We don’t know what is going to happen to the FDA electronic cigarette regulations with a new administration coming into office. Vaping does have advocates in the House and Senate. It may be a bit worrisome that as Governor the new Vice President ratified very harsh anti-vaping laws in Indiana which became ground zero for the fight for vape rights. I am talking about the Right To Be Smoke Free coalition’s law suit. The Indiana vape laws have been especially damaging and the damage happened very quickly.
The Indiana vape laws went into effect in July 2016. Under the law, e-liquid manufacturers were obliged to acquire a permit permit in order to be able to sell e-liquid products in Indiana. It does not matter if the manufacturer is located in Indiana or not, even out of state manufactures require the permit. The permit demanded that manufacturing facilities meet kitchen code standards and security standards. Security standards are the big one here.
Guess how many Indiana companies are able to provide the necessary security protocols in order for a permit to be approved? The answer is one. I know what you are thinking and believe me I am thinking the same thing. Very nice to be that Indiana security company, huh?
So the one security company in Indiana that is able to verify and certify an e-liquid manufacturer to allow them to keep doing business in Indiana can only serve so many clients. Most of the e-liquid manufacturers may have been compliant but they did not have access to the opportunity to verify that. As a result that one security company issued permits to only 6 e-liquid manufacturers. The rest were no longer able to do business in the State of Indiana.
It gets worse. The Washington Times has reported that the Indiana e-liquid laws are now the subject of an FBI probe. The FBI has made no comment, as is their usual practice, but many Indiana office holders have stated that they have been interviewed by the FBI.
Republican Senator Ron Alting is Chairman of the Senate’s Public Policy Committee. Senator Alting is the one who ushered the Indiana vape laws through the process and indeed the law was ultimately signed and put into effect by Governor Pence. The one security company that was empowered to certify e-liquid manufacturers is a Lafeyette based firm called Mulhaupt’s Inc. Mulhaupt is headquartered in the district of… guess who? Yes, Ron Alting.
What Happened In Indiana?
Here we are just six months after Indiana’s e-liquid laws went into effect. In July, vapers in Indiana could choose from over one hundred different e-liquids. Including many local companies. As of January 2017, we are finding out that only 7 e-liquid companies remain in business. The Indiana vaping laws in reference to e-liquids have created a monopoly.
By the way, these laws applied only to e-liquids that were sold for use in open systems. Vape tanks, drippers, RTAs etc. The laws did not apply to e-cig refill cartridges. As a result the Big Tobacco cigalikes sold in convenience stores and gas stations are unaffected by the law and required no effort for compliance. Governor Mik Pence is a Big Tobacco guy and he once held the position that smoking is not harmful. In a 2000 Oped Vice Preseident Pence wrote that 9 of 10 smokers do not get lung cancer and wrote “Time for a reality check, smoking does not kill.” Does that not sound like the Big Tobacco playbook?
That is not to say that is where Vice President Pence is now and we really do not know what the position of the new administration will be on vaping. We know President Trump does not smoke and frankly detests smoking. That is great and hopefully he will want to find a policy that is good for American entrepreneurs and will give smokers an alternative to combustible cigarettes. I suspect the Vice President will support any position the President takes.
What Else was In Indiana Vape Laws? What Now?
Indiana vape shops are ding okay despite the onerous regulation. Indiana vape shops were required to obtain a tobacco sales certificate. That hurdle was not so bad. In the vaping community, we do not like being associated with tobacco but ultimately that is not going away anytime soon.
Of course once vape shops have their certificate they can only sell e-liquids offered by companies that have the appropriate permit. So that means vape shops are very limited in what they can sell. Dozens upon dozens on Indiana e-liquid companies have gone out of business.
It should be noted that at the time the Indiana law was put into effect many other state lawmakers warned that these laws would create a monopoly. They were ignored but now they are getting something done. State Senator Randy Head, R-Logansport, is sponsoring an overhaul of the law. He said that “The permitting process should be up to the government. We shouldn’t relegate that to a private business.”
The Indiana e-cig laws will be revamped and that is great news. Unfortunately for the dozens of companies that have already been put out of business, it could be too little too late. Their customers will have moved on to new products. Their market share has been damaged. Not to say they can’t get it back but it is unlikely that the vibrantly competitive market place that existed before the laws will return.
Strict Regulations Do Not Work
Indiana certainly gives the vaping community a strong argument that strict, over-reaching electronic cigarette laws do not work. In fact, Indiana proves that over-regulation is bad for business and bad for public health.
Hoosier Vapors is an Indiana trade advocacy group that has undertaken a vast, statewide survey of electronic cigarette consumers. The results are disturbing. Indiana vapers are going underground.
The survey results showed that 30% of people said that they now buy e-liquid online or out of state. That is to be expected. But here is where it gets scary. A full 10% of vapers said that they have taken up home brewing. They now make and often sell their own e-juice. A black market of unsafe e-liquid is something that all of us in the industry could see coming and sure enough here is the evidence. Black market, underground or home brew e-liquids are bad for public health. One can only hope that regulators take note.
Could This Predict The Future Of Vaping Across The Country?
Do Indiana vape laws predict what might happen to vaping across the country as FDA regulations go into effect? Yes. Absolutely. Everyone agrees that we need common sense regulations to ensure product quality But what we frequently see are sets of regulations that result in monopolies. While the FDA regulations may not mirror the Indiana regulations, the end results are likely to be similar.
We know that not all electronic cigarette and e-liquid manufacturers are going to be able to afford to pay for the FDA rubber stamp of approval. It will not matter if they meet the standards, they will not be able to pay the costs of getting the rubber stamp. They will disappear. Some vaping industry analysts, like Bill Godshall, estimate that 99% of vapor products will disappear.
The end result will be a win for Big Tobacco and Big Pharma, lost jobs, monopolies and pushing people undergorund where the products will not be safe. State lawmakers in Indiana are working hard as we speak to try and undo the damage. They are vowing to fix the law. In the US Senate, we have Senator Ron Johnson who is very active in the fight for vaping rights. There will be a new FDA head. A new CDC head. And maybe a chance to not make the same mistakes that Indiana made.
Indiana gives us this glimpse of the future. A future that we can still change.