Indiana Delays Controversial E-Liquid Regulations

Only 6 e-liquid manufacturers would qualify to sell in Indiana

INDIANAPOLIS -- A controversial law that could limit Indiana to as few as six e-liquid manufacturers did not go into effect July 1 as planned. According to a NATO News bulletin and a report issued by the Indiana Grocery and Convenience Store Association, the Indiana Alcohol Tobacco Commission (ATC) decided to delay implementation of the e-liquid laws by 60 days (beginning July 1, 2016). The ATC reported it made the decision in order to review the new “deeming” regulations from the U.S. Food and Drug Administration (FDA) to determine if the state law needs to be amended.

Additionally, the ATC said it will issue 120-day warning notices to retailers before the agency would take enforcement action on e-liquid sales in the state.

The regulations faced intense scrutiny after numerous well-established electronic-cigarette and e-liquid manufacturers found themselves potentially shut out of the Indiana market due to a provision in the law that requires manufacturers to get certified by an approved private security firm. The problem was, so far, only one security firm in the United States meets the strict standards laid out in the law—and that security firm has only certified six e-liquid manufacturers, prompting accusations of a monopoly within the state.

Before the ATC announcement, numerous lawmakers acknowledged the regulations were problematic. Notably, Sen. Ron Alting (R), who co-authored the vaping legislation.

“We’re going to get that thing fixed,” Alting told the Lafayette Journal & Courier. “This was supposed to be about safety in an unregulated industry, not about creating monopolies.”

John Gregg, the Democratic candidate for governor, expressed similar concerns to the Indy Star.

“Recent media reports about this apparent monopoly are more than a little disturbing," Gregg said. "While everyone supports oversight and reasonable safeguards on the industry, the legislature should re-evaluate this law and the system it created to ensure greater fairness, competition and transparency.”

Legal challenges to the law were met with mixed results. Last week, a U.S. District Court for the Southern District of Indiana judge ruled that the e-liquid law does not violate interstate commerce rules, upholding the licensing requirements. However, a lawsuit against the Indiana ATC found more success, with a different U.S. District Court for Southern Indiana judge ruling in favor of a temporary restraining order that will allow one manufacturer to file an application past the July 1 deadline.

Under the decision, Goodcat LLC., Naples, Fla., will have until July 14 to submit its application. Though the decision only applies to Goodcat, if the Indiana law is found to be pre-empted by new FDA regulations (as claimed in the lawsuit), countless other e-liquid manufacturers would be allowed to sell their products in Indiana.

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