Vape Radio 89: PA Vape Tax Update - Interview With Chuck Huff From The Pennsylvania Vape Association

May 15, 2017

Chuck Huff, the president of the Pennsylvania Vape Association tells us the effects on the vape industry in my old home state and how it has decimated the vape industry there. Entrepreneurs that risked their hearts, souls and money have been ruined in some cases and it ain’t over yet. The worse may still be yet to come.

Last year the state of Pennsylvania approved a 40% floor tax, which is what we’ll be speaking about today.

And in my current state of California, the deal breaker just passed last year known as Prop 56 which is even worse. On top of the legal age to vape being raised to 21, we haven’t quite seen the effect, but the tidal wave is closer and growing. We’ll explore that one in future shows.

But for now, sit back and listen to the tale of PA. It’s not Halloween, but this story may scare you worse than any manufactured terror.

The free and easy days of the vape industry are behind us, and aside from the challenges of competition and negative press, we have two major foes when it comes to regulations. One is the Fed, the FDA, who lowered the hammer last August with the deeming regulations. On top of that we have 50 more enemies in our midst. They are the individual states and the challenges of dealing with some of their actions.

Starting early out of the gate was Minnesota who instituted an insane tax on nicotine. That was followed by others and one that we spoke about in detail in show # 87. The state of Indiana. They pretty much eliminated all out of state suppliers into the state, but recently that law was overturned and ruled unconstitutional by the federal Appellate court

 Links Discussed:

www.PAvape.org

What You'll Hear Today:

  • Chuck Huff is the President of the Pennsylvania Vape Association. They are affiliated with VTA and work closely with many other advocacy organizations
  • Any seller from out of state that sells to PA residents must be licensed
  • A consumer who purchases online from an unlicensed seller is considered an “unclassified importer” and required to pay the 40% tax directly to the Department of Revenue.
  • The PA Vaping Association is dedicated to education and later added on advocacy due to threatening regulation
  • The 40% “floor tax” was introduced in 2014-15, but removed. It was brought back the following year and is now law, effective June 31, 2016. The state allowed a grace period to make payment until December 31, 2016.
  • The “wholesale value” of all standing inventory is taxed, whether sold or not. Unsold products are taxed as well.
  • The state has the right to audit for misrepresented amounts.
  • The vape shops still pay a 6% sales tax BEFORE the floor tax is implemented
  • The floor tax is rarely used in any industry.
  • The tax was designed to offset budget shortfalls but may backfire due to shop closures. Some regulators have said that the tax may have been a mistake and is destroying small businesses. This creates empty storefronts and unemployment.
  • Consumers are required to pay the tax on out of state purchases, too.
  • Any seller from out of state that sells to PA residents is an “unclassified importer”.
  • There were 450 “active” vape businesses in the state before the tax went into effect. Since then over 100 stores have closed. These closures cannot be directly attributed to the tax, but it’s a serious impact. Stores continue to close…
  • Anecdotal evidence shows that some vapers have gone back to smoking…and shops have seen up to a 40% drop in sales.
  • There is a movement to overturn these laws and show that less taxes are collected rather than more.
  • Contact Chuck at chuff@pavape.org or visit www.PAvape.org
00:0000:00

Vape Radio 88: A Billion Lives interview with Aaron Biebert

April 11, 2017

Unless you’ve been under a rock for the past year you have heard about this movie called A Billion Lives.

It was the brainchild of director, Aaron Biebert, a nonsmoker, who was intrigued by this new thing he heard of called “vaping.” As he researched the market and looked into the history of vaping, some bad things surfaced. Those bad things included efforts by competitors, primarily Big Tobacco and Big Pharma, to squelch the industry.

The Big Boys were threatened by our world, and they should have been. They ignored vaping for a remarkably long time and when their market share eroded they decided to get on board. They bought Ecig companies. Some started their own. Then came the bad shit: the smear campaigns. The negative publicity. Evidence of collusion between anti vaping organizations that surprisingly, were also against us.

As Aaron filmed Billion Lives some truths became evident.

