Five months after the FDA’s deeming regulations were released, there are still a lot of questions and much confusion around what they mean for retailers. Tobacco Business is taking another look at what the regulatory changes under way mean for the retail landscape.
Self-service display of those newly regulated products is also still permitted, as long as
no state or local law prohibiting them is in effect, in which case such bans will remain in effect. Also, accessories do not fall under the FDA’s purview. FDA regulatory authority now covers premium and domestic cigars, e-cigarettes and all vapor products, hookah tobacco, dissolvable nicotine products and gels, but matches, lighters, humidors, cigar cutters, ashtrays, hookah tongs and pipe tobacco pouches are not regulated.
“However, ‘components’ and ‘parts’ as defined by FDA are regulated,” cautions Tom Briant, executive director of the National Association of Tobacco Outlets (NATO). “That means traditional tobacco pipes and, in the case of vapor products, e-liquids and parts of the apparatus, such as the cartridge or tank, batteries and digital displays on tank models.”
Now for the bad news: As most in the industry are well aware, the deeming regulations place numerous hurdles in the path of manufacturers of the newly regulated products, from submitting ingredient lists and registering manufacturing facilities to undergoing one of two onerous and prohibitively expensive product approval application processes to enable products introduced to the market over the last nine years to stay on store shelves. For most retailers, the biggest impact—and it’s a significant one—of these requirements will be a dramatic reduction in the number of product available in the market. Assuming the regulations remain in effect despite the mounting legal challenges the agency faces, the field will narrow considerably over the compliance period as manufacturers who cannot afford the costly process fold their tents.
Lawsuits filed on behalf of the cigar and vapor industries argue, among other things, that the FDA neglected its required duty to consider the regulations’ impact on small businesses. The Cigar Association of America (CRA), International Premium Cigar and Pipe Retailers Association (IPCPR), and the Cigar Rights of America (CAA) teamed up on an action alleging that the agency failed to “perform an adequate cost-benefit analysis,” per the Regulatory Flexibility Act, to account for the deeming rule’s effect on small businesses. Similarly, a complaint filed by a number of vapor industry associations, including Right to be Smoke-Free Coalition, Not Blowing Smoke, AEMSA, SFATA, CASAA, AVA, EVCA, SEVIA and various state vaping associations challenged the deeming rule and the Tobacco Control Act on various constitutional and administrative grounds. [A previous legal challenge presented by vapor manufacturer Nicopure has been rolled into this action by order of a U.S. District Court for the District of Columbia judge.]
As the legal battles wage and the industry trundles toward compliance deadlines, retailers are waiting for the dust to settle and a new normal to emerge. It may be a long wait.
To read the full version of the article, check out the September/October 2016 issue of Tobacco Business. Members of the tobacco industry are eligible for a complimentary subscription to the magazine. Click here for details.