The vaping industry is hoping that the Trump Administration is the savior that it was been searching for, but there are conflicting signs of whether or not the current White House is on its side.
News Wire reported earlier this week that the vaping industry is still struggling after the 2016 Food and Drug Administration to categorize vape products as traditional tobacco products. Since the deeming rule was put into place, state governments have joined with the federal government in introducing new rules and regulations that have seriously impeded the industry’s ability to do business in the country.
However, it is thought that the Trump Administration, which is still in its infancy, could bring some much-needed relief to the market. This is necessary for the vape industry, as it is made up of small businesses that need some of the stricter regulations to be rolled back in order to be able to make a profit. The rolling back of regulations has long been one of President Trump’s campaign promises, one that he has partially fulfilled with an executive order that states that for every new regulation, two must be rolled back.
However, the vape industry isn’t 100 percent sure that the new administration is behind; a few statements from the White House indicate that it could work against the interests of the industry, which makes the hope of change a little more confusing than it first appears.
The vape industry has been hit hard in the last 18 months with misinformation and suspicion that rose from anti-smoking advocates and scientists who work with Big Tobacco. The industry, which is relatively new, has been hit with biased reporting and studies that claim, wrongly, that vaping is as dangerous as traditional smoking; this has already been proven to be false, most notably by a study by Public Health England that states that vaping is 95 percent less dangerous than smoking.
The fake news campaign has not stopped and it’s most serious consequence can be felt in the May 2016 decision by the FDA to implement a deeming rule, to go into effect in August of 2016, that regulated vape products as tobacco products under the Family Smoking Prevention and Tobacco Control Act.
The categorization requires vape products, including batteries and vape devices, to undergo the Pre-Market Tobacco Application, or PMTA, which must be completed by August 2018. Only by going through the application process and paying upwards of $400,000 per each application, can vape businesses hope to keep their products on the shelf.
The PMTAs has been cited for around a dozen vape businesses closing down or filing for bankruptcy; it is estimated that other businesses could follow suit. That’s because a separate PMTA must be filed for each product at each nicotine level. This could lead to millions of dollars in legal fees, an amount of liquid money that many vape shops just don’t have on hand.
But even if small businesses could afford to pay the application fees, they are hit with another problem: rising taxes.
States all over the country are raising the taxes on vape liquids, with price increases of three cents per milliliter being the average. Some states, like Pennsylvania, are implementing wholesale taxes on all vape products. The states believe that by having 40 percent wholesale taxes on the products will help fill the hole in their budgets. Unfortunately, the taxes are so high that many businesses are either shutting down, moving across state lines or transforming into online-only shops in order to avoid the fees.
The tax increases and the PMTAs have unintended consequences for one particular demographic: the former smokers who make up the vape community. With vape liquids already costing around $25 for a 30 ml bottle, raising the taxes any higher runs the risk of having these former smokers going back to traditional cigarettes, which are cheaper.
While the future looks bleak, it seems that many in the vape industry are currently pinning their hopes on the Trump Administration.
Major players in the vape community believe that the administration isn’t entirely enthusiastic or committed to the regulations the FDA put into place under the former president’s administration. This may be because Republicans are more in favor of small businesses and fewer regulations; it could also be because Donald Trump himself made promises to roll back the very regulations that are hurting American small businesses, a group that includes vape shops and manufacturers.
In fact, many vape advocates believe that it’s still possible that the current vape regulations may go under review. Dr. Scott Gottlieb is the new FDA Commissioner, and during his Senate confirmation hearing, he made it clear that he is open to learning more about vaping and how it could help former smokers. An extension of the deadline is also possible, which would help vape businesses make enough profit in order to complete the applications.
This optimism has been tempered in recent weeks, culminating in the Cole-Bishop amendment being rejected from the proposed budget, and currently all hopes are pinned on Representative Duncan Hunter’s Bill. The bill would reject the FDA’s categorization of vaping, which would ultimately undo most of the regulations placed on the industry and pave the way for more appropriate regulations in the future.
Another issue of concern is the fact that the Trump Administration is expected to restrict Chinese imports, which would seriously damage the vape industry.
American vape businesses rely on cheap Chinese labor in order to make the devices that vapers use to inhale the vape liquid. If the administration imposes heavy taxes on imports like vape pens and accessories, then the market will suffer from being overpriced and may lead to the industry disappearing from the country.
Nothing is set in stone yet, and the Trump Administration still has the chance to prove to the small businesses that make up the vape industry that it will help them preserve their livelihood. This publication will continue to update readers on the legislation that affects the vaping industry.