The Future of the Vape Industry is in Jeopardy
New FDA Regulations Threaten to Push Out Small Business Owners With Millions of Dollars in Fees to Continue Operating
In a delicate balancing act between providing a healthier smoking alternative and keeping nicotine away from minors, the vaping industry has felt the squeeze of regulations in the past few years, but the threat is far greater and more real now.
Due to the alarming data of tobacco-related deaths and diseases, the FDA, has taken into its hands the move to regulate all tobacco products, including electronic cigarettes. What seems to be ironic though is that the only similarity between e-cigs (or vapes) and analog cigarettes is that they deliver nicotine as e-cigarettes, and eLiquids for that matter, do not have any tobacco in them. Vapes do not produce combustion and release toxic chemicals into the air as traditional tobacco products do.
In general, tobacco is considered as a huge threat to public health, as it should be. It has been emphasized time and again that smoking tobacco is the cause for half a million deaths in the United States every year and results to diseases which are otherwise 100% preventable.
Another important contention why the FDA moves to regulate vapes as tobacco products is because of the drastic rise of vaping among the youth. According to a study conducted by the CDC, the use of e-cigarettes among the youth has risen by 900% from 2011 to 2015.
On the other hand, vaping enthusiasts, mostly people who are former smoking addicts, believe that the new regulations will choke out the opportunities for accessible, healthy, and effective smoking alternative. If the vaping industry goes out of business and the traditional cigarette manufacturers take up monopoly again, people who are looking to quit smoking will be in vulnerable position of picking up the habit up once again.
Both parties are looking to ensure and protect public health, both of the youth and of the nicotine addicts, but the new regulations are tipping that balance and the very existence of the industry is now at stake.
BIG TOBACCO CHOKING OUT THE LITTLE MAN
Admittedly, the vaping industry has enjoyed a more lenient regulatory treatment during its early days. Because the government was first unsure about how to treat vaping, it had been easy to sell, market, and even perform the act in vaping without strict regulations strangling the small vaping businesses. But today, it seems like that the FDA, along with Big Tobacco and pharmaceutical companies, are choking the last vestiges of the industry.
There are numerous and different levels of acceptance and criticisms of vaping in the United States. Earlier this year, a court in New York has accepted the fact that vaping is not equivalent to smoking, thus vapers are not violating the anti-smoking act. While vaping is still not allowed in public places, the state sees the importance of distinguishing vaping from smoking in implementing regulations and charging violations.
For one, vaping is performed by powering an electronic device to burn e-liquid which, when inhaled, turns into vapor. It doesn’t involve any harmful toxins that cigarettes produce. Vaping lobbyists also point out that vaping is much healthier than smoking; it is less obtrusive to other people, and it doesn’t endanger the health of non-vapers as tobacco products do with second hand smoke.
Many lobbyists and even legislators were hopeful that such distinction will help breed fairer reviews and judgments on vaping, but the new FDA rules are saying otherwise. Apparently, new regulations in Washington states that vape businesses need to comply with the licensing system when it comes to the selling and distribution of vape products, including nicotine. However, their rules allow sampling of products inside vape stores.
New FDA Regulations
Washington’s new regulations are admittedly very comprehensive and seek out balance between making vaping accessible to adult smokers keeping it away from minors. According to Senator Bruce Dammeier, sponsor of the said bill, “Everything we did was really designed around youth prevention.”
These laws are understood and welcomed by many vape business owners. They even think that these rules a good way to keep their business with adult vapers who are looking to kick to their smoking habit, and at the same time, keeping the youth out of vape shops. But it turns out everything is not all roses for everyone concerned.
The new regulations would cost millions of dollars to comply with the licensing system, a price that many small-time vape businesses can’t afford. “Today’s final rule pulls the rug out from the nine million smokers who have switched to vaping, putting them in jeopardy of returning to smoking,” commented by the The Smoke-Free Alternatives Trade Association. Now it’s beginning to look like that while the new regulations are designed towards nicotine addiction prevention, they’re also at the expense of vape business owners and people looking to quit smoking.
In fact, Nicopure Labs has filed a lawsuit against the FDA, arguing that the agency violated Administrative Procedure Act and that the agency’s final regulations also violated the First Amendment. According to the company’s lawyer, “the government’s role is not to regulate for the sake of regulation. Regulation must be based on sound science and robust procedure, and it must accomplish certain public health goals.”
It has become clear to many experts and vapers that the silent collaboration between the FDA, Big Tobacco, and pharmaceutical companies is putting the future of vaping at risk. According to a paper written by Jonathon Adler entitled, “Baptists, Bootleggers & Electronic Cigarettes” for the Washington Post, the obvious connivance between the agency and these big companies aim to tear down vaping in order to minimize competition and give them back the monopoly for nicotine delivery and smoking cessation products.
