Future of U.S. E-Cigarette and Vaping Industry in Jeopardy

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Future of E-Cigarette and Vaping in U.S. in Jeopardy

The vaping category, which once was viewed as a viable new product category for retailers in the tobacco sector, is under increased pressure and scrutiny after nearly 530 people have suffered from the mysterious vaping-related lung illness. Eight people have died from this illness, the most recent being a male from Missouri. A cause for this illness has been under investigation and associated with THC oil, nicotine, Vitamin E additives [read more here], but the ultimate cause has yet to be determined. While the cause of the vaping-related illness is under investigation, federal and state governments, along with retailers, are already reacting and making their own decisions on how to handle the situation.

Viacom, CNN and CBS have all announced that they will stop airing e-cigarette advertisements in response to the recent rise of illnesses. Several politicians have also returned donations made by JUUL Labs, the manufacturer of the most popular e-cigarette in the U.S., including Nevada Democrat Sen. Catherine Cortez Masto and Illinois’ attorney general Kwame Raoul.

On Friday, Sept. 20, 2019, Walmart made the announcement that it would stop selling e-cigarettes in the U.S. This takes the war being raged against vaping to an entirely new level. Walmart said its decision was influenced by “the growing federal, state and local regulatory complexity and uncertainty regarding e-cigarettes.” The company says he it sell its current inventory of e-cigarettes until it’s sold out completely, with some estimating that it could take the company until January 2020 to go through its current stock. It will continue selling traditional tobacco products like cigarettes, with some advocates pushing for the company to also remove these products from their stores in the interest of public health.

According to a report from The New York Times, vaping products account for only a small portion of Walmart’s overall revenue and those that do buy these products tend to be younger. They also are more loyal customers who frequently shop at Walmart and buy other products, meaning the company could potentially see some negative affects from their decision to remove vapor and e-cigarettes from their stores. Walmart is just the most recent retailer to ban these products. Earlier this year, Rite Aid, one of the largest pharmacy chains in the U.S., announced that it would stop selling vaping products in its stores [read more here], Dollar General pulled these products from their stores in August, and Costco removed all e-cigarettes from its stores in early September 2019.

The Trump Administration announced weeks ago that it was considering a national e-cigarette flavor ban and that it expected the U.S. Food and Drug Administration to come forward with some additional guidance within a month to address the rising numbers of people affected by the vaping-related lung illness [read more here]. Sens. Mitt Romey (R-Utah) and Jeff Merkley (D-Ore.) are taking on the issue of teen vaping with the introduction of a new bill they introduced last week that would not only ban flavored e-cigarettes but also apply the same taxes cigarette products have to pay to e-cigarette and vaping devices. Called the Ending New Nicotine Dependencies Act (ENND), if passed, all e-cigarette flavors other than tobacco would be banned and e-cigarette devices would have to meet certain design standards. Cigarette taxes would also be applied to e-cigarettes and the Department of Health and Human Services would be tasked with educating the public about the adverse health affects of using e-cigarette products.

Some states are not waiting for the federal government to act. Michigan led the way by passing a ban of flavored e-cigarette products in its state, followed by New York State, which has given retailers just weeks to clear out their flavored e-cigarette products before a 90-day ban begins on Oct. 4, 2019 [read more here]. Illinois lawmakers will reportedly consider their own ban of flavored e-cigarettes and vaping products that if passed will only allow menthol-flavored products to be sold in the state. The bill is being sponsored by Democrat Re. Deb Conroy and Republic state Rep. Grant Wehril is seeking an exception for mint, wintergreen and menthol flavors. In California, Gov. Gavin Newsom voiced his support for a flavor ban but indicated such a bill would be considered next year at the earliest [read more here].

With so many of these recent vaping illness cases impacting minors and teens, the future of e-cigarettes and vaping appear to be in question with many manufacturers, retailers and other businesses operating in the category now in jeopardy of losing out to public–and government–pressure.