When they launched this officially last year, in New Zealand of all places, many took notice and the regulators actually started looking into the research, the science behind vaping. They’re still working on it and the hope is that they may lighten up their objections.

Finally, the movie came to the US and premiered at many vape events. It has been viewed by tens of thousands of people, both vapors and non. It has been screened for legislators and regulators behind closed doors. The hope is that it will give them pause and maybe elicit some common sense. But this is a big paradigm shift and things move slowly.

Today you’ll get the story right from the horse’s mouth so chill out and listen to this journey from idea, to execution, to launch.

Since we recorded this interview with Aaron some progress has been made. After lots of conjecture of how to get this movie in “the mainstream,” it is now available for purchase. The links to do that are in the show notes, so if you’ve not seen it, it’s worth the price of owning your own copy.

What You'll Hear Today: 

  • Billion lives reflects the number of people that are projected to die from
  • tobacco in this century
  • Their first video footage was at a vape fest and he was totally unprepared for
  • the chaos!
  • Billion Lives launched in Spring, 2016, in New Zealand
  • Some anti-vaping regulations got over turned and things may improve
  • Over 200 venues have screened the movie
  • Private screenings have been done for Congresspersons
  • No DVD release while the movie is viewed in theaters
  • They are launching on iTunes and looking to hit #1, then following with others,
  • and taking pre-orders for Blue Ray. ETA: NOW
  • The movie was made for the public and not necessarily for vapors
  • A sequel is a consideration…
  • To contact Aaron or follow: www.abillionlives.com, or follow on Twitter and
  • Facebook
00:0000:00

Vape Radio 87: Drama! Intrigue! Conspiracy! And Finally, JUSTICE In The Indiana Lawsuit

March 7, 2017

 

Lawsuits: no one wants them and if you can avoid them, it’ll be cheaper for you all the way around. But litigation is part of life and business since it follows disputes and disagreements and they are an everyday event.

In this crazy vape world, we have our share of disagreements and sticking points. The biggest one right now, the elephant in the room, is the battle against the FDA. There are currently four major suits against the FDA, initiated by some of the biggest names and players in the industry.

But the one that just plain pissed us off, the one we really, really wanted to win, was the case against the state of Indiana which was brought on by the Right to Be Smoke-Free organization.

Two years ago, a client in Indiana said there was talk about a regulation that would restrict the sale of vaping liquids from outside the state. I said that was hard to believe, but as I researched it, it turned out to be true.

I assured her it would never make it to the governor’s desk. But it did. I told her it would never be signed. But it was.

Many people were outraged and it seems that was a lot of drama, intrigue and conspiracy behind the law. Also, a lot of misinformation.

Our guest, Eric Gotting, was the attorney that took this case to the Federal appeals court and had it over turned. “The war in Indiana” is what I called it in several articles I wrote in VAPE magazine and I said, as did others, that this case is a milestone in the history of the vape industry. A victory for the state would be a very bad precedent that others would follow.

Turns out that the scales of victory tipped in our favor and justice prevailed.

I’ll leave it at that and let our guest share the saga, the story, the drama behind the War in Indiana.

What You'll Hear Today:

  • The Tobacco Control Act (TCA) of 2009 (Federal) encourages the tobacco industry to create more safe alternatives to tobacco which contradicts the Indiana law (state). That creates a contradiction…
  • TCA encouraged the industry to create better options
  • The Indiana attempted to regulate the entire supply chain, including components that come from outside the state Their justification was calling it a “public health” statute
  • States cannot control other states per the US Constitution…”Extra territory regulation” is forbidden
  • Only one security company was approved to serve liquid manufacturers, which indicates influence peddling Plaintiff’s attorneys predicted that this law would eliminate many jobs and cost business and with 90% of liquid coming from out of state it would limit consumer’s options
  • The State judge ruled against the Right to be Smoke Free plaintiffs, which forced the appeal
  • The Seventh Circuit District offers three judges and is the second most important after the Supreme Court
  • The decision was 3-0 and the Indiana ruling was deemed to be unconstitutional
  • No sales can take place YET! The current rules are still in force
  • SB1 was introduced and make eliminate the current regulations but needs to pass the Senate and the House. It may take a few months
  • Was this a “frivolous lawsuit?” Should anyone raise that issue?
  • The issue with calling vaping “smoking cessation” was discussed. Is it because vaping could be construed a “drug?”
  • The Supreme Court has a history of listening to tobacco related cases. Could this go that far? Only 1% of cases go to the Supreme Court, but it may go to a lower level court.
00:0000:00

