business
California Trying to Root Out Illegal Vape Providers
The vape industry is only getting bigger, yet most of the products within it, are illegal. In a new move, California just filed suit against nine vape companies; seemingly in an effort to root out illegal providers. Will this work?
This article is the express opinion of the writer in relation to California’s new lawsuit.
California vs nine vape companies
On Friday, September 8th, California, via Attorney General Rob Bonta, filed a suit against nine different companies that Bonta says sell illegal vape products. All the products are inhalable, come from online sales platforms, and are unregulated. California does allow recreational cannabis, as per ballot measure Proposition 64 in 2016; and the state has a medical legalization since Proposition 215, in 1996.
Bonta said the nine companies targeted by the lawsuit, also violate Proposition 65; because of failure to include certain warnings on the products. This relates to delta-9, and a terpene called beta-Myrcene; both natural compounds of the cannabis plant; neither of which was ever definitively tied to reproductive harm, or developmental delays, the topics of the warnings. The suit also alleges that the companies are involved in unfair business practices.
Then Bonta went on to make a statement, that perhaps explains this California vape situation better; so long as you can read between the lines. He said, “I want to be clear: The sales of industrial hemp products that do not comply with California law, and the illegal sale of inhalable hemp in California will not be tolerated.
The dangers of these products must be communicated for sale to the public, and the sale of all industrial hemp inhalable products must cease altogether. The California Department of Justice will continue to protect the legitimate businesses who are operating responsibly in this space. There is no room for illegal inhalable hemp products in our state.”
What’s really going on here?
So, California will continue to protect its legitimate businesses, and try to root out as many illegal vape providers as possible. This suit isn’t about finding a few companies that are deviating a bit; its about trying to get rid of black market retailers. The real issue Bonta has is not fear for your health; regardless of all those warnings he wants to make sure you see. It’s fear for tax revenue, and control of the market. Black market = no government revenue.
One mistake in this, is using the concept of ‘inhalable.’ Isn’t all flower inhalable? Obviously he doesn’t mean to get rid of the flower market, right? The guy is totally cool if you want to light hemp on fire and breathe it in, which is inhalation as well. No, he’s not trying to get rid of that. He’s only talking about vaporizers, and only ones sold outside of regulation. It’s an attack on the vape market, which is known to be a hugely illicit market. So big, that the government has tried to stop it in several ways, already.
A couple years ago the federal government tried to institute a vape mail ban; which was so unpopular it fizzled out. It also greatly targeted the company Juul, even though there isn’t a death or injury suit related. How? With the line that Juul created a vape epidemic by marketing to children; a nonsensical argument on many levels. Like, 1) The idea that vapes are what introduce knowledge of tobacco to kids, is insanely short-sighted; I mean, consider Hollywood. 2) No one is solely targeting the group least likely to have their own money for products. And 3) Who cares if it keeps kids from SMOKING??
The company, and similar campaigns, are used to induce fear of kids vaping. Its not a relief that those who choose a tobacco product, are more likely to inhale vapor than smoke. Rather, a fear that this method of inhalation will somehow cause the undoing of society, despite it being an alternative to the actually death-casing smoking. It’s so beyond logic, that its scary. Nicotine gummies almost made it out last year, but the FDA squashed it; in fear your child might want one. Nevermind that they 100% eliminate the issue of inhalation.
Logic time? Last I checked, pretty much every beer can looks like a soda can. And those pink and blue opioid pills sure look like little candies. Do you think someone actively ODing will make sure the safety lock is utilized correctly? Every US government allows the sale of opioids, while concurrently collecting money from opioid settlements on behalf of their people. This is already a massive contradiction when it comes to our health and well being. But heaven forbid you switch to vaping from smoking, or swallow an edible without having read a warning about issues that were never confirmed as related.
Cigarette taxes
The UK instituted a program to get smokers to switch to vaping; starting with the likes of pregnant women. It’s still talking about all kinds of risks, but it has conceded enough to allow this to happen. What’s the stipulation? The vape has to come from the government, whether directly, or through an approved source. As in, its cool to vape, but only if its for sure a legal sale. This might look like the government being wary of its residents’ health; but if you read between the lines… its really about reining in a wildly big illicit vape industry.
Because of the fallout with big tobacco, nearly every country allows the sale of cigarettes, but puts exponentially high taxes on them. These are the same sin taxes applied to cannabis products. These taxes are high enough to often make government entities, the biggest benefactors of the cigarette industry.
Some examples? Mexico has a 70% tax rate as of 2020, per its government; in 2021 the tax rate averaged 80.4% across Europe per TaxFoundation; and the UK has had as high as 82.16% on cigarette products in 2015 according to WHO data. The US, for its part, brought in $12.9 billion in cigarette tax money in just 2019, according to taxpolicycenter.org.
