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FDA’s costly new rules may sink local ‘vape’ shops

The clock is ticking for the more than 130 small “vape” shops in Western New York that the federal government now wants to treat like tobacco manufacturers.

When sweeping new Food and Drug Administration rules go into effect next month, local shops will have two years to complete a pricey licensing application or close up shop for good.

The regulation process is so long, confusing and expensive that coming into compliance will be impossible for local independent retailers, shop owners say. As a result, most, if not all, of the small shops in Western New York are likely to close once the two-year grandfathering period expires.

That could leave storefronts vacant, hundreds of people out of work and consumers with far fewer choices.

The dispute is over vials of flavored liquid, usually containing nicotine, known as “e-juice,” and the hand-held electronic e-cigarettes that are used to vaporize and inhale them. The new laws don’t treat the vape shops that sell the supplies as stores. Instead, because most of them mix their own e-juice, the FDA is requiring those vape shops to register as tobacco manufacturers.

Along with that, they’ll have to register every single e-juice flavor, e-cigarette component and e-cig accessory, providing the FDA with full documentation of each product’s ingredients and manufacturing process.

The cost to do all of that is out of reach for most retailers, critics say. The FDA estimates that the licensing process would cost from $285,000 to $2.6 million per product. Some analysts estimate that the cost could be closer to $10 million per product.

With hundreds of e-juice ingredients, there are literally billions of flavor combinations. Registering even a fraction of them would cost these mom-and-pop shops millions of dollars.

Even if a retailer could afford to register one or two e-juice flavors with the FDA, the return on investment wouldn’t be enough to even recoup the licensing costs. It certainly wouldn’t be enough to keep them in business.

That’s because a big part of the appeal of vape shops is the endless variations of e-juice flavors custom-made by each retailer. A shop with just one or two flavors – registered or not – would not likely be able to keep the doors open.

Three years ago, after watching her cancer-ridden father quit smoking with e-cigs, Stacie Blazynski and her mother, Sally, opened the Vapor Room, a vape supplies store in North Tonawanda. Since then, it has been their primary source of income.

But even though business at the store is booming, the Vapor Room cannot afford to go through the FDA approval process and will soon be forced to close.

Most customers of the Vapor Room are female, and many of them are senior citizens – some of whom used e-cigs to quit smoking after as long as 50 years. They come in for Blazynski’s specialty flavors, such as French Toast, Orange Dreamsicle and Cake Batter. Her proprietary blend, Cloud 9, is a big seller that other shops have tried to emulate but can’t quite duplicate.

Energetic and bright, Blazynski loves interacting with customers – especially custom-mixing flavors for them while they wait. For her, creating new e-juice recipes feels like baking a cake.

She orders her e-juice ingredients from Flavor West, a California flavoring company that sells food-grade flavorings to candy-makers and bakeries. Each vial of e-juice costs $1.50 to $3.50 to make, and she sells them for $14.99.

Blazynski said she expected and welcomed industry regulations but thought the process would be more like the way that health departments regulate the restaurant industry. She thought that maybe there would be rules about measuring, preparing and storing ingredients, or others ways to ensure consumer safety.

But she never thought the laws would put her out of business.

“It makes it impossible for us,” Blazynski said. “So we’ve got two years to figure out something else.”

As the thousands of small vape shops across the country begin to fold, Big Tobacco stands to make huge gains in the $3.7 billion e-cig industry.

One such manufacturer is blu, which is owned by Imperial Brands, formerly Imperial Tobacco Group, the same British multinational company that produces Kool, Winston and Salem cigarettes. For a company that made more than $33 billion, as Imperial did last year, the regulations are much less onerous.

Opponents of the new regulations use blu to bolster their contentions that the FDA rules are bad for consumers. Not only will they hand the market to Big Tobacco on a silver platter, but they will squash innovation, critics say. Blu has only seven flavors, and peach schnapps and piña colada are as adventurous as they get. Hobbyists also spend a lot of time building and modifying their e-cigs with various components. Blu sells just two different e-cig kits, both of them based on older technologies.

Tony Abboud, legislative director for the Vapor Technology Association, called the rules “unreasonable and excessive” and said they would push consumers back to traditional cigarettes.

“The FDA will, in one stroke, wipe out nearly a decade of widespread consumer acceptance of these products,” he said in a statement. “At the same time, the FDA will kill nearly a decade of innovation in the vapor technology industry and the many thousands of small and mid-size businesses in communities across this country.”

In the United Kingdom, e-cigs are considered medical devices for smoking cessation, the way nicotine patches are here.

Public health is at the heart of the matter, said Gary A. Giovino, a professor of health behavior at the University at Buffalo. To ensure consumer safety, he said, the industry has to be regulated.

“Without it,” he said, “we’ve got snake oil.”

He is convinced that e-cigs are safer than combustible cigarettes but that there needs to be more scientific data to prove it. These regulations may help provide that, since the licensing process requires such extensive documentation about what is in each product.

But he also thinks there has to be a better way to go about regulating the industry. The e-cig business doesn’t have to remain the completely unregulated “Wild West” it started out as, he said, but it’s also not necessary to clamp down and completely choke the life out of small, independent retailers.

“I see good arguments on both sides,” Giovino said. “There has to be a sweet spot, a middle ground.”

By the time the government finds that middle ground, however, there may not be any retailers left to stand on it.