Bureau of Prisons Suspends Nicotine-Pouch Deal After CBS Investigation

The Federal Bureau of Prisons has suspended purchases and sales of flavored nicotine pouches after questions were raised about the products' FDA authorization and the process used to select a sole supplier for federal prison commissaries.

Nicotine pouches supplied to federal prisons are at the center of scrutiny after the Bureau of Prisons suspended purchases pending review. [Photo: Bureau of Prisons]

A Florida company established in May, SHFT Holdings Enterprise LLC, had become the sole approved vendor for flavored nicotine pouches at the Bureau of Prisons' 118 institutions, according to documents reviewed by CBS News.

The product, called "mindSHFT," contains 6 milligrams of nicotine per pouch.

The Food and Drug Administration has not authorized mindSHFT for marketing and sale in the United States, according to CBS News' review of FDA data.

An FDA spokesperson told CBS that the agency had not issued an authorization for the product.

After CBS News began investigating the arrangement and a federal employee submitted a whistleblower complaint to the Justice Department inspector general and Attorney General Todd Blanche, a senior prison official ordered the Bureau of Prisons to stop purchasing the products pending further review.

The Bureau of Prisons confirmed that it had suspended additional purchases and sales while consulting with the FDA. The agency said it had introduced nicotine pouches as an effort to reduce the trafficking of contraband tobacco and nicotine products inside federal prisons.

The procurement process has also come under scrutiny.

CBS reported that the Bureau of Prisons did not issue a formal request for proposals for the nicotine-pouch supplier.

Instead, the bureau had issued a May 15 request for information seeking potential vendors capable of supplying FDA-authorized nicotine-pouch products.

According to CBS, SHFT Holdings was incorporated in Florida shortly after that request for information was published. The company subsequently became the sole approved vendor under an internal Bureau of Prisons arrangement.

The company has disputed any suggestion that it falsely represented its products as FDA-authorized.

Its representative, Kevin Mastaler, told CBS that the company had submitted applications for its products to the FDA and that those applications had been accepted for review.

FDA authorization and a pending application are not the same thing. As of the CBS report, the FDA had authorized only two companies to market nicotine-pouch products in the United States.

The Bureau of Prisons said no illnesses or adverse effects had been reported among inmates who may have used the products, while a legal review of existing inventory was continuing.