The most important part of VPX NOLA this weekend had nothing to do with new e-liquid lines, cloud competitions, or after-parties. Instead, it was a panel of industry leaders who took part in a hugely informative session on the state of the vaping industry.
Members of the panel were:
- Cynthia Cabrera, Executive Director of Smoke-Free Alternatives Trade Association (SFATA)
- Gregory Conley, President of American Vaping Association
- Eric P. Gotting, Partner at Keller and Heckman LLP
- Stefan Didak, NotBlowingSmoke.org
- Joe Barnett, The Vaping Militia
Although turnout was light at the beginning, more and more people gathered around the stage to listen as the event progressed. For those who missed the panel discussion, here is a detailed summary.
I apologize in advance if anything below is incorrect or if I’ve misquoted any of the speakers. (I haven’t taken this many notes since college — and on my iPhone, no less.) Please email me with any feedback, corrections, or additions and I will update this post immediately.
For those who aren’t familiar with the Food and Drug Administration (FDA) “deeming regulations,” here’s a quick explanation: The FDA has proposed that certain products, including e-cigarettes and e-juice, be considered as tobacco products for the purpose of regulation. The new rules, which would be a catastrophic burden to the vaping industry, were sent to the White House for review in October, but they haven’t been finalized. Much of the VPX NOLA panel discussion centered around these deeming regulations.
‘No One Will Be Spared’
Cynthia said FDA deeming regulations are being reviewed, and if they are enacted without changes, “no one will be spared.” No one in the expo hall, from the biggest sponsor to the smallest vendor “gets a pass.” She said that as an industry, we will all be out of business unless we work together and take action.
Cynthia, who talks to vape businesses all the time, said many of them do not understand how devastating the FDA’s deeming regulations will be if approved. She recalled a meeting she had with the owner of a large company who believed that the regulations would actually be good for business, that they’d spend some money getting their products tested and applied for, while their smaller competitors would go under, leaving more market share for them to capture. Not the case. She said even the largest companies in the vaping industry — as you’ll see below — will be eliminated from the market, not only because of the immense financial burden, but also because of regulatory and testing hurdles that businesses in this industry (except potentially for Big Tobacco) are unequipped to handle.
Attacks on the industry are coming from multiple fronts. In addition to the federal FDA deeming regulations, state and local governments have been proposing and enacting legislation (like vaping bans) that restrict the rights of vapers at the local level.
There also is the threat of Big Pharma, which funds public health organizations and nonprofit associations; and Big Tobacco, which lobbies against open-system products to gain market share for their closed-system products. This is an oversimplification, but you should get the idea: Lots of special interests with lots of money and many different stakeholders are fighting hard to destroy the vaping industry. “They are all threats,” Cynthia said.
Right now, the White House Office of Management and Budget (OMB) is reviewing the FDA’s deeming regulations and will decide whether to accept them or amend them. While this review process has no official timetable, they are being urged to act quickly and Cynthia believes it could be decided as soon as December 2015 or January 2016.
Here are ways you can act:
- Meet with the OMB. As business owners, Cynthia stressed, you have the right to meet with the OMB and make them aware of how these regulations would affect your business. The OMB’s job is to review this largely from an economic perspective. This is an industry dominated by small businesses. You can present the OMB with real, concrete data showcasing how these regulations will cause you to remove products from the shelves, lay off employees, go out of business, and pay less in taxes. Do you have data about your customers’ flavor preferences to prove how important flavored e-liquid is to those trying to quit? Forget about emotional arguments and develop strong arguments supported by facts, numbers, and real data from your business.If you want to meet with the OMB, Cynthia has offered to help you set up and prepare for a meeting. You can contact SFATA here.
- Support House of Representatives Bill HR 2058. The OMB can accept, reject or request changes to the FDA’s deeming regulations. If the OMB accepts these regulations without any changes, Cynthia says passing HR 2058 (The FDA Deeming Authority Clarification Act of 2015) will be “instrumental.”If you don’t know what HR 2058 is or have not yet taken action on it, please check out CASAA’s National Call to Action. From CASAA:
The FDA Deeming Authority Clarification Act of 2015 (HR 2058), introduced by Representative Tom Cole of Oklahoma, would save the U.S. vapor industry from being destroyed by improper regulations by the FDA. This bill would amend the Food, Drug, and Cosmetics Act to change the grandfather date for “deemed tobacco products.” This change would allow for all vapor products currently on the market to remain on the market without being subject to the burdensome (read: prohibitive) pre-market FDA approval application process.
