Thanks to a partial government shutdown, the FDA has missed yet another self-imposed deadline for announcing its proposed plans to regulate the e-cigarette industry. E-smokers in the United States can breathe more easily for a few weeks, but things are definitely going to change one way or the other. The only question is, how bad will it be? If you’ve successfully made the switch from tobacco to e-cigarettes, you’re probably wondering whether you’ll continue to have access to the same variety of hardware and e-liquid and whether prices will remain as affordable as they are now. Unfortunately, the outlook isn’t good.
Although the public doesn’t know for certain what regulations the FDA intends to propose, it seems likely that the goal will be to treat e-cigarettes in the same way as tobacco cigarettes. These changes will come under the guise of restricting access to e-cigarettes by minors, but the real issue at hand here is lost revenue; e-cigarettes are currently not subject to tobacco-related taxes amounting to an average of about $3.00 per pack — $1.00 to the federal government and $2.00 on average to the state. The tobacco industry currently posts yearly revenue in the tens of billions, and some analysts predict that e-cigarettes will begin to outsell tobacco cigarettes within the next ten years. If the government can’t figure out a way to apply the same punitive taxes to e-cigarettes, that’s quite a lot of money that won’t be pouring in.
So, based on currently available information and conjecture, this is one person’s opinion on what the future history of the e-cigarette industry might look like. If you’ve never taken an interest in government before, now is a good time to start. Take the time to contact your representatives and tell them about the positive effect e-cigarettes have had on your life. Urge them to keep their minds open and examine all of the information currently available before casting their vote.
December, 2013: FDA Announces E-Cigarette Regulations
In a public statement, the FDA finally announces its long-awaited proposed regulations for the e-cigarette industry. The proposal reiterates the FDA’s previous position that e-cigarettes are tobacco products and subject to the same product and advertising restrictions as tobacco cigarettes. When the new laws take effect, online sales of e-cigarettes will be banned. The ban will take place ostensibly to prevent minors from having access to e-cigarettes, but it will also have the pleasant side effect of making federal taxes easier to collect. Deeming e-cigarettes as tobacco products paves the way for states to enact their own taxes, which they quickly do.
Under the new rules, a pre-filled cartomizer with 1 ml of e-liquid will be considered the equivalent of a pack of tobacco cigarettes. After federal and state taxes take effect, the price of a single cartomizer will increase by an average of $3.00 nationwide. People will complain, but those complaints will go unheard because one pre-filled cartomizer still costs about 50 percent less than a pack of cigarettes. In addition, all e-liquids except tobacco- and menthol-based flavors will become illegal when the new laws take effect. US-based companies manufacturing e-liquids will have to undergo a lengthy and expensive testing and review process to remain in business by the time the new regulations take effect. Small “boutique” e-liquid companies around the country announce that they will shutter their doors at the end of 2014.
January, 2014: Big Tobacco Jockeys for Market Share
With the exception of Lorillard, which acquired the Blu brand in 2012 and quickly captured a large percentage of the e-cigarette market, Big Tobacco found itself largely unprepared for the explosive growth of the e-cigarette industry at the beginning of 2014. The Altria Mark Ten and Reynolds Vuze e-cigarettes failed to make a splash, proving that the tobacco industry had virtually no understanding of the growing subculture of “vapers.” What Big Tobacco does have, however, is massive cash reserves which they quickly put to use by acquiring as many large e-cigarette companies as possible. Those companies are rebranded with some of the tobacco industry’s best known names and logos. The new Marlboro and Camel e-cigarettes are smash hits, attracting millions of new users seemingly overnight as smokers around the country switch to the electronic versions of their favorite brands. Most of these people fail to notice that their e-liquid contains nicotine extracted from tobacco grown in China — but the Chinese government doesn’t. The state-owned Chinese tobacco monopoly quickly ramps up production and makes its nicotine available at a price American growers can’t match.
