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FDA’s E-Cigarette Regulation Is Triggering A Black Market

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Guy Bentley Research Associate, Reason Foundation

The Food and Drug Administration’s (FDA) new e-cigarette regulations, which could destroy 99 percent of the market, are triggering backlash from vaping advocates and businesses vowing to teach vapers to make their own e-liquid.

The centerpiece of the FDA regulations, published Thursday, is the requirement for all vapor products released prior to Feb. 17, 2007, (predicate date) to go through the notoriously onerous and expensive Pre-Market Tobacco Application process (PMTA).

PMTA can cost millions of dollar per product and the FDA itself admits it will take around 1,700 hours of paperwork. Almost no vape businesses will be able to withstand this regulatory onslaught. FDA analysis estimates 99 percent of products on the market won’t even be put through the process.

The American Vaping Association is calling the regulations “downright prohibition.” The regs will take effect in 90 days and businesses will have two years before having to go through the PMTA.

“With the thread of tens of thousands of vape shops potential closing their doors and most manufacturers calling it quits, the millions of people in the US that vape are stuck between giving up their vice or ‘moving underground,'” said White Clouds Vaping in a press release.

“We were expecting to see this industry move from the retail store to home-mixing, but we were surprised how quickly it happened. There are thousands of people that are about to lose their job or their business from their regulations and its sad to see how much innovation is being ‘bullied’ out of business.”

But White Clouds Vaping is ready to help vapers in the new era of prohibition. “We can teach anyone how to make any flavor of E-liquid in less than 10 minutes without stepping foot in a store!” said Zach Jacobs, the founder of White Clouds Vaping Co.

According to one of the largest surveys of vapers ever conducted, there could be a massive increase in DIY e-liquid if the FDA regs are implemented without alteration. (RELATED: FDA Could Trigger Massive E-Cig Black Market, Turn Vapers Back To Smoking)

Conducted by The Consumer Advocates for Smoke-free Alternatives Association (CASAA), the survey examined close to 20,000 vapers at the end of 2015. The participants were drawn from CASAA member in the U.S. and were representative of as many as two million e-cigarette users.

CASAA put three different scenarios of FDA regulation to participants, the first being total prohibition of e-cigarette sales; more than a fifth of those who quit smoking said they would start again under this scenario, while 50 percent of vapers who still occasionally smoke said they would smoke more.

More than 90 percent said they would turn to the black market, overseas or homemade products. Under the second scenario, all e-cigarette products would be banned with the exception of a few “closed-system cigalikes,” that will only be made with tobacco and menthol flavors and cost more than today’s versions. Cigalikes are e-cigarettes that look and feel like regular cigarettes.

More than one-fifth of vapers who’ve already quit responded they would turn back to cigarettes and the 46 percent who still smoke would increase the amount they smoke. The percentage who said they would continue to use the e-cigarettes of their choice by skating around the law breached 90 percent.

In the third and most lenient scenario, all types e-cigarette devices would still be sold legally but all e-liquid and e-cigarettes would be tobacco or menthol flavored.

Even in this more relaxed scenario, 14 percent of quitters said they would begin smoking cigarettes and more than a third of those who smoke as well as vape said they would smoke more.

Close to 90 percent of those surveyed under this scenario said they would find alternative ways to get their favorite flavor of e-cigarettes. The results highlight the importance of flavors to many vapers who have quit or reduced their cigarette consumption.

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