What Does the FDA Want?
The FDA wants to regulate vaping products and devices in similar ways that they do with tobacco products.
In order to achieve that level of regulation, vaping manufacturers must comply with the licensing system that the FDA has put in place for them. This is believed to set the standards and quality for vaping devices and products as well as help uphold the safety of the public.
In doing this, a grandfathering date has been set. All vaping products and devices that has entered the market after February 15, 2007 will have to be submitted for FDA’s approval. Otherwise, manufacturers run the risk of closing shop and losing their business. And this is a very likely picture because vaping has only began to become popular early in 2008. This rule will therefore spare no vaping business, especially start-ups and mom and pop shops.
And all of these will take place despite the fact that vaping products do not contain similar ingredients to tobacco cigarettes and they hardly ever qualify as tobacco products. This is a very cunning move to gain the government’s approval of the FDA’s proposal.
After the proposal is passed, what now? Vapers and business owners alike are wondering.
Just consider small businesses closing down in the next few months or years because they can’t afford the licensing requirements for each and every product on their shelves. Unlike in the tobacco industry where numerous and established companies abound, the billion dollar vaping industry is actually composed mostly of smaller shops and stores. At the local levels, these stores are already facing regulations on not selling to minors, prohibition of sampling where minors congregate and requirements on packaging and labeling. After the new regulations, it will seem like only the big tobacco companies are left to flourish and people who enjoy vaping may either turn to black market or make a comeback to their deadly smoking habits.
Previous Industry Regulations
This is not the first time that the FDA has tried to take control over the vaping industry. In the previous years, the agency has also attempted to enforce certain regulations that have hurt the market, but these laws did not stop vaping from becoming a billion dollar industry that it is today.
Family Smoking Prevention and Tobacco Control Act
The Family Smoking Prevention and Tobacco Control Act was passed in 2009 and gave the FDA power to place the vaping industry under its control. The main goal of the act was to help prevent Americans from engaging into the dangerous habit of smoking. Under that same premise, the FDA considered vapes to be similar to traditional cigarettes in that they both deliver nicotine to their users. The FDA proposed to deem e-cigarettes as tobacco products under the “deeming process” which ultimately categorizes vapes in the same manner as cigars and cigarettes.
2014 FDA Regulations
The years went by full of speculations of where these regulations will lead to. In 2014, the FDA finally announced that vaping is regulated with the following rules:
- No selling to minors
- No free sampling
- Required warning labels
Vaping Legal Issues
Since vaping devices and e-cigarettes are now being formally considered as tobacco products under the FDA’s new rules, here comes a web of messy legal battle. From banning sales to minors to the issue on the grandfathering date, the next several years don’t look so good for the vaping industry, unless new and favorable regulations come to life.
Regulating E-cigs as Tobacco Products
The FDA has finalized the rules and regulations concerning e-cigarettes this year. In 2018, all tobacco products, which now include vaping devices must bear a warning on their label, stating: “WARNING: This product contains nicotine. Nicotine is an addictive chemical.”
However, if the product does not have nicotine and can support this with data, FDA requires that the product bear this statement in its label: “This product is made from tobacco.”
Minimum Age Purchase
In order to regulate the sales of vaping products against minors, 48 states are already implementing a minimum age purchase. Pennsylvania and Michigan are the only two states that still don't have this rule in place. Vaping products are also not allowed to be displayed and sold in vending machines where people who are 18 years and younger are allowed to enter.
No Free SamplesIn the past, anybody who wish to try a new flavor simply needs to ask for a sample from a vape store. It’s a great opportunity for customers to decide whether they like the flavor or not without spending for a whole bottle. But the new regulations state that vape store owners can no longer provide samples free of charge. According to the Consumer Advocates for Smokefree Alternatives Association (CASAA) coordinator Alex Clark, store owners have the discretion up to how many puffs these paid samples would be.
Grandfathering Date Way too Recent
If there’s one threat that’s all too familiar and consuming for vape business owners, it would be the grandfathering date. The grandfathering date tells us that under the Family Smoking Prevention and Tobacco Control Act, FDA requires all tobacco products to be grandfathered before February 15, 2007. After this date, all tobacco products, including e-cigarettes, will have to be approved by the FDA for them to be sold legally in the market. However, we must also remember that it wasn’t until 2008 when vaping products became popular, so a lot if not all, products related to vaping must comply with the FDA’s requirement.