March, 2014: The End of the Vape Shop
The early years of the e-cigarette industry in the United States spawned a new type of small business: the “vape shop.” Rather than selling their products online, these business served their local communities by allowing people to try e-cigarettes before buying them and often making their own e-liquids in-house. Although many vape shops were successful locally, they earned nowhere near the amount of money needed to earn a profit at the much higher wholesale prices e-cigarettes and e-liquids would soon command. Vape shops around the country quickly begin to fold and their owners look for new work elsewhere.
July, 2014: The Florida E-Cigarette Coalition
After years of competition, five large e-cigarette companies in Florida make the surprising announcement that they will merge rather than accept acquisition by Big Tobacco. Tobacco’s “Big Three” become the “Big Four” as the newly formed coalition uses its combined resources to establish nationwide e-cigarette distribution in convenience stores and gas stations. The remaining American e-cigarette companies that have not been acquired begin to face the reality that they must either relocate to less restrictive environments overseas or close. Most companies effectively close, announcing via their websites that products will not be restocked once they are sold out. Others announce that they will remain in business for as long as possible and encourage their customers to stock up while they can.
December, 2014: The Last Hurrah
By the end of 2014, most American e-cigarette companies have either closed, been acquired or joined the Florida Coalition. A few companies have chosen to do business as they always have, taking orders until the new e-cigarette regulations take effect on December 31, 2014. Businesses with sufficient stock report sales amounting to hundreds of thousands of dollars per day as e-smokers bulk up their personal e-liquid supplies as much as they can afford.
January, 2014: New Laws Take Effect
At the beginning of 2014, online sales of e-cigarettes ceased, as did production of non-tobacco and menthol e-liquids. Most of the e-cigarettes still available to purchase were cigarette-shaped and sold in supermarkets, gas stations and convenience stores. Refill cartomizers cost an average of $20-25 per five-pack, but most companies pushed the more profitable disposable e-cigarettes instead. Costing about $150 per “carton” of ten, manufacturers claimed that these disposable e-cigarettes were the equivalent of two cartons of tobacco cigarettes.
January, 2015: Price Hikes Begin
With half of all smokers now converted to e-smoking, people began to report higher prices for refill cartomizers and disposable e-cigarettes in 2015. Although the Big Four tobacco companies blamed the price increases on increased taxes, they were enacted primarily to offset the loss of profits caused by the tobacco cigarette’s decline in popularity. The tobacco companies also had to offset the higher wholesale prices charged by their suppliers in China. With Shenzen-based companies now providing batteries, cartomizers and e-liquid for most of the world’s e-cigarette and tobacco companies, China appeared poised to become the world’s largest exporter of tobacco products.
So. I should ditch my thoughts of opening a vapor shop to mix flavors and allow customers to sample them before purchase? Darn!
This is kind of a knee jerk reaction at this point. There is no FDA regulation at this point, and many e-cig advocacy groups are stepping up to the plate to ensure that the industry is treated fairly. As an e-cig user, you should educate as to what is going on “for real”, and help educate those who are trying to understand the true issues with vaping.
As the industry gets large enough, it will become more difficult to regulate, unless we fail to regulate ourselves.
Vapers and smokers Together Never…
The whole reason we switched to vaping is so we dont have to subject our selves to poison and inhaling second hand smoke . I dont care as long as they dont force us to vape with smokers , Its not the same , we dont emit second hand smoke they do , so we as sure as done want to get sick from those smucks , if you are that dumb that you are still a smoker , after all this time ?
Lead article here mainly concerned w/Feds – what about the States? In NY, (both State and NY City),Cigarette Taxes on Cigs over the past several yrs have amounted to practically ‘Grand Theft’.NY State gets $4.35 per pack,NY City $1.50.They’re looking to do the same w/Vapers -3 bills pending in the Legislature right now. Two can play this game: I have (2) Overseas websites already or I may even make my own.Just think,a modern day form of /;Moonshining’As a NY City resident, combined they won’t be ‘Dicking’ me anymore, guaranteed!
No open a shop now and be the best one around. Fight the fight be active. There is so much to be made other than money