It's been a bit of a rough few days here after reading through the FDA's deeming regulations. When the original proposed regulations came out two years ago we had fought hard, called our congressmen, made hundreds of thousands of comments to the FDA, yet it had such an unnoticeable effect on the final regulatory outcome. This is what the current FDA regulations means for a small e-liquid business like ours.
The industry killing regulation is the premarket review requirement. For every flavor in every nicotine level and PG/VG ratio we would need to submit a costly application. For example -
Blueberry Muffin 0mg 50/50 is one application
Blueberry Muffin 0mg 60/40 is another application
Blueberry Muffin 3mg 50/50 is another application
Each premarket review application is estimated to take over 1,500 man hours to complete. The cost associated with each application is estimated to be in the ball park of $1,000,000 (Market estimate that could end up being more). For us specifically to submit a premarket review application for each of our 34 flavors, 1,020 product combinations total, we'd be looking at around - $1,020,000,000 (one billion, twenty million dollars). We've been doing pretty good here over the last two years, but not that good.. Wait! There's good news! The FDA has created an organization to help small businesses like ours obtain approval! Oh no... it will only offer non-financial help :( This right here, is what would kill the entire e-liquid industry. E-liquid is dominated by small American businesses, not Marlboro. Though I'm sure they could afford it.
To obtain approval for an e-liquid product combination, we will need to prove that the e-liquid is good for public health & better for you than traditional smoking. Alternatively, we can also try and prove that our e-liquid is substantially equivalent to another already approved on the market (a bit easier). Each flavor combination that we have would need extensive testing so that we can determine the exact chemicals that are in the flavor & their amounts. This testing isn't just getting flavors tested for diketone content, which is expensive on it's own, it would be unrealistically expensive. Every single chemical will need to be isolated, then proven, that it's better for you than smoking. If the FDA decides that our application isn't sufficient, we would be out the one million dollars we spent to obtain approval.
That's really the big one for us and the other e-liquid manufacturers out there. Thankfully this regulation does not go into full effect until 2018, so we have two years to fight it. This is our wake up call that we need to start taking this even more seriously. If we want our industry to survive we're going to need to lobby hard.
Here are the other regulations that will be changing some things here -
- By August 2016, will need to install a verification system that verifies a new customer is at least 18 years of age or older. For those of you who have already ordered from us, you shouldn't be affected. New customers will likely need to submit their DOB & other identifying information with a third-party to verify their age. This one isn't an industry killer, but it is going to be annoying and will certainly impact our conversion rates (sales).
- In May 2017, we will no longer be able to describe our flavors as "light/medium/heavy/etc.". In June 2018, any distributors/retailers who still have flavors that have the words "light/heavy/medium" as descriptors will need to stop sales & throw out these products as they cannot be given away / used as samples.
- In June 2016, those accessing our website from California will need to agree that they are 21 years of age or older (as opposed to 18 years of age or older). This will be the same pop-up we have now, so nothing changes there. In August customers from California will need to first agree to being 21 years of age or older & if they're a first time customer they will need to verify they are at least 18 years of age or older to satisfy both state & federal age requirements.
These regulations are not industry killing, we can meet them without issue. Are they annoying? Yes. Are they going to hurt our sales? Undoubtedly. But we'll survive. And we really are sorry for any annoyance/inconvenience it might cause for new customers. We hope that our new customer sales rate isn't hurt too much.
Now, onto what we can do to fight against these regulations. Thankfully our Congress, Tobacco Control Experts, and many other big players are on our side. We are slowly changing public opinion towards vaping, and we need to continue along this path. The biggest thing we can do right now is urge our congressmen to support H.R. 2058. This bill would extend the premarket approval grandfather date to any products that are currently on the market as of 2016. We, along with everyone else out there would be safe from needing approval on anything currently being sold. As it stands, the current cut-off date for being grandfathered in is 2007. In comparison, that was the year the first iPhone was introduced.
Next, we can follow (and donate) to CASAA. I personally follow CASAA's blog here which keeps me up to date on everything. It let's me know what I can do to help keep vaping alive. Yes, I know this sounds a lot like everything we've heard in the past. It feels like despite our best efforts, just talking to our elected officials does nothing. We can't give up though, it's too important that we continue.
So what are we going to do? First, we're pledging 2% of our profit for the next year towards supporting CASAA. Second, we're going to implement donations through our website for CASAA. Our idea is to have a donation area at the bottom of our cart page and also offer our customers the ability to round up to the nearest $1 to have that money go straight to CASAA. Lastly, we're going to continue fighting with all of you to save our industry. We will continue thinking up ways that we can do more, and of course we will be discussing the implementation of CASAA donations with you prior to doing it. If you don't want us to mix advocacy with business we completely understand, but we do hope that you are able to support vaping through following CASAA on your end.
Thanks everyone for supporting us these past two years. I hope we can continue to grow TBD over the next few. We have two years to save our small businesses, but we need your help to do it.
- John Fitch
Founder of TBD Liquids