The FDA’s New Rules for E-Cigarettes Are Already Hurting Vape Shops
There’s no tobacco in electronic cigarettes. That’s a fact.
But don’t bring facts to the Food and Drug Administration, which on Monday officially began regulating e-cigarettes (and the businesses that make and sell them) under the provisions of the Tobacco Control Act, the 2009 law giving the FDA regulatory power over tobacco products—and apparently things that sort of look and act like tobacco products too.
The consequences are already being felt at places like The Electric Cigarette Lounge in Sacramento, California, which shut its doors for good this week. The store’s owner told local TV station KCRA that the FDA’s rules snuffed out his business.
Andrew Osborne, the owner of Vapor Trail Electronics in Buffalo, New York, told News 4 that he expects the entire e-cigarette industry to collapse under the new federal rules.
“This is going to wipe out the e-cigarette business and leave Big Tobacco running the industry,” Chris Voudris, who owns four retail shops called Vapor Haus in Ohio, told the Dayton Daily News on Monday. “The cost of regulations will be too costly for small companies to compete.”
From: The FDA’s New Rules for E-Cigarettes Are Already Hurting Vape Shops – Hit & Run : Reason.com
It’s not that they’re doing a bad thing.
But they’re doing a thing that looks like a bad thing.Report
but but um but um but
public safety or something
MOVE TO SOMALIA YOU RACIST
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The FDA would absolutely ban cigarettes if they thought they could get away with it. Alcohol as well, and every other form of recreational drug (and most pharmaceuticals, for that matter). And it’s not really surprising, preventing public harm is after all the agency’s mission, and the easiest harm to prevent is that which is voluntarily brought upon oneself. Banning e-cigarettes is the FDA’s version of the FAA’s “no cellphones on the plane”–it’s not backed up by any science, but there’s not actually science showing that it’s okay…Report
Similarly marijuana, or so the DEA claims.Report
Might as well just wrap ourselves in bubble wrap.
Then we’ll be safe.
Plus, it will relieve boredom.Report
Cue lawsuits…..
Christ, there never seems to be a reason NOT to regulate something…
something something something…..will somebody please think of the children…..Report
Funny how EPA is overbearing when the thing some folks like is regulated. When they have a war on coal its gggrrreat!Report
You do know the EPA and FDA are different things, right?Report
Yes, there was supposed to be another sentence in there but it got lost in my multitasking.Report
notme’s mind is racy.Report
I read the Reason article.
Did I miss it, where they explained how the new rules caused that poor man to close his shop?
It seems remarkable that he closed his doors literally on the first day of the rules.
I am actually ambivalent about the vaping rules, and am ready to accept that they could very likely be stupid and unnecessary.
But so far all we are hearing is exactly…and I mean almost word for word…the same arguments that we have heard endlessly about
Every.
Single
Freaking
Regulation for everything everywhere since before I was born.
Seatbelts were going to destroy the automobile industry, did you realize that?
Didn’t we have, right here on this very blog, a long discussion about Poolmageddon, the draconian Obama rules where jackbooted thugs were going to force pools to close all across America?
Whatever happened to that, by the way? (Spoiler alert- The pool rules were adopted and pools still exist).
So I read articles like this with a great deal of skepticism, because my personal prediction is that in a year or two, this entire issue will be quietly flushed down the memory hole, as the vaping industry and consumer adapt and get on with their lives.Report
There are two specific concerns for vape shops. One short-term, and one long term.
The short term concern is that how they can do business is constricted. The competitive advantages of shops were things like free samples (outlawed), mixing flavors (maybe outlawed and maybe not but would you want to risk it?), and so on. Without those, people will just order stuff online.
The long term concern is that if they make their own eliquids, not only can’t they make anything new for the next two years but after two years unless they go through the cumbersome FDA process for each and every product they offer, they’re gone by that point anyway. Most didn’t close the day it took effect. I think a lot are going to wait around and see how the litigation comes out and/or hope that the FDA backs down.
Beyond all that, industry consolidation (in other words, businesses closing) is something that is going to happen with this law. Why do I believe this? Because the head of the FDA said so. They have even suggested that industry consolidation is a benefit because it’s easier to regulate a handful of companies than a lot of companies.
Most of the vaping community is fine with some regulation. What we’re not fine with is the regulation that was passed. I had initially thought that the regulations were quite reasonable, for the most part. It was only later when the extent became clear. The FDA keeps acting like the main thing is preventing sale to minors. Which almost nobody objects to. It goes a lot further than that.Report
So he closed his shop, why?
Would it be fair to assert that it really had nothing to do with the rule?
