Diversification Is the Key to Survival for Vape Shops in 2020

In 2019, it appeared for a while as if the entire vaping industry might be at death’s door. With a mysterious vaping-related lung illness – later found to be related to illegal THC vaping products – sweeping the nation, President Trump threatened a move that would have decimated the industry overnight. He threatened to ban all e-liquid flavors except tobacco. A partial ban did ultimately occur, but the ban only affected flavored pods and cartridges for closed-system vaping products; all bottled e-liquids will remain available for now.

The Future of the Vaping Industry Is Uncertain

When the FDA announced its ban on flavored e-cigarette cartridges and pods, you’d think that vape shop owners around the country would breathe a collective sigh of relief. The fact is, however, that this is not a time for relaxation if you’re in the vaping industry. Surviving the flavor ban is just the first part of the gauntlet, and the worst is yet to come. By May 2020, every vaping product in America will need to have a pre-market application pending with the FDA or risk being pulled from the market. As of January 2020, just one vaping product – Vuse – has a pending application on file.

Some people have estimated that filing a pre-market application for just one product will easily cost hundreds of thousands of dollars. For e-liquid makers that have dozens of products, completing the application process will likely be impossible. Barring a last-minute change in how the government regulates vaping products, it’s likely that Vuse and other closed platforms will be the only vaping products left on the market in May 2020. Needless to say, a vape shop can’t survive selling the same products that are already available in every gas station and convenience store.

Diversify Vape Shop

Wise Vape Shop Owners Have Already Begun to Diversify

Vape shop owners like Bradley Anderson of Vapor Connection LLC saw the writing on the wall long ago. Vapor Connection isn’t just the best vape shop in the Pittsburgh area; it’s also Pittsburgh’s best source for CBD, kratom and a variety of other products. Adding other products was a calculated move on Anderson’s part; it’ll help to ensure that Vapor Connection still has a future even if vaping products eventually become a minor part of the company’s business. Since Anderson incorporated CBD and kratom into his product selection early, he also got a head start on the other vape shops in his area. If the hammer comes down on vaping in May 2020, Vapor Connection will be ready.

As far as America’s other vape shops go – let’s just say that if you haven’t started diversifying your products yet, you’ve got a major uphill battle ahead of you. Starting immediately, you need to find other revenue streams. By May 2020, you need to get those revenue streams to the point where they’ll be enough to sustain your business even if you no longer sell any vaping products at all.

Why Vape Shops Everywhere Are Now Selling CBD Products

So, why is it that so many vape shops have been adding CBD products? CBD is a natural fit for the vaping industry for several reasons. First, many manufacturers of vaping products in the United States have started CBD brands because they have foreseen their own need to diversify. Like vaping products, CBD products potentially have very high profit margins. You can buy ready-made CBD products from hemp processors across the country. Just slap your label on those products, and you’ve got a CBD brand.

Since many owners of vaping brands have launched CBD brands, selling CBD is a natural for vape shop owners who can get those products through their existing distribution networks. The second reason why CBD is a natural fit for vape shops is because many people like to vape CBD – and CBD vaping products are not yet under the FDA’s regulatory umbrella.

If you’re thinking about adding CBD to your vape shop, here’s what you need to know before you begin. First, CBD is next on the FDA’s list once the agency gets vaping sorted out. CBD is one of the only products on the market that’s available both as an unregulated supplement and as an FDA-approved prescription medication. It’s difficult to say exactly how the FDA will regulate CBD, but regulations are certainly coming.

The second thing you need to know is that, regardless of where your vape shop is, you’re going to have competition if you enter the CBD market. Whole Foods and other health food stores now carry CBD. Supplement stores like Vitamin Shoppe and GNC are carrying it as well. If you can’t find a way to differentiate yourself from the other retailers in your area, you’ll end up investing a lot of money into inventory that doesn’t end up moving at all. You should have a plan in mind for differentiating the CBD side of your business from other retailers in your area before you even begin.

Consider Dry Herb Vaping Products as an Additional Revenue Source

One thing many vape shop owners don’t realize is that the other popular form of vaping – dry herb vaping – isn’t affected by the pending regulations that threaten the e-liquid vaping industry. Dry herb vaporizers are expensive, and the market for them is only going to grow as more people decide to switch from smoking cannabis to vaping it.

As harsh as the government has been on the e-liquid vaping industry, the federal attitude toward cannabis has only gotten more lenient over the years. It seems increasingly likely, in fact, that cannabis will eventually become legal nationwide. The idea has increasingly found favor among politicians who are tired of seeing the federal government waste money on a war against a drug that does little harm.

You’re already in the vaping industry; your vape shop has the potential to be your city’s top destination for dry herb and wax vaporizers – and don’t forget that dry herb vapes aren’t just for cannabis. You can just as easily vape loose-leaf tobacco in a vaporizer. If most of the e-liquid vaping products on the market do become illegal in May 2020, many e-liquid users are going to be looking for a way to consume nicotine that’s better than just going back to cigarettes. Tobacco vaping has the potential to become a very big business, and now is the time to start thinking about how your vape shop could fit into that picture.

Author: Jason Artman

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