It’s easy for this grandfathering date to totally destroy the very existence of the vaping industry and in turn, allow Big Tobacco to regain monopoly. However, there’s one time-consuming yet financially-expensive option to remain in the market: Pre-Market Tobacco Application or the PMTA.
With PMTA, vaping companies and businesses can still sell and market their products for two years. During this period, the same businesses would have the opportunity to file for PMTA. Each and every product - from e-juices, parts and accessories - will need a PMTA. And each and every product would also cost between $117,00 and $466,000. Therefore, a business owner running his humble store have millions of dollars to pay for in order to keep his business and this is a price that many smaller vape shops simply cannot afford.
Another looming deadline is December 31, 2016 wherein manufacturers must submit a list to the FDA of the products they intend to market in 2017. This does not cost anything, but it’s a requirement they must comply with.
FDA Rules: How It’s Affecting the Industry
Suffice to say, FDA’s new rules are hurting the vaping industry. According to Vapor Technology Association director Tony Abboud, these new regulations are “unreasonable and excessive,” and will only prompt people to go back to smoking analog cigarettes instead of helping them quit. The FDA will abolish the 10-year acceptance of consumers for vaping products as well as kill employment opportunities for the thousands of people working in vaping businesses. On top of that, people who have turned to vaping as a means to satiate their nicotine cravings and gradually quit their smoking habits are once again coming face-to-face with the prospects of taking a cigarette stick.
Obviously, who will benefit the most with these new changes are the big tobacco companies who will monopolize the supply of nicotine and the big pharmaceutical companies that provide smoking cessation products.
Current FDA RegulationsThe FDA has become more meticulous and detail-specific about their new regulations on vaping devices and products.
- The establishment must be registered with the FDA as a manufacturer and submit a list of products to the agency.
- The establishment must report to the FDA if their products contain harmful and hazardous ingredients.
- New products must obtain authorization from the FDA.
- Health warnings must be indicated in advertisements as well as packages of products.
- Prohibition of modified risk tobacco products, unless otherwise permitted by the FDA.
According to Director Mitch Zeller, J.D., of the Center for Tobacco Products in FDA, “this final rule is a foundational step that enables the FDA to regulate products young people were using at alarming rates, like e-cigarettes, cigars and hookah tobacco, that had gone largely unregulated.”
While we can all assume that the FDA is simply acting on the public’s best interests, it’s also important to consider the two angles of the problem.
First, neglecting the fact that vaping is less dangerous than the analog tobacco products, the public are led to misunderstand about the potential of these products in helping them quit smoking. Second, considering how zealous officials and anti-vaping advocates have become, vaping devices may lose their appeal as a safer nicotine delivery and smoke cessation device, therefore driving smokers to continue their use of hazardous tobacco products.
Therefore, these regulations are defeating their purpose of protecting public health by breeding unawareness, misinformation and making these safer products less accessible for public consumption.
August 8, 2016: Industry Freeze and its Effects
August 8, 2016 is dubbed as the date of the beginning of Vapocalypse. From this date, the FDA starts its countdown for the two-year period when FDA will ultimately prohibit the selling of vapor products.
Going back to the timeline of events, FDA has formally recognized e-cigarettes as tobacco products in May 2016. The agency gave the vaping industry 90 days for compliance with the new rules which end on August 8. According to Gregory Conley, president of the Vaping Association, “if we do not succeed in changing the FDA’s arbitrary predicate date of February 15, 2007, the vapor industry will shrink to almost nothing beginning August 8, 2016.”
What this means is that products introduced after August 8 are required to comply with the new regulations of the FDA and that manufacturers are required to apply for every new product that they intend to sell. This also basically means that the vaping market will be frozen starting August 8.
Certainly, these extreme requirements are very tall orders for small business owners. The threat has become a reality and the effects will now slowly creep up in the vaping industry.
The vaping industry is now entering a new phase where regulations are very stringent, they’re almost to the point of choking. Whether you are a manufacturer looking to introduce new vaping products or a consumer who enjoys vaping as a hobby and as an aid for smoking cessation, sad to say, you’re at the losing end.
Understandably, what’s at stake here is the safety of public health, and the main patients are the youth and smokers. The government aims to protect the youth from nicotine addiction by making tobacco products as inaccessible to them as possible. Meanwhile, pro-vaping lobbyists advocate e-cigarette as safe and effective tools to quit smoking.
These new regulations can be one-sided and unreasonable especially since anti-vaping lobbyists are focusing on the minor downsides of vaping and are discounting the benefits of these products. One could only hope that lawmakers will realize how big a threat tobacco is and make way for reasonable regulations in the near future.