- Convert the unconverted. Talk to your non-vaping family, friends, neighbors, and local businesses, letting them know how vaping has changed your life and how the FDA (and perhaps your local government) is threatening your health by restricting these lifesaving products. As an industry, Cynthia said, we are “too insulated.” Make sure the people you know — the people in your community — are aware of your side of the story.
- Have some vaping etiquette. This is obvious: Don’t give anyone a reason to dislike you as a vaper. Be courteous and respectful to those around you. We know secondhand vapor is harmless. That doesn’t mean it’s pleasant to those around you.
‘All I See Are Companies That Seem Clueless’
Greg started off by telling us how tired he is. Not from constant traveling, but by the general lack of awareness throughout the industry about these crucial issues. “All I see are companies that seem clueless.” Vape businesses need to know about these issues and start taking action.
He seemed disappointed by the audience turnout and began projecting his voice as loudly as possible so others throughout the expo could hear him. More and more people came to the stage.
His message was that if you think this industry is too big to be destroyed, you are mistaken. The vaping industry is a “drop in the bucket” of the U.S. economy. “If I sound angry, it’s because I am angry.”
Greg painted a vivid picture of what the industry would look like if the FDA deeming regulations are enacted as proposed, without any changes:
Every product on the market will be affected. Not just e-juice. Not just cigalikes. Even hardware and nicotine-free e-liquid (yes, you read that correctly). Every single e-cigarette product and accessory will be deemed a tobacco product and subject to the regulations proposed by the FDA.
So what would this actually mean for vapor products?
Applications would require $6-7 million in testing and other costs for each individual product. For e-liquid, that would mean every flavor and every nicotine level would be subject to its own application and testing, and you’d be responsible for the resulting costs — all without any guarantee that your product would even be approved.
During Q&A, Greg explained that much of this money would go to product testing, such as hiring toxicologists, psychologists, and other medical or research professionals. The burden would fall squarely on the business itself. There are testing centers and private labs that were preparing to enter this market to help vape businesses test their products more cost-effectively, but unfortunately, many of these labs are no longer an option because the FDA has dragged its feet for so long.
Greg also clarified that the $6-7 million per product estimate was likely based on cigalike products. It’s possible that e-liquid and other more advanced equipment could have substantially higher costs, potentially up to $20 million per product.
If you have not filed a pre-market application (PMTA) with the FDA by the time the regulations are enacted, you may have as little as 6 months from the date the regulations are enacted before your products are disallowed on the market. Six months is a worst-case scenario — it could be 1-2 years. But regardless, your products would be off the shelves eventually, and anyone selling unapproved products after this time period would be selling illegal products.
- Want to know what a PMTA would actually entail? Dr. Michael Siegel outlines the (essentially impossible) testing and proof necessary for an application to be accepted in his blog post published Monday, November 9. Even if you can afford the ridiculous amount of money necessary, your chance of approval seems slim at best.
It wasn’t all bad news from Greg. In the Q&A, he admitted he has a less pessimistic view of the OMB and how it might act on the FDA’s deeming regulations.
However, if the OMB doesn’t request any changes, and HR 2058 is not passed, Greg expects litigation to play a large role in what happens next. Greg is a lawyer, and believes that the industry has many valid arguments on constitutional grounds. Nonetheless, he doesn’t want to leave it to the courts, so his effort is going to support HR 2058.
Additionally, Cynthia mentioned here that if it does come down to litigation, our best bet is to “overwhelm them with lawsuits of the http://sideeffectsofxarelto.org type”.
The Fight in Indiana
Eric P. Gotting
Partner, Keller and Heckman LLP
Director and President, Right to be Smoke Free Coalition
Legislation has been passed in Indiana that would have a devastating impact on the vapor market, not just in the state, but in the entire U.S. Eric is a Partner at Keller and Heckman LLP, a firm that has filed a lawsuit in Indiana on grounds that this legislation is unconstitutional. The lawsuit was filed on behalf of three e-liquid manufacturers — Cosmic Fog Vapors, Mt. Baker Vapor and Vapor Shark — along with an Indiana vape shop.