Vape Radio 86: Understanding the Asian and Far East Vape Market (Part II)

February 23, 2017

This is part II of our interview with Keller and Heckman LLP law partner, David Ettinger, speaking to us from Shanghai. Our last show, VAPE radio #85, covered China, and this show expands into Japan, Korea, the Philippines, Malaysia, Australia, Russia and other areas as well.

It will be an eye opener since you will get a deep, deep dive into the vape market overseas. Be sure you catch our prior show to learn about China proper. See the long list of topics we covered below.

Ettinger has lived in Shanghai for 4 years and follows the market there every day.

There was so much information to cover that I asked him to keep going, so thanks for joining us on Part II.

What you’ll hear today:

  • Countries with NO specific vaping laws usually fall under the category of general consumer law. Some MAY fall under tobacco laws.
  • Some countries treat vaping (and products) under pharma guidelines or medical devices
  • Hong Kong: nicotine is officially classified as a poison. That means it must be registered and controlled. They are pharma products, but can be sold over the counter. VERY stiff fines if not registered.
  • You can hear (and see) see David’s presentation as part of the 12 hour Keller and Heckman Symposium
  • Japan: IQOS (Phillip Morris) has changed the face of smoking. It is a “heat, not burn” product (worth knowing!!), AKA leaf vaporizers (insert picture)
  • This is an easier transition from tobacco, rather than vaping
  • This product has captured 5% of the smoking market in just a few years and will submit for PMTA approval
  • Japan also has a monopoly through the Ministry of Finance and Japan Tobacco, but less than before. The Ministry has been selling shares to generate revenue, but must own 33.3%
  • South Korea: very liberal vape laws, but expensive (heavily taxed), no official and specific regulation of vaping. That may change soon.
  • Heat not burn there big, as well.
  • SE Asian (Thailand): vaping imports are banned, ditto Vietnam, but black market exists
  • Philippines, not regulated, though under investigation, and major manufacturer of vaping products
  • Australia: nicotine is a poison (like Hong Kong) and highly regulated
  • New South Wales: also illegal, must be approved by government and registered (but none are)
  • New Zealand: can import for “personal use”, but limited supply
  • Middle East: Kuwait is unregulated, ditto Bahrain.
  • Saudi Arabia, Oman, UAR: vaping banned. Importation for personal use, not advised
  • Israel: not banned, may be worth watching
  • Russia, not a tobacco product, not regulated by federal government, but may have restrictions more locally

FREE FDA mini course! Access it at: https://tinyurl.com/FDAmini.

A we wrap this up we talked about the adoption of vaping into the mainstream. There is a learning curve and it sometimes takes a long time to get over the fear of new technology.

Before we leave I want to offer you all a great opportunity. Would you like to get your product, service or message in front of our targeted vaping audience?

Vape Radio is the largest vape radio show in the world with more than 1.3 million downloads since 2014, and one of the TOP TEN business podcasts of 2015 on Podbean, beating out more than 130,000 other shows. For just $750 you get your company integrated within THREE shows and we’re looking for TWO more advertisers to fill our spots; how about you! Contact norm@vapementors.com.

Top10Podcastof2015badge.png

That’s it for show #86, so until next time, Vape On!

Are you concerned about PMTA? Do you not have a juice line and want one? Level 13 offers you a turnkey program that can get your house brand on your shelves in just a few weeks.

A podcast is a free downloadable audio show that enables you to learn while you’re on the go.  To subscribe to my podcast for free, you’ll need an app to listen to the show from.

For iPhone/iPad/iPod listeners – Grab your device of choice, hit iTunes, and find “VAPE Radio.” You can download the free Apple Podcasts App and subscribe within. Every time I produce a new episode, you’ll get it downloaded right on your iDevice.

