When New York City last December passed strict regulations on the electronic-cigarette industry, effectively prohibiting use anywhere smoking is banned, one of the biggest arguments from proponents was that the city needed to regulate the industry because of the lack of federal oversight. Many other state and local legislatures have since used similar logic in their rush to regulate the industry.
Rational thinking dictates that the recent announcement of proposed deeming regulations by the U.S. Food and Drug Administration (FDA) should result in a slowing down of these local measures. Right?
As many in the electronic-cigarette industry can tell you, we are not always operating in a rational world. Thomas Briant, executive director of the Minneapolis-based National Association of Tobacco Outlets (NATO), reports his organization this year has responded to a plethora of local e-cig ordinances spanning 17 states.
“The pace of local regulatory activity is already increasing,” says Jim Calvin, president of the New York Association of Convenience Stores (NYACS). “Public health advocates dismiss the FDA as toothless and too slow, and are demanding action now. They’re wrong, but the message appeals to crusading local officials who are trying to make names for themselves politically.”
That’s not only to the detriment of those in the vaping game, but also the public at large. In an industry largely opposed to federal intervention, vaping advocates push a role reversal: Give the Feds a chance.
“It does a great disservice to the public to have a lot of city councils not take a complete view of these products, making a rational decision based on science and not an emotional decision based on what they think the product is,” says Thomas Kiklas, CFO of the Tobacco Vapor Electronic Cigarette Association (TVECA), which represents vapor manufacturers and distributors.
As disruptive as these local regulations can be to a c-store operator’s business, it’s often independent vape shops and lounges that are the most outspoken against state and city proposals.
As the senior category manager of tobacco and other tobacco products (OTP) for Framingham, Mass.-based Cumberland Farms, Anne Flint is all too familiar with the havoc vaping measures can wreak, as well as why it’s more challenging for c-store retailers to participate in the process. Flint is managing a robust tobacco category, not a vape shop. And while most vaping retailers are single-store operations, Cumberland Farms operates 600 locations spanning multiple states, making it significantly more challenging to monitor and manage state and local policy issues.
“We can’t have the singular focus on e-cigarettes like a vaping shop might,” she says. “For us, e-cigarettes are clearly an important and growing category. But for them, that’s their entire business at stake.”
Despite the challenges, Flint and others believe it’s more important than ever for retailers to make sure their voices are heard on these issues, especially with well-funded anti-tobacco organizations making a loud, compelling, emotional campaign that e-cigarettes are the next coming of the big bad tobacco wolf.
“We need to meet that challenge,” says Flint. “Just like they say all politics is local, at the end of the day, each of our stores and our customers are part of their own local community. That’s an important story to tell, but nobody else is going to go out and tell it for you.”
To help retailers make that commitment, Flint and other local legislative warriors have offered to walk us through the process, and highlight what resources are out there to help.
CONTINUED: Step One: The Proposal
Step One: The Proposal
The first simple step in fighting the local battle is awareness of local proposals. With centralized databases at the state level, it is easier to keep tabs on what’s going on. That’s not so on the local stage.
“It’s very much a patchwork system, and trying to keep tabs on it can really test our capabilities,” says Flint, pointing out that many larger manufacturers have been helpful in tracking local activities. “[Retailers] can use all the help we can get on that front. We can’t get involved on an issue if we don’t know about it.”
This awareness is all the more crucial when you factor in how little time merchants have to put together their case.
“We have months when it comes to the states; when it comes to cities, it’s about 6 minutes,” Kiklas says. “We often have no time at all.”
Both Flint and Briant echo Kiklas’ estimate, saying they typically learn of proposed legislative action one or two weeks before a hearing, though sometimes they have less than 24 hours’ notice or—worst case—they learn of anti-vaping legislation after it has been passed.
“The local boards of health seem to have wide discretion in how they conduct these hearings and notify stakeholders,” says Flint. “There’s no standard procedure that we’ve been able to identify.”
Briant says this underscores the need for collaboration between retailers, manufacturers and associations such as NATO and NACS. “This is why it is so important for retailers to reach out to NATO or their state retail trade associations as soon as they hear about an e-cigarette ordinance being proposed,” he says.