Governments seem happy for people to continue smoking, as long as they pay the high cost. On the other hand, vaping created another tobacco option to standard cigarettes; and one not regulated, and therefore outside of government tax reach. Governments seem generally unhappy for their populations to take this option. Even though vaping has overall shown to be way healthier than smoking, (except in a few freak cases that deal with certain additives); we’re continually fed fear on vaping, even as it gives an alternative to smoking.
Size of illicit vape market
It’s one thing to talk about something, and another thing to measure it. So lets try to attach some numbers to all this. Remember, illicit markets don’t report to governments, so we have no official data on them, or what they bring in. Everything we have, is estimates from different governments or research organizations. And sometimes its just pieces put together, and they don’t always match. It often feels like we’re very specifically not told anything. Think of what California just did with the vape lawsuit; yet it didn’t mention this as a legal market vs illegal market issue.
According to Grand View Research, the global market for e-cigarettes and vapes in 2022, was valued at $22.45 billion; although what this includes exactly is hard to say. We do know it separates vape sales from cigarette sales. Whatever it exactly refers to, this market is expected to grow at a compound annual growth rate of 30% from 2023-2030. According to that company, it was worth about $6 billion in 2020, so its already grown greatly in the last few years.
In terms of the UK, a recent Convenience Store article, reports on a UK study. The study was run by Japanese Tobacco International (a tobacco product manufacturer, not a research agency). The group tested purchasing in the UK, and found that more than half of the 186 tested locations, sold illegal cigarette and vape products. Said Ian Howel, the company’s fiscal and regulatory affairs manager, “Unfortunately, the illegal sale of tobacco and now vapes seems to be everywhere and it’s very difficult to put the genie back in the bottle.”
This doesn’t estimate the size of the total illegal tobacco market or vape market in the country; but it indicates they’re huge. A March 2023 article from the Daily Mail, which quotes a Trading Standard (government agency) report, claims that up to 1/3 of vapes sold in the UK could be illicit.
This is in part due to calling anything that does not 100% meet regulation, as illicit. Even if its that something lacks a warning; or is slightly bigger than the regulated size; or was made legally, but sold illegally. According to Better Retailing, about 138 million disposable vapes are sold every year in the UK. If Trading Standard’s numbers are correct, it means up to 45 million are illegal products. And that could be a low estimate if over half of retailers are willing to sell illegal products.
US illicit vape market
In terms of the US, there are a million fear tactic articles about illicit vapes, but very little information released. I have two theories on this. 1) The government doesn’t actually want you to know how little control it has. If it confirms the black market is bigger than regulated markets; its saying it can’t control it. 2) The other aspect of hiding this information, is that if use numbers are very high; it means there are very few actual incidences of danger involved. By never giving numbers; this allows entities to drive fear by talking about possible danger, while never answering for the frequency/infrequency of this danger.
A June article in NBC sheds more light on the situation. According to the article, there are over 9,000 electronic nicotine devices sold in the US, which is triple what it was in 2020. Most are thought to be disposable vapes, originating from China. NBC claims these numbers come from The Associated Press. The article goes on to explain that regulators refuse as many as 99% of product applications for e-cigarette products; which means only a few of the over 9,000, are approved and regulated.
It could be a nearly 100% illegal market, as anything not approved by the FDA is illegal. As per the article, 40% of the e-cig market in 2022, was disposables. Disposables are all illegal, so at least 40% of the market is automatically illegal. Considering the lack of approvals, its still a majority black market, even outside of disposables. NBC then quotes analytical company IRI, which says the total retail value of the vape industry was $7 billion in 2022. IRI claims over 5,800 different vape products are sold, a 1500% increase from 2020. Sources are not entirely consistent; highlighting the lack of info on this topic.
However, all sources indicate a massive market, which is nearly all illicit. In fact, the US is so far behind, and so antiquated in its techniques, that it spent months of time demonizing the companies Elf Bar, Esco Bar and Breeze; even blocking their imports. Just like it did with Juul before. What did it find? Those companies only accounted for 14% of the disposables market, last year. As starting a brand is as easy as sending your information to a manufacturer, new companies can pop up overnight. Which makes US attacks like that, nearly useless.
While it obviously grapples with a problem that leaves it embarrassingly left out, the FDA makes it sound like its all going according to plan. Tobacco Director Brian King stated, “I don’t think there’s any panacea here. We follow a comprehensive approach and that involves addressing all entities across the supply chain, from manufacturers to importers to distributors to retailers.”
Conclusion
Weird, I guess its not a panacea to have a 40%+ (let’s be honest, probably over 75%) illicit vape market operating in the country. Of course, this whole thing centers around an epidemic with no real death toll, for which no one wants to give any hard numbers. If it really is everywhere, then its also proven safe enough (at least in the short term), just by the mass existence connected to so few problems. If its not everywhere, and the situation is controlled; why the argument? Either way, the California lawsuit will likely do nothing to change the illicit vape landscape; either in the state, or beyond.
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