Will Ecig Regulation Kill Small Businesses?
In the wake of the FDA’s proposal for new ecig regulations, the vaping community has been buzzing with speculation about how this will impact the future. While the larger vaping empires and big tobacco companies eagerly embrace the new regulations, some of the smaller ecig businesses are feeling uneasy. How will regulation impact these small businesses that are already struggling to stay afloat since big tobacco entered the ecig market? It will undoubtedly be an uphill battle.
Greg Conley, a member of the American Vaping Association and research fellow for The Heartland Institute, told the Washington Post that the proposed regulations could have a negative impact on many small ecig companies. The FDA will require all ecig manufacturers to file applications for any product that was introduced to the market since early 2007, which basically means all of today’s existing ecigs will be subject to FDA scrutiny and a lengthy application process. “A lot of these companies, they are supporting several employees, investing any profits back into their business… they can’t afford this, and it’s going to lead to whole lot of consolidation and increased prices for consumers,” said Conley.
Jason Magnuson, owner of Wyoming Vapor Company, also expressed frustration over the application process. “They’re requiring a separate registration for every flavor, every nicotine level in every flavor, every bottle size of every flavor, and for every propylene glycol and vegetable glycerin mix in every flavor. So for one of my flavors, that’s over 40 licenses and I have forty flavors.”
The time and money involved in received hundreds of licenses from the FDA is overwhelming for many businesses. Amy Schicketanz, owner of Straight Line Vapors, explained her take on the impossible situation. “Basically they’re going to make us do what drug companies do. We have to apply so for instance I carry ninety and five different nicotine strengths, to get one of those of the market is going to cost me right around ten million dollars.”
With those outlandish expenses mounting, many ecig businesses will be forced to call it quits. “What they’ve done is put a time clock on us and in two years it will put every small business that tries to do this like me out of business, and the only thing that will be left is the tobacco companies, Magnuson explained.
Small town vendors will still have the option to sell e-cigarettes with zero nicotine, but the big draw of e-cigs is the option to enjoy nicotine without the dangers of tobacco. So without the proper approval from the FDA, ecig companies won’t be able to operate. However, most of these companies won’t be able to afford the application process. It’s really a lose-lose situation for small businesses that could have extreme economical implications.
Conley said that if the proposed regulations are approved, it “all but guarantees the closure of tens or hundreds of small and medium sized businesses that have no connection to Big Tobacco.” For those that have dismissed the proposed regulations are fair and sensible, it’s important to get a realistic look at what the application process will require. “The FDA estimates that just one application will require over 5,000 man hours to complete, meaning that the true cost of a single application is likely in the millions,” Conley said.
What do you think… will the new ecig regulations kill small vaping businesses? Is this going to do irrevocable damage to the growing ecig movement?