Eric invited Rob Crossley from Cosmic Fog Vapors to say a few words about the Right to be Smoke Free Coalition, formed by the four companies mentioned above. Rob spoke with passion about the coalition’s work in Indiana and urged vapers to get involved. While the organization will focus on other issues as well, challenging this legislation in Indiana is its top priority. The R2B website sums up the legislation:
The State of Indiana recently adopted a law that could wipe out the e-liquid industry in that state and, if not taken off the books permanently, could create a dangerous precedent for other states. Effective July 2016, the law prohibits e-liquid manufacturers, whether or not they are located in the state, from selling products to retailers and distributors in Indiana without a permit, which requires compliance with expensive and burdensome manufacturing and security protocols that may be impossible to meet. Indiana vape shops will also be required to obtain a tobacco sales certificate and are prohibited from selling e-liquids where the manufacturer has failed to obtain a permit. Of most concern, the statute is aimed solely at e-liquids used in ‘open-system’ products, while giving manufacturers of ‘closed-system’ cigalikes a free pass.
In the Q&A, Eric explained a few of the common-sense arguments they have to challenge this legislation:
- The Due Process Clause of the U.S. Constitution basically says that the government can’t pass laws that don’t make sense or that are impossible to meet. For example, the legislation requires vape businesses to hire a private security firm that meets certain qualifications — but this is an impossible standard since, as far as they know, no such firms with these qualifications/certifications actually exist.
- The legislation would only regulate open-system products while leaving closed-system products unregulated. This could be considered unconstitutional based on the Equal Protection Clause.
- Additionally, it’s unconstitutional for Indiana to regulate businesses that are out of state. The legislation attempts to regulate all e-liquid manufacturers that want to sell products in Indiana, no matter where in the U.S. they are located.
Greg Conley believes these arguments are very strong and gives them his endorsement.
Spearheading Local Marketing Campaigns.
For those of you unaware of the work Stefan is doing, you need to check out Not Blowing Smoke. This organization is leading the fight in California, where the California Department of Public Health has invested millions of taxpayer dollars into an anti-vaping campaign called Still Blowing Smoke. Their campaign is scary propaganda, presenting misleading and downright false information about the alleged risks of vaping.
Not Blowing Smoke is working to expose these lies by California Department of Public Health and inform the public about the reality of vaping as a “consumer-created solution to the tobacco problem” and not a dirty trick by Big Tobacco to addict kids.
Check out NOTBlowingSmoke.org, watch their videos, and donate to the cause. What happens in California will impact the rest of the country.
Stefan has also created a new website, FDAregs.info, to help clarify information about the FDA deeming regulations and how they will affect consumers and businesses if enacted without changes.
Stefan’s talk was short and sweet. Not Blowing Smoke is organizing a national — but locally focused — campaign to expose lies and get the truth out there to the public. He couldn’t go into detail about the specifics of the campaign, but the gist is that they are creating multi-media content for ad campaigns and will allow anyone in any state to use their material for locally targeted advertising at no charge.
You can see how compelling and well-produced their videos and graphics are on their website. If you buy ad space — billboards, radio, TV, etc. — they will provide you with the content at no cost.
The vape community in general understands what’s going on because we use these products, and we can get this information out there and shared on social media. But we need more than social media reach. We need mainstream media reach, and Not Blowing Smoke is giving small businesses the tools we need to reach a much wider audience with this crucial message.
Please email Not Blowing Smoke for more information, or if you’d like to contribute to the local campaign.
‘Don’t Be a Hypocrite’
Joe had two important points to make.
First, he brought up the creators of LAECR, the Louisiana Association of Electronic Cigarette Retailers. There are dozens of vape businesses in Louisiana and we all need to work together on a united front to combat local vaping restrictions and regulations, such as the recent Louisiana state tax on e-liquid. It should no longer be about competing businesses, but about partnerships and mutually beneficial relationships to advance a common goal.
You can sign up and donate to LAECR on its website.
LAECR is collecting testimonials from former smokers in Louisiana whose lives have been influenced by e-cigarettes. Contact LAECR to share your story, so it can be used in their lobbying efforts and as they meet with our city and state representatives.
The second point Joe made is the importance of supporting the vape businesses that are playing a role in advocacy efforts. In Louisiana and across the country, there are plenty of vape shops and juice companies to do business with. “Don’t be a hypocrite.” If you know a business is engaging in poor practices don’t shop there! Support the businesses that are doing their part to advance this industry.
If you have any corrections, feedback or additions, please email me and I will update this post immediately.