This is true even if it’s a proposal that on first glance does not seem detrimental to a retailer’s business. The most prominent legislation so far has focused on banning sales to minors or restricting e-cig use in public spaces. Though these bans may not initially affect c-store sales, Kiklas says they may raise doubts about the segment in the minds of consumers.
Briant agrees, citing that “some of the restrictions, such as banning the use of the products in public places, have created a significant amount of debate since e-cigarettes offer an alternative to combustible tobacco products.”
Flint, who operates in the legislative hotbed of Massachusetts, has observed “new twists” on legislative focus that, if passed, could have a significant effect on e-cigarette retailers.
“Something like a flavor ban restricts the category in a big way,” she says. “From a basic business standpoint, profits suffer whenever adult customers are driven to shop online or at a competitor’s store in an adjacent town, where availability or varieties are not affected by those draconian measures. All of a sudden, we’ve lost not just their e-cigarette business but maybe their ancillary food, drink and fuel purchases, too.”
CONTINUED: Step Two: A Solid Defense
Step Two: A Solid Defense
Because local measures tend to focus on the same issues (age bans, public usage, flavors or pricing limitations), veterans such as Flint can put together testimony in a matter of hours. For retailers less familiar with the process, there are a number of resources out there to help.
NYACS’ Calvin encourages operators to reach out to local retail organizations who can assist by “providing analysis and talking points, and advising them who to contact and how.” Flint says Cumberland Farms will often review written comments from both NATO and the New England Convenience Store Association (NECSA) when preparing for a hearing.
Vaping manufacturers and wholesale distributors serve as “natural allies,” Calvin says. That includes not just tobacco and e-cig companies such as NJOY, Logic or Lorillard, but also manufacturer-driven groups such as Kiklas’ TVECA (who, along with NJOY, successfully blocked the FDA’s attempt to ban e-cigarettes as unapproved medicinal devices) and the Smoke-Free Alternatives Trade Association (SFATA) or consumer-driven groups such as the Consumer Advocates for Smoke-free Alternatives Association (CASAA).
Besides providing retailers with calls to action on various local initiatives, sample letters and testimony opposing anti-e-cig initiations and scientific and legislative facts, these organizations will often get involved themselves. When a retailer informs TVECA about proposed legislation, Kiklas says the association will either send someone in person to the hearing or, if in-person testimony isn’t possible, contact the city manager or mayor to discuss the issue.
But what actually works in dissuading local governments from passing these laws? Two paths, says Kiklas: “The science, and what local legislatures legally can and can’t do.”
Legally, a state or city cannot ban e-cigarettes outright. It can tax them, restrict usage and even limit the sale of flavors. But because electronic cigarettes are a legal product, they cannot be banned. The science is a bit trickier due to the lack of conclusive, years-long research, despite a growing mainstream belief that e-vaping is less harmful than combustible products.
But perhaps the most important defense a c-store operator can present is the perspective of business owners.
“It is extremely important for local retailers to be involved in opposing these restrictions,” says Briant, “because city council members and town boards want to hear from local businesses about the impact of proposed restrictions.”
That’s especially true when it comes from responsible retailers who voluntarily age-restrict e-cigarettes and have a history of FDA compliance.
“We’re the good guys; we aren’t out to cut corners,” says Flint. “I think when you advocate for yourself in that context, it can be a compelling perspective and it helps dispel some myths about the convenience store industry that can really hurt when it comes to policymaking.”
CONTINUED: Step Three: The Hearing
Step Three: The Hearing
The actual legislative process is far from glamorous. Whether at a public forum, city council meeting or specific hearing on the proposal, retailers should prepare for a wait.
Sometimes, Flint says, it’s possible to schedule when you’ll speak at such hearings. But most often, interested parties speak in the order in which they arrive and are given a finite amount of time (usually less than 5 minutes), without the opportunity for rebuttal.
“That makes it hard because we can’t respond to some of the more questionable things that are said afterward,” Flint continues. “We have to try to anticipate what attacks are coming and to diffuse them ahead of time.”
Along with other retailers (including chain and independent c-store operators, and tobacco and vaping-shop owners), it is common to see retail associations, manufacturers and even everyday citizens testifying against e-cigarette regulations.
