Gregory Conley has warned members of the American Vaping Association for years that it would be possible to win a battle, but lose the war, when it comes to heightened federal tobacco regulations.

The biggest concern of Conley, the advocacy group’s president, came to fruition Thursday when the Food and Drug Administration announced plans for restricting flavored electronic cigarette and vaping products.

The nicotine liquids for use with open-pod e-cigarettes will remain available for now in tobacco and vape shops — in large part because FDA and other Trump administration officials believe those products lack appeal to individuals under age 21, and that those shops are more responsible at age-verification policies than other retail outlets.

However, the FDA also determined that makers of the nicotine liquids are manufacturers, and thus required to submit a premarket application by a federal court-mandated May 12 deadline in order to be included in a 12-month FDA review process.

A key element of that process is allowing those products to remain available for sale.

The premarket standard requires the FDA to consider products’ existing risks and benefits to the population as a whole, including users and non-users, particularly as it compares with traditional cigarettes.

“There is virtually no chatter about people actually filing (premarket applications) from the e-liquid side,” Conley said.

In that scenario, small vape shops dependent on large nicotine-liquid makers could begin closing in mid-May from lack of product from legal sources.

Avail Vapor, based in Richmond, Va., claims in its marketing it is “the leading premium e-liquid manufacturer and retail business.” It has one store in Winston-Salem and two stores in Greensboro.

The company could not be reached for comment Friday on how the FDA’s premarket application requirement for e-liquid manufacturing would affect its business.

For manufacturers of cartridge-based e-cigarettes, such as Juul Labs Inc., R.J. Reynolds Vapor Co., NJoy and Fontem Ventures, they have a 30-day window to stop making, distributing and selling “unauthorized flavorings” or risk enforcement actions. The 30-day countdown is expected to begin early next week.

Analysts, industry officials and advocates have said for years it could cost millions of dollars for each product to go through the premarket regulatory pipeline.

The FDA, meanwhile, has estimated it would cost about $500,000 per product. FDA officials said Thursday they would offer application assistance to small manufacturers of vaping liquids.

“A vape shop that is in the business of manufacturing, by mixing nicotine and flavors, has a decision that it has to make about what business it wants to be in going forward,” said Mitch Zeller, director of the FDA’s Center for Tobacco Products.

“If they are involved in the manufacturing process, they are subject to the law.”

Premarket application

Even at the lower FDA estimate, anti-smoking advocates, such as Conley, say that cost will prove prohibitive for many vaping liquid manufacturers.

“The FDA has no answer for how a manufacturer, who may be lucky to end the year with $100,000 in profits, is supposed to file a (premarket application) for one product, let alone 30 or more,” Conley said.

“A lot of crooks are out there quietly peddling ‘$100,000 for a full (premarket application)” and garbage like that. Some have bought into it. Their applications probably won’t be accepted (by the FDA) for scientific review.”

Conley said the FDA “wanted an excuse to commence enforcement” earlier than May 12.

“Its major bone of contention is with products like Juul, but they’ve assiduously avoided acknowledging the fact that the deadline will kill small- and- medium-sized competitors.”

Most local vape shops declined to comment Friday when asked about their concerns about securing e-liquid supplies after May 12. Two expressed confidence that their supplier — which they would not identify — had the financial means to go through the premarket application process.

“It’s not just about meeting a manufacturing criteria,” Conley said. “If the industry needed to have its products made in five-star labs where you could eat off the floor, that would be manageable.

“The studies and data required as part of the (premarket application) on the product itself, as well as the uncertainty of modeling out the population-level impacts of flavored products the FDA seems to believe are a gateway to smoking, make the process unattainable for all but the most well-funded companies,” Conley said.


The May 12 deadline represents the culmination of nearly 3½ years of regulatory enforcement delay by the FDA. The agency gained in August 2016 the authority to regulate e-cigarettes, vaporizers, cigars, hookahs (water pipes), pipe tobacco, nicotine gels and certain dissolvables.

The FDA said in August 2016 that “manufacturers of newly regulated tobacco products will no longer be allowed to introduce new tobacco products to the market without first receiving authorization from FDA.”

On Thursday, the FDA stressed that any e-cigarette product currently available at retail “is illegally marketed” and only permitted “as an exercise of its enforcement discretion.”

The original Vuse version by R.J. Reynolds Vapor Co. is the No. 2 selling e-cigarette. Its current flavors are tobacco, menthol, mint, rich tobacco, chai, crema, fusion, tropical, mixed berry, melon and nectar.

Unlike Juul Labs Inc., which limited itself to menthol and tobacco flavors in November, Reynolds has not voluntarily removed any of its flavors.

Reynolds Vapor entered the FDA’s regulatory gauntlet Oct. 11 with its submission for premarket approval of multiple Vuse e-cigarette products. The FDA said Nov. 30 it would review whether Vuse can claim it is a lower-risk tobacco product.

Reynolds spokeswoman Kaelan Hollon said Thursday the company “is well positioned to submit applications for the remaining Vuse portfolio ahead of the deadline of May 12.”

The manufacturer said it will adhere to the FDA’s restrictions and remove all non-menthol and non-tobacco Vuse styles in early February.

“We have submitted a (premarket application) for multiple Vuse products, which includes several flavors,” Hollon said.

“The FDA guidance provided today is clear that flavors can return to the entire marketplace once they have been cleared through the (premarket) process.”

Financial impact

British financial research firm Jefferies said Friday that while vaping sales would take a near-term hit from the new rules, the overall financial impact for British American Tobacco Plc and Imperial Brands Plc would be minimal.

BAT is the owner of Reynolds American Inc. of Winston-Salem, while Imperial owns ITG Brands LLC of Greensboro.

BAT said in November it has chosen two Reynolds products — e-cigarette Vuse and “modern oral” Velo — among the three next-generation tobacco offerings it will emphasize globally in 2020, along with BAT’s glo, a heat-not-burn traditional cigarette.

It is not clear whether BAT plans to market all current Vuse flavors globally, or restrict itself to just menthol and tobacco.

Jefferies analysts project, as do many U.S. tobacco analysts, that most adult consumers of e-cigarettes and vaping would switch to menthol or tobacco, or potentially turn to higher-margin traditional tobacco products, such as Natural American Spirit cigarettes made by R.J. Reynolds Tobacco Co.

“We are actually bullish on implications of this final guidance,” Jefferies said.

Jack Bowles, BAT’s chief executive, said in a statement Friday that the FDA announcement “takes us a step closer to a predictable regulatory environment in a key marketplace, but focus must now shift to enforcement to ensure vapor market regulations are effective.

“We have long said it is not the marketing of these products per se that is the concern; it is the irresponsible marketing of them that should be robustly addressed.

“For us, smart regulatory frameworks partnered with responsible marketing and appropriate enforcement will ensure the sustainability of adult consumer choice across all categories,” Bowles said.



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