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VAPOR
PRODUCTS
ELECTRIC
ALLEY
O
Oh, what a difference a year (and finalized deeming regu-
lations) makes. The vape shop channel—once a growing
competitive force for tobacco stores—is now reportedly
struggling and shrinking, according to industry analysts
(See "The Future of Retail," p. 80). Retailers would be
considered crazy to entertain it as a separate subsidiary
business today—or would they?
There are certainly no new reported vape shops being
launched by the tobacco outlet channel, and there is at
least one chain that was previously experimenting with
a vapor store that has since shut it down. New Castle,
Pennsylvania-based Klafter’s (d.b.a. Smoker Friendly/
Cigar Express) has turned its vape-only store into a tra-
ditional tobacco outlet, bringing the total number of out-
lets it operates to 16. While several factors contributed to
that decision, for Klafter’s it was Pennsylvania’s new 40
percent tax on vapor that confirmed it was the right call.
A Stifling Tax
Enacted on October 1, 2016, Pennsylvania’s new vapor
tax requires retailers to pay a 40 percent floor stock tax
on existing vapor inventory and a 40 percent tax on all
vapor products purchased from that date forward. “This
put many [vape] retailers out of business and is forc-
ing consumers to buy online or in other states to avoid
the ludicrous tax,” says Randy Silverman, president of
Klafter’s. He adds that there is a lot of confusion and
frustration for retailers and consumers alike—“unlike
traditional cigarettes, it has been very difficult to estab-
lish good buying and inventory management practices.”
Nevertheless, in other states, there are tobacco outlet
chains still successfully operating separate vape-only
shops, albeit with a cautiously optimistic attitude. One
of those is Rock Hill, New York-based Smokers Choice,
which has 59 tobacco outlets and three separate vape
Since the deeming regulations were finalized, you
don’t see tobacco outlets rushing to start up sister
vape shops, but there are those that are keeping
existing concepts going—with fingers crossed.
BY RENÉE COVINO
SisterVapor
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Mr. Vapor in Highland Michigan
Vapor Section in Wild Bill's, Westland Michigan