The other side can include everyone from fearful parents to law enforcement agencies or local representatives looking to make a name for themselves. At least in Massachusetts, Flint says, there’s a group of “regular suspects,” doctors and people affiliated with the Massachusetts Municipal Association who make it their business to attend each and every hearing.
“They make the case that tobacco and e-cigarettes are being used by minors, particularly high school students, and that these proposed regulations will fix that problem,” she says. “We don’t think the actual data they cite supports the claims they are making, but it’s difficult to counter an emotional argument, even when the facts are on your side.”
Depending on the scope, retailers can also expect to encounter what Calvin describes as “the usual contingent of antitobacco groups” such as the American Lung Association, the American Cancer Society or local chapters of Tobacco-Free Kids.
“Who knows what’s in that water vapor?” Calvin says of the case these groups make. “Kids who otherwise wouldn’t smoke will be mesmerized into vaping by flavors and manipulative marketing. It’s a big conspiracy. We’re all gonna die.”
When dealing with this kind of fear-mongering, it’s not surprising that the hearings can take a personal turn.
“On both sides of the issue, when people feel strongly enough to show up at a hearing, sometimes emotions run high,” Flint says. There have been occasions where Cumberland and other retailers have been attacked, she says. “A proponent took exception to what we were saying and tried to paint it into a good-vs.-evil, profit-vs.-people type of issue.”
Sitting through hours of local ordinances only to be personally and emotionally attacked might not sound like the most appealing way to spend one’s time. But Calvin says the high-running (and often irrational) emotions surrounding the vaping debate make it all the more crucial for levelheaded retailers to stay involved.
“It can feel awkward being visible in the local community advocating for preservation of an age-restricted product widely viewed as politically incorrect, especially when anti-tobacco wackos try to portray you as a merchant of death or a shill for Big Tobacco,” he says. “But nobody else is going to stand up for your right to responsibly sell legal products to adult customers in accordance with state and local regulations.”
CONTINUED: Step Three: The Fallout
Step Three: The Fallout
Sometimes the hard work pays off.
“We have been more successful when the board members have taken a step back and said, ‘Yes, the intent is good’—to keep products away from minors—but are these regulations really going to achieve that?” says Flint. “That’s when we have the most success in blocking or at least scaling back these proposals.”
Briant cites the rescinding of a Watauga, Texas, measure to ban e-cigarette sales; the permanent on-hold status of a Morton Grove, Ill., attempt to tax; and the revision of a Scotts Valley, Calif., bill to restrict e-cigarette advertising as just a few examples of the good that can come from retailers’ involvement.
Kiklas agrees. “I’ve been very impressed that, when people look at the products and listen to us, they don’t ban the product,” he says, recalling how TVECA successfully convinced former California Gov. Arnold Schwarzenegger to veto a bill that would have banned e-cig sales within the state.
But rational thinking doesn’t always reign supreme, especially when it comes to tobacco. “Sometimes the public hearing feels very pro forma, like the result is already determined,” Flint says. “It’s unfortunate, because you’d like to think public health professionals would take a more fact-driven approach to their policymaking decisions. Emotion and rhetoric sometimes win the day.”
And that can have big consequences for retailers. “The remarkable growth in sales and margin dollars that the vaping category has produced so far, and the potential for this to continue, make it vital for retailers to engage in regulation of e-cigarettes and related products,” says Calvin. Because the segment isn’t yet taxed, it’s the only tobacco product that offers “a level playing field” against untaxed tribal stores or lower-taxed states. “If you want that to continue, you’d better get involved, because there are legislators at every level of government salivating to start taxing the daylights out of e-cigarettes and liquid nicotine.”
Though minimum purchasing ages, usage bans and advertising restrictions are currently more en vogue than taxes, these “smaller” measures can equally complicate a retailer’s business. “Even with the less controversial requirements, there are serious operational and logistical challenges when local laws become so disparate and inconsistent,” Flint says. “Compliance is always a priority, but now that means devoting significant resources to keep track of hundreds of different local product and signage rules—instead of a few state requirements or a uniform federal standard.
“Each new layer of regulation means a bigger and more complicated compliance burden,” she continues. “Basically, if policymakers are talking about our business, we should be talking to them. Nobody knows our business better than us, which means we can lend an authoritative voice to the debate.”
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.