NEW YORK -- As the industry waits for the U.S. Food and Drug Administration (FDA) to issue its finalized deeming regulations on products like cigars and electronic cigarettes, much of the focus has been on the problematic premarket tobacco application (PMTA) requirement. Under the current proposal, companies would have six months from the completion of the deeming regs to register products and ingredients with the FDA and two years to file a PMTA.
This is especially troubling for independent e-vapor shops and manufacturers. As outlined in a Wall Street Journal article, each PMTA could cost between $2 million and $10 million (per regulatory consulting company SciLucent LLC). This money might end up being wasted, as the agency has never approved a new tobacco product.
The FDA said in a statement that it will provide small businesses time to comply with the final rules and that these regulations will help the agency “learn more about these products and ultimately ensure that newly regulated products cause no worse harm to users.”
Vape shops and manufacturers, however, are not as confident: the Smoke-Free Alternatives Trade Association (SFATA) predicts 99% of the e-vapor industry will go out of business if the regulations are enacted as written.
"We call it vapocalypse," said Daniel Walsh, chief executive of PureBacco USA LLC, a Gaylord, Mich.-based maker of a liquid nicotine called Flavorz.
Cheryl Richter, owner of Vape Den, a Port Chester, N.Y. vape shop, told the Journal about 70% of her business comes from e-liquid sales. The cost of complying with the regulations would likely cause her, and many other vape shop owners, to go under.
“It’s really a matter of just how crazy they will make it for this industry to exist,” Ms. Richter said.
Some independent players, however, see benefits to the regulations. Vapeology L.A. owner John Hartigan argued the currently unregulated environment means he has to make sure the products he sells are safe for his consumers.
“The idea that you won’t have people out there putting juice together without a chemistry background is a good thing,” he added.
There are also manufacturers who acknowledge the challenge the PMTA process presents, but are preparing themselves for a regulated environment. Walsh of PureBacco estimated the company has invested $500,000 to upgrade its manufacturing facilities and analytics equipment and Five Pawns Inc., a Irvine, California-based liquid-nicotine company, has hired multiple advisers to help in the regulatory process.
“It’s going to become very expensive to play in the game,” said Rodney Jerabek, Five Pawns chief executive. “This could mean the end for a lot of small companies.”
The American Vaping Association (AVA) released a statement applauding the Journal story, calling it “the first major U.S. newspaper to reveal the truth about the FDA's plans for ‘regulation,’ -- namely, that for the vast majority of the players in the market, the FDA's rule will result in prohibition, not regulation.”
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