Vaping Industry Adjusting to Regulations

Vaping Industry Adjusting to Regulations
Chris Redding of Lansdowne Vapes sets up a sample of e-juice.

Vaping — inhaling and exhaling the vapor produced by an electronic cigarette or similar device — is a relatively new industry on the rise.

Unlike cigarettes, vaping allows consumers to smoke e-liquid or e-juice that goes into an atomizer and is a mixture of propylene glycol and vegetable glycerine, usually with water-soluble food flavorings. Nicotine is optional with customizable doses and vaping has become known as a healthier alternative to smoking.

As of June 2016, vaping had turned into an $8 billion global industry and is expected to grow into a $20 billion-dollar industry by 2020.

But regulations introduced by the Food and Drug Administration (FDA) could stall American markets. Under those rules, everything related to vaping is considered a tobacco product. This includes even batteries and the buttons that go on devices, according to one manufacturer, Anthony Tran of V.C. Technologies LLC.

Manufacturers and retailers have until 2019 to comply with the new regulations, which are complex.

For each formula of e-liquid, manufacturers have to submit an application and paperwork detailing all ingredients and have the liquid tested in a lab — even if it’s the same formula just with different dosages of nicotine, each dosage requires its own application.

This will cost manufacturers millions of dollars and tens of thousands of man hours to complete, a significant burden for small businesses, Tran said. Updating hardware also requires lengthy applications and until it’s all registered, manufacturers cannot sell new versions of products.

“Business thrives on innovation and this is not helping,” Tran said.

There are seven vaping stores in Loudoun and surrounding areas. Although the national industry has struggled to adjust to the new regulations, shops in the county have remained fairly stable, Rustic Vapors sales associate Bryan Collier said.

Although shops have two more years comply, many are already displaying health warnings and other safety measures to protect consumers, Lansdowne Vapes sales associate Chris Redding said.

One of the biggest health scares related to vaping were e-juices with the ingredient diacetyl which was used in buttery flavors, he said. Diacetyl was found to cause popcorn lung —  a disease where inflammation obstructs the smallest airways of the lungs.

Redding said only a small percentage of e-juices still use diacetyl and retailers like Lansdowne Vapes do not carry products with this ingredient.

Devices also now come with safety features like overheat protections, short circuit protections and cut off times. E-juice manufacturers are now selling larger bottles to make the most of their product since each strain costs more money now, Redding said.

While the regulations have changed the industry, Collier said they affect manufacturers more than retailers. He also said the regulations regulate online sales more than physical stores. The most affected parties are small stores of e-juice that can’t afford the high taxes and fees.

“They have hindered us,” Collier said.

Before entering the vaping industry in July 2014, Tran worked as a fitness director at a Gold’s Gym. Some of his clients smoked and came across vaping as an alternative and recommended it.

“I definitely saw first-hand their lung capacity increase in a couple weeks,” he said of those he observed.

He started it as a hobby by first consulting for friends, but when he had to have knee surgery and needed to find a job that kept him off his feet, Tran moved into the vaping industry full-time.

“Next thing you know, I’m designing my own products and I haven’t looked back,” he said.

Redding said most older customers he sees come because they want to quit smoking, while younger customers come to quit smoking or out of curiosity. He was previously a cigarette smoker himself but made the switch to vaping because it tasted better and was better for his health. He said he helps numerous people a day stop smoking.

Tran said many domestic manufacturers have started selling overseas where regulations are not as rigorous. In the United Kingdom, vaping products are tested at a dedicated lab for $7,000 to $10,000, versus the millions it can cost in the United States, Tran said.

Countries like the UK and Canada have the same regulations with respect to warning labels and consumer safety, but the process to apply for permits and test products is more reasonable, Tran said.

“The only ones that can afford these fees are big tobacco and maybe one or two big vape shops,” Tran said, arguing for a rollback of some of the new regulations.

“This will kill small shops, including mine,” Tran said.