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smokesec

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So basically the only people not affected by this is people like Phillip Morris and their peers right?

Wonder if this is the result of some good old fashioned somehow not illegal lobbying?

Pretty much. You see, this new ruling requires that all of what they now consider "tobacco products" (which now includes ecig/vaporizer juice) that didn't exist prior to 2007 must submit an application to the feds for approval of their product. On the true tobacco side, this permit process costs approximately $250,000. On the ecig side, it will be approximately $1 million. And that's PER PRODUCT on both sides.

So, for example, I currently smoke OHM which I'm fairly certain did not exist prior to 2007, and I believe they offer 8 different flavors total. So they are going to need to cough up $2 million to continue production and sale of their product. They are pretty popular so they MIGHT be able to pull this off, but they also have to take into consideration that the FDA/TTB may very well classify their product as cigarette tobacco, not "pipe tobacco" as it's currently labeled. That would mean the tax rate on their product would explode which will naturally result in less sales. This is something that all small-time tobacco producers are going to have to consider.

The ecig guys are totally f*cked. A lot of these vape shops mix their own juices. Say they conservatively offer 40 different flavors with 3 different nicotine levels. They would need to come up with $120 MILLION. No Main St vape shop is going to be able to do this, obviously. I have sincere doubts that even the biggest producers of ecig/vape juice will be able to afford this. The market is just too young.

The only ones that will be able to afford this is "Big Tobacco". RJ Reynolds already controls 35% of the ecig market. How much do you think that will grow when now all of their "peon" competition has to jump through million dollar hoops? Vaping isn't going away, it's simply going into the hands of a select few... and will likely become nearly as expensive as traditional smoking. I have absolutely ZERO doubt that BT lobbyists were strongly behind this.
 

smokesec

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Your last few post here Smokesec are cutting to the heart...thanks for the post.

No problem friend.

But therein lies my fear for other mom & pop tobacco shops. With these new regulations I predict that many smaller tobacco & ejuice producers will simply shut down. This will limit the amount of products that retail outlets will be able to offer.

You see, when I had my shop it was only successful because of the variety of things I could stick on my shelves. Even though I was competing with every gas station/convenience store in my locale who began selling RYO products and ecigarettes, they still couldn't match me on variety due to floor space constraints. They couldn't just line their walls with tobacco products like I could - they had to sell soda, milk, frozen pizzas, etc.

These new restrictions are going to limit the amount of products small mom & pop shops can offer. Soon they will only be able to sell brands produced by BT - which all the gas stations & c-stores already sell to varying degrees. So really, what would be the incentive to go to your local tobacco shop anymore? Accessories? You can buy those online.

These are the issues I grappled with when I decided to close down. For a time I debated converting into a vape shop, figuring the government couldn't ever actually classify something that is clearly not tobacco as a tobacco product. I ended up not doing it at the time simply because vaping wasn't popular enough in my locale and I didn't see an immediate future in it. After this latest ruling, I'm certainly glad I didn't. I'm honestly floored that the government has classified ejuice as a tobacco product but at the same time I really shouldn't be surprised at any shenanigans our government pulls these days.
 

AmaxB

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I can relate Smokesec we are a mom & pop and all we sell is RYO. We have seen shops open and close many because they simply did not have enough $$$ going in. Like you we see the gas stations, dollar store, even the grocery stores add RYO to their shelves, but they do lack selection it is more to round their offering. How ever it effects the market share a store may get. We have enjoyed slow growth over the years and have very low overhead, But we know we are under attack by corporate and big government it may very well be a time game in the end for the small guy in this market. We have 1500 square feet ground level and only one display case for vapor product and are glad that's it. Time to think of change we are up for sale.
 

smokesec

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I just heard some interesting information. There is a small but fairly popular manufacturer of e-cig juice in my area. I won't disclose the name of the company in case my information is wrong, but I do trust the source. He told me that Big Tobacco already purchased a sizeable stake in this company before this legislation went through, and now the owners who still hold a majority share are waiting for the "big buyout".

This confirms my suspicions that Big Tobacco was strongly behind this from the get-go, and that they have already been making plans to assume control of the more popular brands.
 
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