2015 looks set to be the most exciting year in vaping history. The growth of the e-cigarette market has been unparalleled, and this is the year that vaporizers and e-cigarettes will finally fall under government regulation. Regulation has been called for by doctors, governmental bodies and consumers alike, in order to both stabilize the industry and further the research into the long term health effects of vaping. The FDA’s proposed ‘e-cigarette rules’ are set to take effect later this year, but the proposals themselves have led to tension and opposition from anti-tobacco and pro-vaping lobbyists. At first glance, the proposals don’t read too badly. Child resistant packaging, restriction of sales to minors and labeling requirements all make sense, and are the types of measures one would expect from the FDA. So, why the opposition?
What Industry Advocates Have to Say
Since the onset of the e-cigarette boom, thousands of tobacco smokers have become vapers, in turn eliminating a considerable amount of the tobacco industry’s profits. Many have claimed that elements of the proposed FDA legislation are financially motivated, and that the bills have been designed to reclaim lost revenue, so to speak. George Conley, chairman of the American Vaping Association, is one such pro-vaping lobbyist who believes that the regulations “will work to the benefit of large tobacco and e-cigarette companies.” Hardline lobbyists such as Conley are very much of the mindset that “vendors and vapers should vehemently OPPOSE these regulations.”
Anti-tobbaco, pro-vaping group CASAA (Customer Advocates for Smoke Free Alternatives Association) has also shown intolerance to certain elements of the draft. After it’s initial release, CASAA issued this statement regarding the newly proposed regulations:
Yesterday’s FDA draft deeming regulation regarding e-cigarettes, other smoke-free alternatives, and other products is not as bad on its face as it might have been. However, a full review — in the context of background knowledge and institutional analysis — reveals that the proposed regulation is inappropriate, ill-founded, and potentially devastating for consumers. Read more…
In particular, the CASAA has shown a zero tolerance attitude towards any taxation of vapor-related products “other than a simple sales tax that consumer products are generally subject to.” The proposals have already fueled talk of extra taxation on vaping, most notably a sumptuary “sin tax” that would place electronic cigarettes and vaporizers in the same bracket as highly taxable luxury goods like alcohol. There are already 10 states with draft bills backing the increased taxation of vape-related products, with more expected to jump on board throughout the year.
Difficult Environment for Small Companies
Along with proposed sin taxes and the other associated tax increases, the CASAA has identified problems with the actual enforcement of much of the FDA’s legislation at a federal level. For instance, while labeling requirements and child resistant packaging make perfect sense in concept, applying such legislation from state to state will be problematic to say the least. The CASAA has asserted that “too many different state and local laws will make it difficult for products to cross state lines, reducing state access.” In effect, the implementation of state-specific e-cigarette legislation will make it nearly impossible for small vape producers and distributors to break out of their state boundaries, thus markedly decreasing their potential for growth at a national level.
Perhaps the most controversial of these proposals has been the “grandfather date” scheme and the application of an expensive “approval application tax” for producers seeking to put new products on the market, (or old products which were released within the grandfather period.) Two years after the regulations are finalized, any e-cig or vaporizer put on the market after 2007 will be banned unless its distributors have paid their approval application tax. This will certainly have a considerable effect on the industry and will restrict emerging and existing small time e-cig producers.
Executive Director of Smokefree Pennsylvania Bill Godshall predicted that the FDA’s proposals would have a devastating effect on the vaping industry, and “would reduce the number of legal e-cig manufacturers from more than a thousand to less than a half dozen.” Godshall has suggested that these regulations may give rise to a developed black market, making the problems worse rather than improving them and, most importantly, channeling the legal, taxable profits back to tobacco bosses.
Rules Will Be Finalized Later This Year…
Although Big Tobacco companies are undoubtedly involved in the process, the FDA is also working with pro-vaping lobbyists (including CASAA) to find some common ground before the proposals are finalized later this year. Only time will tell how these proposed rules shape up, but there’s no denying that this legislation will have a marked effect on the vaping industry, either for better or for worse.