E-Cigarette Industry Prepares For New Federal Rules
By Wayne Pratt
The rapid growth of e-cigarette stores in the St. Louis area and throughout the country might be about to hit a bump. The federal government is considering regulations for the industry. It could have sales of $10 billion by 2017, according to Wells Fargo Securities.
That has many entrepreneurs who make their living in the burgeoning sector concerned about its future.
Jim Buchanan is founder of Smoke Smart LLC, which operates three stores in the St. Louis area. The first location opened a few years ago, but Buchanan kept his full-time job as a district manager for an auto parts retailer. Within three months, he left that position to keep up with an expanding customer base that reaches from 18-to-80 years old.
"We believe in how it changes people's lives. We've literally had customers coming in crying and thanking us. They've never been able to get away from traditional cigarettes," said Buchanan.
He has scaled back some of his growth plans, due to the uncertainty of the pending U.S. Food and Drug Administration regulations. Those regulations are expected to include:
- a requirement to include health warnings
- age and identification restrictions to prevent underage sales
- a prohibition on vending machine sales, unless they are in areas where minors are not allowed
Manufacturers will also have to:
- register with the FDA
- report ingredient listings
- only market new products after federal review
- only make claims of a reduced health risk if the FDA determines there is enough supporting scientific evidence
Although Buchanan and others in the e-cigarette, or vaping, industry are concerned some of the regulations may go too far, others say they might not be strong enough.
The American Heart Association wants the devices to be subject to the same marketing rules as traditional cigarettes and says that is not in the FDA proposal.
"There are thousands of different flavors. Like bubble gum and cotton candy and fruit flavors. It’s very clear that they are being marketed to children," said Chris Sherwin, who is the association's director of state and local tobacco policy.
The American Heart Association, which recently issued its first policy statement on the issue, also says there is not enough scientific evidence to back up claims e-cigarettes help people give up traditional smokes.
"There’s a little bit of research showing there might be some effectiveness, but those research studies were not very large at all – so we cannot say that these products are effective," said Sherwin.
Buchanan insists he is living proof the devices help people kick the traditional tobacco habit.
"I was skeptical whether it would work or not. And when we started using them, we had no issues with a desire to smoke a regular cigarette," Buchanan said.
A.J. Moll runs media relations for Bistate Regional Advocates for Vaping Education - or BRAVE, a St. Louis-based organization that promotes the industry. He also credits modern vapor technology with helping him get off combustible cigarettes. He adds the potential federal regulations could have a negative economic impact, according to data gathered by BRAVE.
"Countrywide in the U.S., we're looking at 15,000 small to medium-sized businesses being shut down. Here in St. Louis you're looking at $600,000 in lost wages just for the employees - not even the employer."
BRAVE is not opposed to what Moll has described as "rational regulations" including detailed labeling and not selling to minors.
The e-cigarette sector in Missouri is marking a victory on one of those fronts after lawmakers in Jefferson City decided to override Governor Jay Nixon's veto of a bill that bans sales to most teens.
The legislative focus now shifts fully to Washington, D.C.
The FDA says it can't speculate on when final federal rules will be implemented. Most observers believe it will take 12-18 months, longer if the proposals get tied up in court.