Money & Business

Vaping Association: FDA Rules Could Hurt Small Businesses

By / Aug 12, 2015 (Andrea Carpedi/ThinkStock)

Electronic cigarettes have been a popular smoking alternative for a while, and their rise has come largely from small-scale manufacturers. The American Vaping Association says that if expected FDA rules are too tough, the product’s growth could be threatened.

In the coming months, forthcoming Food and Drug Administration (FDA) rules on e-cigarettes could change the dynamic of what thus far has been an unregulated industry.

And the American Vaping Association (AVA) is bracing for the impact. The organization has been speaking up about the potential of the new regulatory standards to effectively force e-cigarette startups out of the sector.

The e-cigarette business has grown significantly since first emerging from China in 2004, with the retail vaping industry in particular expected to reach $3.5 billion in revenue this year, according to estimates from Wells Fargo Securities Senior Analyst Bonnie Herzog.

But in recent comments to the Los Angeles Times, AVA warns that the federal regulations could stifle much of the growth for the vaping industry’s startups and give existing tobacco companies the upper hand.

A Safe Alternative?

The organization is arguing that e-cigarettes—battery operated devices that rely on refillable or reloadable liquid nicotine inserts—are a much safer alternative for those looking to kick the smoking habit.

“Every month, more studies emerge showing that vapor products are far less hazardous than smoking for users, pose no significant risk to bystanders, and are effective at helping smokers kick the habit,” AVA President Greg Conley recently told The Salem News.

That argument has received mixed reviews from the medical community. The American Heart Association has suggested that vaping only be considered as a last resort for those looking to quit, and groups such as the Massachusetts Medical Society say that more research is needed to back the cessation arguments—particularly because it’s unclear to the public what else might be in the liquid nicotine refills.

The FDA says its doing investigations of its own on the issue as it works to implement a new rule, with agency spokesperson Michael Felberbaum telling the Associated Press that the regulations will allow “additional opportunities over the long term to make a positive difference in the public health burden of tobacco use in this country.”

While federal regulations are still in the works, many states and cities have already passed regulations of their own, many of which treat the devices as they would traditional cigarettes.

“These devices are not tobacco products, and treating them as such sends the absolute wrong message,” Conley said in his comments to The Salem News. He added that the e-cigarettes are not as risky as “big tobacco.”

Fear of a “Vapocalypse”

The biggest worry about the FDA rules among vaping companies is that the agency may apply the premarket tobacco application (PMTA) rule to the industry, a regulatory effort that the consulting firm SciLucent says could cost each business anywhere from $2 million to $10 million to comply with.

The fear is so intense, vaping manufacturers are calling it a “vapocalypse.” And that’s a message the industry is beginning to embrace.

“[F]or the vast majority of the players in the market, the FDA’s rule will result in prohibition, not regulation,” AVA said in a statement last month.

Patrick deHahn

Patrick deHahn is a contributor to Associations Now. More »

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