For Android listeners – Download the Stitcher Radio app (free) and search for “VAPE Radio.”  

For podcast lovers – If you already listen to podcasts and have a favorite directory that you are listening to right now, just hit the “subscribe” button and new shows will be added as we post them.

If you don’t have a mobile device – You can always listen to the show by clicking the audio file at the top of this page.  Just bookmark us!

Review us!

Reviewme2.jpg

If you post a review we’ll send you a free digital copy of my book, Vapreneur!

00:0000:00

Vape Radio 85: Understanding the Chinese Vaping Market

February 20, 2017

Today’s show will be an eye opener since you will get a deep, deep dive into the vape market overseas, specifically China. See the long list of topics we covered below.

David Ettinger is a partner with the Keller and Heckman law firm in Washington DC, and he’s lived in Shanghai for 4 years and follows the market there every day.

There was so much information to cover that I asked him to keep going and we’d create a Part II and that’s what we did. This is part I, which speaks to the Chinese market primarily. VAPE radio show #86, which follows, expands into Japan, Korea, the Philippines, Malaysia, Australia, Russia and other areas as well.

What you’ll hear today:

  • The Shanghai office has been open since 2004; David has been there since 2012
  • His background is in FOOD law and e-cigs and vaping was a necessary next step
  • Quality control and regulations for e-cigs and vapor in China are lacking…
  • The tobacco industry in China is a monopoly, run by the STMA and China National Tobacco Company (CNTC)
  • They have complete authority to regulate production, sales, import, export, etc…
  • China will be the largest economy in the world by 2018; 6% of their revenue is from tobacco taxation
  • 350M smokers, 1 trillion cigarettes smoked annually in China
  • Each province in China (about 34) has it’s own BRAND, overseen by the CNTC
  • 7 of the top 10 brands worldwide are included in that list
  • WHAT that that monopoly controls is a big subject. Currently it does NOT include e-cigs, devices, juices, etc… They are outside their control. For now.
  • One 5 sq. mile area of Shenzhen (near Hong Kong) has 600 e-cig producers, plus others than supply components and accessories. There is NO regulation of these “factories” which may be just a garage.
  • 95% of all e-cig products are manufactured there
  • There is minimal to no quality control and some things, like paint, may contain heavy metals or contaminants
  • This lack of QC may be behind many issues here in the US, but 5 years from now it will be more regulated
  • The “definition” of tobacco in China may be expanded and include vape companies. Many will close.
  • Who is the “average” Chinese smoker? Because smoking is part of their culture, children are exposed- and start- very young. 50% of all smokers worldwide, are in China. Smoking around the dinner table is normal
  • Air quality in China is a major problem and smoking is contributing to health issues and early deaths. It is similar to US lack of regulations from the 1960s
  • Cigarettes are cheap in China, about $1.00 US
  • Most e-cigs are MADE in China, but few have been USED there. That is changing.
  • The sheer number of Chinese consumers can make them a bigger player than many large US companies.
  • Two years ago there were few vape shops in China, but they have increased and are impressive
  • Is there a market in China for American products? Listen to David’s answer, but the next two years will tell the tale.
  • CQ: Cultural Intelligence. KNOW IT and understand it.

For information on our FREE FDA mini course: 

https://tinyurl.com/FDAmini

Would you like to get your product, service or message in front of our targeted vaping audience?

Vape Radio is the largest vape radio show in the world with more than 1.3 million downloads since 2014, and one of the TOP TEN business podcasts of 2015 on Podbean, beating out more than 130,000 other shows. For just $750 you get your company integrated within THREE shows and we’re looking for TWO more advertisers to fill our spots; how about you! Contact norm@vapementors.com.

Top10Podcastof2015badge.png

That’s it for show #85, so until next time, Vape On!

Are you concerned about PMTA? Do you not have a juice line and want one? Level 13 offers you a turnkey program that can get your house brand on your shelves in just a few weeks.

A podcast is a free downloadable audio show that enables you to learn while you’re on the go.  To subscribe to my podcast for free, you’ll need an app to listen to the show from.