And the idea that industry consolidation will happen because the FDA decrees it to be so…really? Isn’t it the case that industry consolidation happens to all industries, just as a natural maturing as some more adept competitors dominate the field?
Again, maybe the rules are stupid and harmful.
But this article doesn’t even bother to make the case why or how. It just summons up a phony sob story, and glosses over any real points.
And even your comment is mostly hypothesizing about potential future effects. Which may come true, I don’t know.
But the track record for this sort of argument is pretty bad, don’t you think?Report
I listed two ways in which the FDA regs made him believe his business would no longer be viable. On Monday, he lost some of the biggest competitive advantages vape shops have. In two years, he unless he undergoes a multimillion dollar review process, he is out of business anyway. Maybe he could find another way to do it and make a profit, but I think closing shop is a very reasonable response to the FDA’s actions. I expect to see more of it.
Some consolidation is inevitable. The notion that adding millions of dollars in approval processes for each product will lead to more consolidation than would otherwise occur is not exactly rocket science. The FDA isn’t pretending otherwise. They’re just saying it’s not such a bad thing.
I am hypothetisizing that the FDA’s new regulations will not be overturned. The “two years” isn’t hypothesis. It’s in the regulations. In two years, if you have not undergone an approval process for every product you sell (every flavor, every coil, every battery) you can’t sell it. That means that operations that don’t have the funds to undergo that process, or are not confident they will be able to absorb that impact, will fold.
So what happens in a couple years does not require a Ouija board. I wouldn’t bet my livelihood on it not happening. Regulations have consequences. Sometimes, the consequences are worth the benefits. You’ve repeatedly said that you’re not defending the regulations themselves, but they need defending to justify the ill-effects.
Not just things that might happen, but things that the rule says will happen, and things which stopped happening Monday. (Specifically, in an industry that has seen one innovation after another, there’s not going to be anything new for a while. No safer batteries, no new diacetyl-free flavorings, no new devices with increased efficiency.)Report
Sorry, the idea that a person closes a profitable business on the speculation that something will happen in two years is just not believable.
He hasn’t lost one customer, hasn’t incurred a single penny of cost, yet shutters his (profitable) business.
Baloney.Report
It’s not speculation. We’re not saying that the FDA is going to pass rules in two years. We’re saying the FDA has already passed rules that take effect in two years. “Speculation” that said rules will in fact take effect does not seem like baloney to me. It’s what the FDA has said is going to happen. Only the courts, Congress, and/or Obama’s successor will be able to stop it.Report
I’m not saying you’re wrong–the complaints are pretty plausible and a lot of the issues seem in line with general institutional failures to address issues of recreational drug use and addition in an intelligent way.
I am saying that I can hardly fault @chip-daniels for being wary of the boy crying wolf, here.Report
As mentioned, I was pretty laid back when the FDA announced the regulations. It seemed better than I had feared. I wrote a post saying so. The “deeming” thing was weird, but it seemed like the people who were irate about it were being awfully dramatic. I barely even commented on it because I figured deeming couldn’t mean what they said it meant, because that would be crazy.
It turns out that it meant exactly what they said it meant. They didn’t convince me of this, the FDA did. They’re really going to do this! Or at least, they plan to.
A part of me still can’t believe it. A part of me believes that they’ll have to fix this. Except nothing I’ve heard from the FDA indicates that they recognize a problem a problem to be fixed, or that they would consider obliterating the ecigarette industry as a negative. If it were up to them, ecigarettes wouldn’t be on the market to begin with (and I’d probably still be a smoker).
(I don’t think the industry will be obliterated. Big Tobacco – ironically – will survive, and I expect Nicopure and a couple others maybe as well. Contrary to Chip, if something doesn’t change I do believe my primary ejuice supplier will go out of business and it will be because of the FDA. I just don’t see how they get through the deeming process, as it is now written. They haven’t shuttered their doors, but I suspect it’s because they’re hoping for a future change, and/or are too heavily invested and will have to draw down more slowly.)Report
There used to be a cigar factory in downtown Los Angeles, the oldest cigar factory on the west coast, and my personal favorite cigar supplier.
In 1998 actor Rob Reiner successfully pushed Proposition 10 to victory, and implemented a tax on tobacco products. The owner of the cigar store declared defiantly to me that he was not going to pay that damn tax, and instead relocate out of state.
He did, and the business collapsed. Transitioning from brick and mortar to online only is tricky.
The thing I found ironic was that the tax would have amounted to about a dollar or so on each cigar.
Hand rolled fresh cigars that were retailing for about $5 to $10 each, and were an astounding bargain since other boutique retailers were getting almost double those rates.
And this during a long spike in cigar popularity when people would, and still will, pay nearly any price for their tobacco habit. I personally would have paid the tax and considered it a bargain even then.
