New Beginnings for Vapor

A new administration could be good for the vapor industry.

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New Beginnings for Vapor

The United States of America saw an unprecedented presidential campaign in 2016, and now President Trump has taken office. For the vapor industry, at least, it could potentially be a brave, new world.

The vapor space, from manufacturers down to retail vape shops, has been under constant threat. In the bright, early days of the e-cig world, most people assumed that saner heads would prevail—there was no way the FDA would ultimately issue regulations that would finish the industry. But then FDA issued the final deeming regulations and for those whom the full weight and understanding of those regulations had not been entirely clear, it was suddenly and unquestionably confirmed that the situation was dire. The decision about how to move forward was one that each business had to make.

Now, with a new administration firmly in place, talk that started after the election has blossomed into full blown strategic conversations about what we can realistically look forward to with regards to changing the deeming regulations or amending the Tobacco Control Act.

While everyone in the vapor supply chain is at risk, it is understood that manufacturers are first in the line of businesses affected by the FDA’s deeming regulations, specifically because of the onerous Pre-Market Tobacco Application (PMTA) process. Relatively long-established vapor businesses have spent two or three years deciding which (legislative, business, legal) options to pursue in response to the FDA regulations.

Hometown Hero is an e-liquid manufacturer located in Austin, Texas. Interestingly, the company started in 2015, when many others were preparing to shutter their businesses or scale back significantly. I sat down with founder Lukas Gilkey to discuss the future, and how he dared to enter an industry that was fighting for its life. To follow are excerpts from that conversation:

Cotton Cloud by Hometown VaporWhy did you start your company?
Lukas Gilkey: I started Hometown Hero in early 2015 simply because I was unhappy with the products on the market in regards to quality and price. I knew I could make a better product in consistency and flavor, and hit a lower price point for consumers. The regulatory hurdles had distracted many competitors and I saw a massive opportunity to take market share while keeping a focus on what is important. By hiring dedicated specialists for our regulatory and compliance needs, we were able to address those issues while focusing on our core business value to consistently provide a better product by giving the retailers/consumers the best value possible.

Aside from the FDA deeming regulations, what else do you think is a major stumbling block for the vapor industry?
I would say our inability, as an industry, to overcome the negative press from detractors who wish nothing more than to see the e-cigarette space regulated to death, with no benefit at all to former smokers who now vape.

We are a veteran-owned company and donate a portion of our profits to Disabled American Veterans because we think it’s important to give to those in need. It should be the same for FDA or CDC. Their anti-vapor positions and ideology make it hard for us to have faith that they will come to the understanding that their policies hurt businesses—but more importantly, they hurt smokers who want to switch over to a less harmful alternative. As a former smoker, it is disheartening to see this play out, especially when the science proves vapor products are a viable harm-reduction product.

What are your goals for Hometown Hero and the vapor industry?
Focus on the big picture! The only way we will make it through the current regulatory crisis is to stand strong beside each other and work in unison. We support CASAA (Consumer Advocates for Smoke-Free Alternatives Association) and work with them closely to help secure a future for this industry and the companies currently in it. We hope others will strategically support the organization that resonates with them and collaborate with others.

New Administration, New Rules?
It says a lot about the human spirit and the drive to be an entrepreneur that a company like Hometown Hero would choose to open their doors at the height of the drama created by the issuance of the FDA deeming regulations, but it’s not just them—other companies have doubled down to fight for their dreams rather than fold up their tents and go home.
Now, with a new administration in office, it is possible that the bet placed by Hometown Hero and others could pay off. President Trump and Congress could unwind some of the regulatory burden that vapor companies are saddled with. We can entertain a future where the deeming regulations are rolled back in some fashion and replaced with something more appropriate. Whether you are a Trump supporter or not, his campaign position that U.S. businesses are being stifled by over-regulation is one that speaks to the fundamental problem the vapor industry faces. With a willingness to look at regulation based on a risk profile (rather than treating vapor products as if they were equally as dangerous as combusted cigarettes), the industry stands a chance. Reasonable and proportionate regulations, proper product standards, and a public health mandate that includes true harm reductions embody that promise of a brave, new world.

– Contributed by Cynthia Cabrera, independent consultant
at The Cating Group and former executive director of SFATA

This story first appeared in the March/April 2017 issue of Tobacco Business magazine. Members of the tobacco industry are eligible for a complimentary subscription to our magazine. Click here for details.