Governor Cuomo and Mayor de Blasio are confident that they are doing the right thing by banning e-cigarette flavors. At least one major business enterprise appreciates their enthusiasm. The mayor and governor might additionally be surprised to know that the appreciative business enterprise is none other than Big Tobacco.
Political leaders, public health officials, and the general public have a superficial understanding of the vapor industry. Based on a superficial assumption, an e-cig flavor ban should hinder Big Tobacco. But that is not the case. Big Tobacco does not sell flavors. Very few Big Tobacco e-cigarette products will be touched by a ban of e-cigarette flavors. In fact, as New York vape shops are forced out of business, the Big Tobacco e-cig products sold in corner stores and gas stations will not be affected. In fact, they will be the big winners.
There are two main catalysts that drove New York’s e-cig flavor bans. The first was an outbreak of lung illness that was first attributed to vaping e-cigs but the CDC has since clarified that the illness is related to black market THC oil. While there are vaporizer pens for different types of material, it was the illicit THC and not the hardware or nicotine vapes that were responsible.
The other cause for concern over vaping is the increase in underage experimentation from 11% in 2017 to 28% in 2019. The CDC found that over six million middle and high school students had used an e-cig in the last 30-days. New York’s vape flavor bans mirrored similar bans in other states. Many politicians cited the bans as fighting back against Big Tobacco. But that claim does not hold up to scrutiny.
Overview Of What The E-cig Industry Is
To understand why Big Tobacco benefits from e-cig flavor bans, you have to understand what the e-cig industry is and who sells what. The industry began as a grassroots entrepreneurial enterprise led by everyday Americans. There were no big monied interests. Most of the e-cig business was driven by former smokers who themselves had discovered vaping as an alternative to smoking cigarettes.
In the early days when vaping started catching on, the monied interests tried to kill it before it got started. As those efforts failed and it became apparent that vaping was catching on and not going anywhere. Big Tobacco started to get involved by buying up the larger independent e-cig companies like Green Smoke and Blu Cigs. Meanwhile, the American vaping community was moving on to mods and flavored vape juice. The e-cig industry diverged.
- Big Tobacco – sells e-cigarettes in retail stores. Big Tobacco e-cigs like Vuse, Blu, or JUUL tend to sell primarily tobacco and menthol flavors with a very high salt nicotine content.
- Vape Shops – the majority of vape shops are one-owner, independently-owned businesses. The primary products sold are imported vape mods, subohm tanks, and flavored vape juice.
- Independent American Vape Companies – While a few independent American e-cig companies have survived to this day, the majority of independent American companies make flavored vape juice, which is then sold online or in vape shops.
The FDA collected data from 70,000 vapers who made it clear the e-cig flavors are crucial to refraining from using traditional tobacco cigarettes. The vape shops and independent American companies specialize in flavors for adults. Kids aren’t buying the specialty vape mods and tanks. Kids are buying the high nicotine devices sold at the corner store. Vape and flavor bans compromises and destroys vape shops as well as independent American companies. Conversely, flavor bans leave Big Tobacco unscathed.
Online Vape Sales
Online vape sales are the most secure means of verifying legal age to purchase. The Truth Initiative, a well-funded anti-vaping group, has found that only 6% of underage users accessed JUUL vapor products online. The reason is simple. Responsible companies utilize state of the art age verification technology to vet online sales. A fake ID cannot fool age verification technology.
Nonetheless, the New York ban adversely affects New York’s online vape retailers as well. There is a push from federal legislators to outright ban online sales, which would instantly eliminate the most secure age verified transactions. The lack of understanding of what the vapor industry is and how it works is leading to bad policy. And that is leading to a win for Big Tobacco while vape shop owners are sent to the unemployment line.
New York Vape Shops Closing
How many New York vape shops will be forced to close their doors because of New York’s flavor bans? Only time will tell. The carnage is ongoing. The first shops closed in September soon after the ban was announced. Both locations of Clouds Over vape shops shut down. Clouds Over customer Joel Keen said “I like blueberry. Just because I am over 18 doesn’t mean I don’t like flavors. I don’t know, it’s just really disappointing.”
As the vape shops go, so do the independent American e-juice companies. As time moves forward, any adult who would rather vape than smoke will be left with the option of a salt nicotine pod vape courtesy of Big Tobacco. The Big Tobacco brands were never really in the business of flavors. They sell nicotine. Big Tobacco e-cigs were designed to be sold in retail spaces. As a result, Big Tobacco limits its high nicotine devices to a few SKUs that can be readily displayed next to their cigarettes.
Conversely, vape shops rely almost entirely on variety. A vape shop dedicates the majority of its space to offering flavor options for adults. Flavors are the vape shop business model. Vape shops will have a very difficult time trying to survive. And whether adult vapers default to a retail e-cig or back to cigarettes, Big Tobacco wins either way.