Something something price inelasticity- maybe a conservative can give us an Econ 101 lesson here.
The point being- taxes and regulatory costs are just a small part of any business model- all the hysteria about them always seems to overlook that retailers face much larger cost shocks, and consumers regularly absorb them.
Flat out- How much would the cost of vaping have to rise, to get you to quit?
A dollar a package? Ten dollars?
If Secret Special Blend of Slurm were no longer available, would you quit? Or switch?Report
Taxes are pretty substantial when it comes to tobacco products (or, in the case of ecigarettes, “tobacco products”). It’s not comparable to many industries, in that respect.
In the case of ejuice, here is a list of proposals. I’m not sure which ones have passed and which ones haven’t. For comparison sake, a mL of ejuice costs anywhere from between 22c and 67c. So the proposed tax in Chicago could more than triple the price. Some states go by percentage and Minnesota would double it whether it’s low-end or high-end. These are not costs that can easily be absorbed.
The FDA isn’t a tax issue, it’s a regulatory issue. I’m not sure how possible it is to discuss it since you don’t seem to be clear on what the issue is, but I’ll try.
The threat of deeming is not day-to-day regulation. It’s not “You must have samples periodically analyzed” or “You have to have a sterile lab.” We’re not even talking about the EU where they micromanage tank sizes and battery wattage. Rather, the regulation in particular is “For every product you sell, you must go through a regulatory process that will cost hundreds of thousands of dollars.” (That estimate comes from the head of the FDA.)
Where are they going to get the capital? A lot of them won’t. I don’t think I would lend them money to do so. Among other things, the products might not even be approved. And vape shops and ejuice producers thrive on a wide selection of offerings, which they are unlikely going to be able to do going forward.
The answer, for a lot of them, is that they simply won’t. Unless something changes, a lot of them will go out of business. I can’t imagine my primary supplier being able to get through the deeming process.
I would welcome some typical regulation. I want safer batteries. Once we have more science on it, I’d like to see the amount of diacetyl in ejuice limited. I am even on board with some of the regulations the FDA passed down. Though I think the implementation was flawed, some sort of child-proofing seems like it was a no-brainer. As stated, when the regulations were first announced I was broadly supportive (until I found out what they meant). I want my products as safe as reasonably possible.
I’m not objecting to regulation. I’m objecting to this regulation. And I don’t blame anyone in the business for taking the off-ramp. I think some are waiting to see what comes of the lawsuits and whether there will be a change-of-course with the next administration, but I expect more to come.
Report
Well I could certainly be wrong, and not for the first time.
I’ll take a wait and see attitude about the safety of vaping about which we should rightly be skeptical.
Now I am off to enjoy the sunset with my evening cigar.Report
“He hasn’t lost one customer, hasn’t incurred a single penny of cost, yet shutters his (profitable) business.”
Ah-heh. “There wouldn’t be any problems if you just did things my way, and if you refuse to do it my way then you deserve to go out of business.”Report
Of course the FDA is keen on only having big players in the industry. 1) they can better afford the regulations (thus ensuring steady work being regulated by the regulators at the same time expanding their sphere of regulation-all ‘crats love to expand their power. 2) large companies are better source of hiring when those FDA bigwigs leave gov’t service and enter private practice to lobby the people they used to work with in gov’t.Report
““This is going to wipe out the e-cigarette business and leave Big Tobacco running the industry.”
Maybe this is the intention?Report
My more cynical self notes that public health advocates repeatedly and falsely portray ecigarettes as being a product of big tobacco and use that as an argument while advancing policies that will make the attack more true.
It’s also worth noting that tobacco companies are very limited in what they can say (per tobacco settlements) while ecig companies are not. Science journals won’t publish anything partially or fully funded by tobacco companies, but will for vaping companies.
So there are reasons that they might want ecigarettes to be a product of Big Tobacco.
But honestly I think that’s not a driving factor. Just noteworthy. I’m not that conspiratorial.Report
I’m thinking less conspiracy and more lobbying. I imagine BT is celebrating this. Would we put it past them to have pushed for this, directly or indirectly?Report
What the tobacco companies really wanted (and lobbied for) was a ban on open systems, because until recently they only sold closed systems. That, fortunately, didn’t happened. Had the FDA moved a couple years earlier, it probably would have. By the time they moved, open systems were too ubiquitous and there were too few horror stories to justify it.
The big lobby we worry about tends not to be Big Tobacco, but Big Pharma.Report
“My more cynical self notes that public health advocates repeatedly and falsely portray ”
Dude, take that statement and add any other product and how it’s SO bad and it’s a true statement.Report