Tougher federal restrictions on tobacco products could spell trouble for the e-cigarette industry. Under new Food and Drug Administration rules, such products will be prohibited for anyone younger than 18 and buyers must show a photo ID. (Dwight Ada Wochit
Vape shop owners already were dreading the implementation of an Indiana law that would severely restrict the products they sell. But the Food and Drug Administration took their concern to a new level Thursday, issuing guidelines that many say likely will put them out of business.
In addition to prohibiting sales to minors, the FDA rules now require that all electronic cigarette products made after 2007 receive government approval, a move that many shop owners fear will shutter the industry. The regulations apply to both electronic cigarettes that resemble traditional cigarettes and vaporizers.
“It’s the final coffin nail,” said Evan McMahon, chairman of Hoosier Vapers, a statewide industry and consumer advocacy group. “Everybody universally understands that this is not a regulation. This is a prohibition.”
About 200 to 250 specialty vape shops, many of them mom-and-pop businesses, exist in Indiana. Some of these make their own so-called e-juice, the liquid that goes inside the vaporizer. It comes in many different flavors, such as cookie dough and apple breeze, and often contains nicotine. McMahon said a recently-passed state law would restrict all but only a handful of companies from producing e-liquids used in vaping products.
While two lawsuits are pending to block the state law, McMahon said the latest word from the FDA would likely force the majority of shops to close once the federal regulation goes into effect two years from now.
“I don’t normally give recommendations to businesses, but I’m making one now, which is: When your lease runs out, don’t renew,” McMahon said.
David Cohn, owner of World of Vapor Indy in Irvington, already figured out how he could remain open with the new state law, which requires that any e-liquid manufacturer have a contract with a security company that meets specific qualifications that few such companies now have.
Fulfilling the FDA requirements is far more challenging. One aspect of the FDA regulations, requiring products to contain labels that say nicotine is addictive, would be onerous but doable, Cohn said. But the FDA requirement that all products that have hit the market since 2007 receive federal approval would likely be too burdensome for most e-liquid manufacturers to stay in business. The American Vaping Association has estimated that receiving approval for just one flavor would cost more than $1 million.
“Will I stay the two years? Yes, probably so,” Cohn said. “After that? I had plans on expanding and opening up more stores and hiring more people. I don’t think that’s a realistic goal at this point.”
For now, Mark Davidson, owner of Red Crane Vapors in Shelbyville, is taking his direction from industry experts like McMahon. Davidson said he had not even looked through the tome of regulations the FDA issued.
That offers little solace.
“I’m extremely nervous,” he said. “It’s my livelihood.”
It’s also his ticket out of smoking, Davidson said. After smoking for 22 years he quit about four years ago, which he said he would never have been able to do without the e-liquid alternative.
Vaping advocates often cite studies that suggest their products are safer than traditional cigarettes. And the British government agrees — they provide e-cigarettes as a cessation tool.
Not everyone sees the vaping industry as a healthier alternative to tobacco. The FDA emphasized concerns about the increase in youths using e-cigarette products, and it fears that, for many, use of e-cigarettes eventually translates into traditional smoking.
A number of state attorneys general, including Indiana’s, have been asking the FDA to issue stronger regulations on e-cigarettes for two years.
FDA oversight will create a level playing field so youth will not be able to take advantage of different local laws as a way to buy these products, said Bryan Corbin, public information officer for Indiana Attorney General Greg Zoeller in an email.
However, he declined to speculate on what the new rules might mean for the industry.
“No one can predict the retail sales situation years into the future, and it is unknown what might occur with legal challenges in court, or legislation before Congress. That could complicate that picture,” Corbin said.
McMahon, who manufactures 37 flavors of e-juice, is not optimistic. In the best-case scenario, he said, prices for these products will likely increase while most ofthe industry is forced out. The only winner in this picture, he said, is Big Tobacco, which already has made some forays into the e-cigarette industry.
“People are upset because their government just told them, ‘We want you to go back to smoking,’” he said.
Call IndyStar reporter Shari Rudavsky at (317) 444-6354. Follow her on Twitter: @srudavsky.