Here’s How the FDA’s New E-Cigarette Policy Hurts Small Businesses

A new FDA policy regarding e-cigarette sales could result in only tobacco and vape shops being able to sell these products—which would be a huge loss for convenience stores and other small businesses. Matt Cardy/Getty Images

President Donald Trump stunned the world with his election over two years ago. He was able to achieve this remarkable feat, in part, by speaking to real economic insecurities across the country. Since then, his administration has been successful at creating policies that create jobs and promote free-market principles.

Unfortunately, the Food and Drug Administration (FDA) has been one of the few, if not only, federal agencies that has taken a different approach to government regulations. This is most evident in the latest FDA policy on flavored e-cigarettes.

Subscribe to Observer’s Business Newsletter

The policy, which is going forward without using standard rule-making procedures, would prohibit convenience and grocery stores from selling flavored tobacco products, unless they build a whole separate room that is strictly 18 and over. This burdensome requirement will result in only tobacco and vape shops, which are already age restricted, being able to sell these products.

E-cigarettes are an over $3 billion industry, and the flavored products that would be affected by this policy make up 64 percent of the total amount of e-cigarettes sold. This is a huge market that is growing at a steady pace, and many local small businesses would be severely hurt if they are no longer able to sell these products.

And, the FDA has already indicated that they will prioritize enforcement of this unfair policy on convenience stores, despite data showing that tobacco shops, and especially online retailers, have a much worse track record of enforcing age restrictions on products.

So why might the FDA be targeting one type of store over another, if it’s not based on any data?

Sadly, it seems like the agency’s reasoning is simply to make enforcement easier.

E-liquids, which are used for vaping in electronic cigarettes, are offered for sale at the Smoke Depot on September 13, 2018 in Chicago, Illinois.

E-liquids, which are used for vaping in electronic cigarettes, are offered for sale at the Smoke Depot on September 13, 2018 in Chicago, Illinois. Scott Olson/Getty Images

There are 150,000 convenience stores nationwide. Whereas, there are only 10,000 vape shops in the U.S. So, convenience stores will be punished for their success—to make the FDA’s job less complicated.

Given that the new FDA policy is going to push teens into stores that have a worse record of age verification, and that the FDA is going to prioritize enforcement on convenience stores, it is likely that this policy will actually result in more teens accessing e-cigarettes.

A common sense solution to actually address teen smoking, which hasn’t been created by unelected bureaucrats, would be to update the Prevent All Cigarette Trafficking (PACT) Act of 2009 to include e-cigarettes. Currently, this legislation requires anyone who delivers tobacco products to check ID upon delivery. But e-cigarettes are not included in the law.

This oversight may contribute to the fact that nearly a third of teen’s retail purchase of e-cigarettes is online. Confusingly, the new FDA policy does not address online sales of e-cigarettes at all. Thankfully, this week Senators Dianne Feinstein (D-Calif.), John Cornyn (R-Texas) and Chris Van Hollen (D-Md.) introduced the Preventing Online Sales of E-Cigarettes to Children Act, which would update the PACT Act to address this issue.

The FDA introduced new flavored e-cigarette guidelines without going through the proper regulatory process, and with no evidence that it will cause teens to stop smoking. What is evident is that the FDA is taking a big government approach that is uncharacteristic of the Trump administration’s record, and the anti-free market “solution” will only be effective at hurting small businesses. Hopefully, Senate Majority Leader Mitch McConnell (R-Ky.) and other critical voices in the Senate will keep this in mind when the time comes to confirm a new FDA commissioner.

Matt Cordio is co-founder and president of Skills Pipeline, a technology talent solutions company, as well as the founder of Startup Milwaukee.

Here’s How the FDA’s New E-Cigarette Policy Hurts Small Businesses