For iPhone/iPad/iPod listeners – Grab your device of choice, hit iTunes, and find “VAPE Radio.” You can download the free Apple Podcasts App and subscribe within. Every time I produce a new episode, you’ll get it downloaded right on your iDevice.

For Android listeners – Download the Stitcher Radio app (free) and search for “VAPE Radio.”  

For podcast lovers – If you already listen to podcasts and have a favorite directory that you are listening to right now, just hit the “subscribe” button and new shows will be added as we post them.

If you don’t have a mobile device – You can always listen to the show by clicking the audio file at the top of this page.  Just bookmark us!

Review us!

Reviewme2.jpg

If you post a review we’ll send you a free digital copy of my book, Vapreneur!

 

00:0000:00

Vape Radio 84: TPE May Indicate the Future of the Vape Industry

January 16, 2017

Today’s interview is with Jason Carignan, CMO of Kreket International, and their subsidiary, Phillips and King.

There is one vape event that stands apart from the others and that is TPE. Tobacco Plus Expo is the official name, but most call it TPE for short. The show will be held on Jan. 25-26 in Las Vegas and the good news is that it’s free to all of us in the vape space.

Here’s why I make TPE a “must attend” event and you should to.

This show is an indicator of the direction of the vaping industry. Now that tobacco and vape are considered the same per the FDA, we are brothers in name, though not in culture. Add in the fringe elements of “alternatives,” including cannabis, hookah and similar products, and the unification of these vices may show us the future.

What you’ll hear today:

  • The show has been owned my Kretek since 2009, which was founded 34 years ago, in 1982. Phillips and King is more than 100 years old
  • The show is predominantly focused on the tobacco industry but has expanded into glassware, vapor and cannabis
  • Kretek believes that vaping is here to stay, but must innovate and adapt
  • Consolidation and attrition are inevitable, along with acquisition
  • What is “alternative?” It includes cannabis, but that is becoming mainstream. Hookah is included, ditto clove cigars
  • Tommy Chong (Cheech & Chong) will be a keynote speaker at TPE
  • The last election in November may have been the Tipping Point regarding legalization of pot
  • We will see consolidation of smoke, vape and head shops in the future
  • Glassware is a big seller!
  • Phillips & King carries about 25,000 different SKUs
  • The TPE show is at the Las Vegas Convention Center and includes four separate “kingdoms” of tobacco, vape, alternative, and general merchandise with lounges in all
  • All retailers are welcome to attend and they expect 250 exhibitors
  • Education will be offered in the mornings from 8:00-11:00
  • www.tobaccoplusexpo.com
  • The show is free, but not on site!

Would you like to get your product, service or message in front of our targeted vaping audience?

Vape Radio is the largest vape radio show in the world with more than 1.3 million downloads since 2014, and one of the TOP TEN business podcasts of 2015 on Podbean, beating out more than 130,000 other shows. For just $750 you get your company integrated within THREE shows and we’re looking for TWO more advertisers to fill our spots; how about you! Contact norm@vapementors.com.

Top10Podcastof2015badge.png

 

Are you concerned about PMTA? Do you not have a juice line and want one? Level 13 offers you a turnkey program that can get your house brand on your shelves in just a few weeks.

A podcast is a free downloadable audio show that enables you to learn while you’re on the go.  To subscribe to my podcast for free, you’ll need an app to listen to the show from.

For iPhone/iPad/iPod listeners – Grab your device of choice, hit iTunes, and find “VAPE Radio.” You can download the free Apple Podcasts App and subscribe within. Every time I produce a new episode, you’ll get it downloaded right on your iDevice.

For Android listeners – Download the Stitcher Radio app (free) and search for “VAPE Radio.”  

For podcast lovers – If you already listen to podcasts and have a favorite directory that you are listening to right now, just hit the “subscribe” button and new shows will be added as we post them.

If you don’t have a mobile device – You can always listen to the show by clicking the audio file at the top of this page.  Just bookmark us!

Review us!

Reviewme2.jpg

If you post a review we’ll send you a free digital copy of my book, Vapreneur!

 

00:0000:00