TOB Magazine

anyone lucky enough to get an FDA premarket tobac-

co application (PMTA) through,” acknowledges Ham-

mel. “That’s what is so ironic about the situation. We

early guys felt like this was a viable alternative for tobac-

co that we could be passionate about and not it will end

up being right back to Big Tobacco, which is what we

were so passionately steering people away from.”

Even if shops do opt to carry products made by the

companies best equipped to navigate the PMTA process

(i.e. Big Tobacco), the limited assortment likely to be

available probably won’t stock a vapor-only shop suffi-

ciently, noted Justin Wiesehan, VP of marketing at Mis-

tic Electronic Cigarettes. “Can you really justify keeping

a 1,500-square-foot store open to sell three brands?”

A HYBRID SOLUTION

Ultimately, the consolidation Herzog and others see

ahead spells opportunity for other retail channels that

sell vapor products, primarily c-stores and tobacco out-

lets, as vapor store customers seek alternatives to the sup-

pliers. “If you talk to distributors, they’re already seeing

it,” says John Wiesehan. “Retail has transitioned to a

hybrid model where selling tobacco, smoke and vape is

more prevalent than vape-only stores.”

The upshot? Vape shops that want to survive will

move into other categories of merchandise, such as tra-

ditional cigarettes or cannabis accessories, such as pipes

and CBD. “Some of them are starting to look at other

things,” says Bour. “The gateway to [cannabis] is CBD.

A fair number of vape shops are carrying CBD, which

will make for an easy transition to cannabis if and when

the time does come.”

Meanwhile, tobacco outlets and c-stores can capitalize

on the vapor store closures by expanding their selection

of vapor products. “That’s one of the reasons we started

working with Cosmic Fog,” notes John Wiesehan, who

noted that the partnership couples Mistic’s strength in

the mass-market retail channel with Cosmic Fog’s brand

recognition among vapers. “The idea behind our part-

nership with Cosmic Fog is to give the vape shop con-

sumer a recognizable brand that they’re used to seeing

on a mass retailer’s shelves.”

“Five years

down the road,

you’ll walk into

a store the size

of a Walgreens

and that’s where

you’ll go for your

vice of choice—

alcohol, tobacco,

CBD, cannabis.

Everything

will be highly

taxed, but the

store will be run

professionally.”

—NORM BOUR,

VAPEMENTORS

As opposed to broadened assortments, another pos-

sibility is that specialty stores will emerge. These may

be super vapor shops that emphasize service levels

that c-stores and tobacco shops can’t emulate. “Con-

sumer education is important in the vapor category

and it’s something the vapor channel has done very

well,” says David Bishop, managing partner of Balvor

LLC. “At a time when mixing stations may be going

away, offering that level of service may be the way

those stores can survive.”

Branded shops, akin to a Nike or Apple store, are

another possibility, noted Herzog, who pointed out that

Philip Morris used iQOS flagship stores to introduce its

heat-not-burn product to European consumers. “There

is a possibility that there will be freestanding iQOS stores

in the U.S.,” she notes. “They look like mini Apple Stores

and they’re fascinating in the engagement and education

of consumers.”

Of course, the fear is that rather than compromise

on what they really want—the products they’ve come

to enjoy—those consumers will turn to illicit sources

and a black market will emerge. Instructions on mixing

your own liquid and rigging up your own device are all

over the Internet, so it’s not a huge leap to imagine va-

pers finding ways to access or reproduce their preferred

product or a facsimile of it. The prospect of regulations

fostering a black market or DIY activity that will, if any-

thing, make vaping more risky is one of the many rea-

sons many see the deeming regulations as overly onerous

and dangerous to consumers.

But while there may initially be a period of illicit ac-

tivity, most in the industry say that the legal marketplace

will prevail over time.

As Justin Wiesehan notes, “Ultimately, price and con-

venience will win in this industry just like it does in every

other industry. If people can go to a zzzc-store or any

other store and get their a product that satisfies them for

a reasonable price, they will do that.”

“There is a

possibility that

there will be

freestanding

iQOS stores in

the U.S. They

look like mini

Apple Stores.”

—BONNIE HERZOG,

WELLS FARGO

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