It’s 2016 and the vapor industry is synonymous with tobacco.
But not entirely.
Since the FDA officially deemed vapor to be tobacco, there has been a lot of talk about how vapor is not tobacco. While for the most part I agree, the fact of the matter is that in most instances nicotine is derived from tobacco.
I’m not here to split hairs about that today. This month we’re discussing the benefits to being part of the tobacco industry.
First and most importantly, we have not been deemed a pharmaceutical product — like nicotine replacement therapies. For anyone upset about not being able to discuss the potential benefits of switching to vapor, it’s a double-edged sword.
If you think being deemed tobacco will end this industry, being deemed a pharmaceutical product would decimate it entirely. Immediately.
Pharmaceutical products go through years of testing that costs millions — many millions — to complete.
For some added perspective, nearly every single pharmaceutical company brings in more annual revenue than the entire $4 billion vapor industry.
Tobacco = bad.
Pharmaceutical = worse.
Another benefit to the tobacco industry is that our insurance risk will change. While the cost to ensure a store or manufacturer is unlikely to decrease, there is a distinct possibility that more companies will begin writing policies.
Because vapor products never officially fit into a category, most insurance companies struggled to be able to assign risk. Having that category should create more competition in the market. Whether that results in better pricing will remain to be seen, but competition has been in need for some time.
For that same reason, I think we will see banks become more willing to loan money to small to medium sized stores and manufacturers. Currently, getting a loan in the vapor industry is quite difficult unless your annual revenue is well into seven-plus figures.
Another angle has to do with label restrictions. The tobacco industry has dealt with packaging restrictions for years. It put an end to Joe Camel and the Marlboro Man.
And it will put an end to cartoon characters on e-liquid bottles — the people who at least to an extent created this mess. Our industry did a poor job of policing such brands ourselves, and now here we are.
Last but not least, did I mention that vapor has not been classified as a pharmaceutical product?
That’s huge. HUGE.
Moving forward, let’s all take a deep breath and take a realistic look at the future. There will be dramatic changes to the landscape, but as time passes we will get a more clear picture of what is to come.