount is currently indeterminate.

Zyn products, which resemble tea bags, are designed to deliver nicotine by being placed between the gum and upper lip. Notably, these pouches do not contain tobacco, setting them apart from traditional tobacco products, reported Bloomberg.

The response to this regulatory action in D.C. might prompt similar measures in other states and localities. Currently, approximately 400 localities and five states have imposed bans or restrictions on flavored tobacco and nicotine products.

The report further mentioned that the product has also attracted criticism from influential figures such as U.S. Senate Majority Leader Chuck Schumer, who has accused the company of targeting young consumers with these flavored nicotine products.

Philip Morris ( PM ) stock has gained more than 7% in the last 12 months. Investors can gain exposure to the stock via Consumer Staples Select Sector SPDR Fund ( XLP ) and Vanguard Consumer Staples ETF .

Price Action: PM shares are trading lower by 2.89% at $99.10 in premarket at last check Tuesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Read Next: Philip Morris’ Ambitious Plans for Heated Tobacco Gains Traction Among Analysts and Investors