Up In Smoke: How Vaping Regulations and Bans May Detriment Small Businesses

By: Nathaniel Reiff

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Once considered a healthier alternative to traditional cigarette smoking, vaping might be burning out in the United States. Recently, Massachusetts Governor Charlie Baker ordered a four-month ban on the sale of vaping products after declaring a statewide public health emergency. Governor Baker’s decision comes after 61 cases of lung disease, purportedly related to electronic cigarettes and vaping use, were reported in his state alone. According to the US Centers for Disease Control and Prevention (CDC), since September 17, there have been 530 cases of lung injuries across 38 states. The CDC has not identified any one company or vaping product as responsible for the deaths and injuries associated with the growing trend of alternative cigarette use. According to the New York Times, “Many of the illnesses have been linked to vaping mixtures with THC, the high-inducing chemical in marijuana.”

The prevalence of vaping in the United States is quite alarming. A study by the University of Michigan Ann Arbor detailed that one in four high school seniors reported vaping nicotine products in the previous 30 days. Vape usage rates are six times higher in high school students than adults. These rates, in addition to the documented health concerns, prompted Juul Labs chief executive Kevin Burns to step down, despite leading the company to market dominance: 70% of the U.S. market share.

Public entities are not the only actors taking a proactive stance against the multi-billion dollar industry. Mega retailer Walmart recently announced that “Given the growing federal, state, and local regulatory complexity and uncertainty regarding e-cigarettes, we plan to discontinue the sale of electronic nicotine delivery products.” This decision comes after other well-known companies such as Rite Aid, Costco, and Dollar General stopped selling vaping and e-cigarette supplies in their stores.

Many experts and consumer advocates argue that a federal ban on flavored e-cigarettes will have a “chilling effect” on the sales capacity of smoke shops across the United States. Additionally, convenience store owners who rely upon vaping product sales may be adversely impacted by any potential ban as well. This has pitted many business owners in the private sector against health proponents. Health proponent Michael Seilback, assistant vice president for state public policy at the American Lung Association, stated that, “it’s the absence of strong federal action by the FDA that is forcing states to have to make choices like this on how they are going to protect children and adults from the public health emergency of e-cigarettes.” However, e-cigarette store owners fear that a potential ban will only contribute to the unregulated black market for vaping products. The black market is where bootleg Vitamin E laced THC cartridges, which have caused lung illness and in some cases, death, are suspected to be sold.

With respect to a nationwide ban on vaping products by the FDA, Will Woodlee, a partner in Kleinfeld Kaplan & Becker, ascertained that the FDA would ultimately exceed its regulatory authority if such a ban were put in place. In a statement to the New York Times, Woodlee opined, “Do I think those legal challenges will use the words arbitrary and capricious? Tens — if not hundreds of times — yes . . . [W]hether this is within the (FDA’s) discretion or authority to change the compliance policy as proposed in this way is obviously going to be the question that federal district court judges, and quite possibly federal appellate court judges, will have to decide.”

The vast regulation of vaping products emulates the common battle between public policy and consumer rights. While the FDA has not proposed any such rule as of yet, it should be interesting to see how this issue will play out in the realm of agency and business law. Any decision down the line will certainly serve as a precedent for small businesses wishing to capitalize on popular trends.

Nathaniel Reiff is a third-year law student at Wake Forest University School of Law. He holds a Bachelor of Arts in Business Administration and a Master of International Business from the University of Florida. Upon graduation, he intends to practice corporate and insurance law.