John Kreis is worried that his business could go up in a puff of smoke.
Kreis, the co-owner of the Old Port Vape shop in Portland, said efforts to regulate vaporizers or electronic cigarettes could cripple the industry, which is now dominated by small nicotine liquid manufacturers and shops like his.
Kreis said vapes, as the devices are known, are an innovative way to either allow people to continue to smoke and get nicotine into their systems, or as a way for smokers to wean themselves off traditional cigarettes. He said vapes allow smokers to do both while eliminating the tar and other harmful chemicals in traditional tobacco cigarettes.
But the devices are controversial, drawing criticism from people worried that they appeal to kids and could induce conventional smoking, and that no agency regulates the vapes’ flavored liquids, leading to speculation that they could contain harmful ingredients. The Food and Drug Administration is weighing whether to regulate vapes while the Federal Trade Commission is likely to examine how the devices are marketed. Until last week, the state of Maine was considering taxing them as tobacco products.
But to Kreis, the devices’ growing popularity is helping people break decades-long smoking habits.
“It’s really turned into quite a big movement,” said Kreis, who opened his store on Market Street in June 2014. “I couldn’t count how many people have come into my shop in Portland who said they haven’t gone a day without a cigarette in 20 years and then they come in two weeks later and said, ‘I haven’t had a cigarette since.’ This is the miracle that smokers have been looking for.”
GROWING SALES, POPULARITY
Vapes are small vaporizers that convert a liquid containing a vegetable-based glycerin, nicotine and a flavoring into vapor, which is inhaled by the smoker. The base of a vaporizer, which is about the size of a large pen, contains the heating unit and a rechargeable battery. Disposable e-cigarettes, which vapes are often compared to, are cheaper, look more like traditional cigarettes and can’t be recharged after the liquid is used up.
The industry is on the rise. Global research firm BIS Research, which tracks the e-cigarettes industry worldwide, projects the industry will grow by 22.36 percent annually, reaching $50 billion by 2025.
“Although the market is being driven on multiple promising factors such as the presence of established brands, cost-effectiveness, perceived health benefits and product customizations, there are certain pain points such as uncertain regulatory framework, increasing incidents of e-liquid poisoning and compatibility issues among others which must be addressed for the market to grow significantly,” said a BIS Research report on the industry.
This past week, regulators in Britain approved a license by a vape maker there that allows the device to be prescribed as a smoking cessation aid. And a documentary being released this year, “A Billion Lives,” presents the point of view that hundreds of millions of lives could be saved if people stopped smoking traditional cigarettes – with vapes seen as a means to that end.
Kreis said sales have doubled his “best case” projections from when he opened his shop, although he declined to provide specific sales numbers.
Lorenzo Rozzi, who owns City Center News at One City Center in Portland, also hopes to ride that wave of popularity. Rozzi said he sold out his initial supply of about 20 vapes and liquids in about two weeks last month and has been trying to contact a salesman to get resupplied since. In addition to the flavors, he said, customers like the fact that they’re inhaling vapors, rather than smoke and the chemicals that are in cigarettes.
The cost is also appealing – one rechargeable base and a liquid vial cost about $15. His customers, Rozzi said, tell him that a $5 vial of liquid flavoring provides the equivalent of smoking two packs of cigarettes, which run about $7.50 each.
Kreis concurs that the flavoring is a big draw, to the point that some of his customers use vape liquids that don’t contain nicotine for the flavor alone.
“We have coffee, tobacco, custards and creams, fruits. We can get you strawberry rhubarb pie with a graham crust finished with cream,” Kreis said.
OVERSIGHT ON THE HORIZON?
But it’s that tempting menu of flavorings that adds to critics’ charges that vapes appeal to children. They contend the flavors are intended to attract children to e-cigarettes. In April, the U.S. Centers for Disease Control and Prevention released data that showed vape usage among middle and high school students tripled between 2013 and 2014, increasing from 4.5 percent in 2013 to 13.4 percent in 2014.
Because of that, the Federal Trade Commission plans to study the industry’s marketing practices.
The other federal agency interested in vapes is the FDA, which has held hearings on whether to regulate the devices. Kreis said the market is currently wide open and unregulated – some users even concoct their own liquids for vaporizing. But if the liquids had to be put through a rigorous FDA testing and review process, most of the small manufacturers couldn’t bear the cost and would go out of business.
That in turn could open the door to large, well-financed tobacco companies entering the liquids and vape business. The concern from Kreis and other vendors is that the little guy could be squeezed out because the tobacco companies would be able to control distribution of the liquids.
Big Tobacco is already eyeing the industry. According to BIS Research, in 2014 Imperial Tobacco revealed its agreement with Reynolds American to acquire Blu Ecigs to enter the U.S. market, and tobacco monolith Japan Tobacco announced in April 2015 its intention to take over Logic Technology Development, one of the leading e-cigarettes market players based in the United States.
Also looming is the potential for taxes on the devices and the liquids. Currently, vaporizers, liquids and e-cigarettes are subject only to the state’s 5.5 percent sales tax, but some critics of the devices said they should be subject to higher taxes, like those on cigarettes.
Tobacco product taxes are considerable. Of a typical $6 pack of conventional cigarettes, about $2 is the state tax on tobacco products.
Rep. Jeff McCabe, D-Skowhegan, was backing a measure that would subject vape liquids to equivalent taxes. But he said Thursday he was withdrawing his measure, which would have been the subject of a public hearing before the Legislature’s Taxation Committee on Jan. 13. His proposal didn’t spell out exactly how a tax on vapes would be calculated.
McCabe said he thinks the jury is still out on whether vapes are helpful or hazardous, and higher taxes should wait until the federal government makes that determination. If the FDA decides to regulate the industry, he said, Maine and other states could step in with taxes.
“It doesn’t make sense to move forward at this time,” he said.
Samantha Edwards, a spokeswoman for the Maine Department of Health and Human Services, said the agency hadn’t taken a position on the tax plan before it was withdrawn and is waiting to see more research before deciding if vapes are potentially harmful, an aid to people trying to stop smoking cigarettes, or neither.
She said the state is concerned that children might be attracted to vapes because of the flavoring and it is using some of the money in the Fund for a Healthy Maine – where the state directed its share of a nationwide tobacco lawsuit settlement – into a countermarketing effort. A law banning vapes from areas where cigarettes are also banned went into effect in October, she noted.
Kreis said he believes that more research could show the vapes are much less dangerous than cigarettes and could be a way for people to stop smoking traditional cigarettes. But he wishes the activities weren’t so similar.
“You get your sense of smell back and you can climb stairs again,” he said of dropping cigarettes for vapes, but “I wish it didn’t look like smoking.”