Taking a Look at The Smoke Free Alternatives Trade Association
October 22, 2013
Taking a Look at The Smoke Free Alternatives
By Cynthia Cabrera, SFATA Executive Director
The e-cig industry is a disruptor, turning the tobacco industry on its head,
empowering consumers and creating a
new multi-billion dollar industry. But, in the
long run who will be able to reap the windfall brought on by this nascent industry?
The World Health Organization, the Center for Disease Control and the Surgeon
General have for many years agreed that
tobacco use is harmful, and in particular, that
smoking tobacco cigarettes is very harmful in various ways. Despite the well-known dangers
of cigarette smoking and the public policy arguments in favor of reducing tobacco consumption such as lower health care costs, efforts to reduce tobacco consumption have not been as effective as one would expect over the past several decades. Reducing tobacco use is a significant benefit that has the potential to change our society for the better and an objective that the FDA and anti-smoking groups across the globe have been trying to achieve for decades.
I believe a major problem right now is that FDA and anti smoking groups seem to view vapers and the act of vaping as indistinguishable from smokers and smoking when the two are in reality very different things. Given the stigma smoking has earned, and the harm it causes, there is a strong push by FDA, various Attorney Generals, and legislators at the federal, state and local levels. These groups and individuals confuse smoking with vaping and attempt to regulate vaporizers in the exact same manner as cigarettes. This doesn’t make sense, and would be a huge mistake on many levels as it would unfairly stifle the industry, deny millions of adults an alternative to tobacco and stifle one of the most prolific segments of our economy. That’s bad news for an industry that’s largely comprised of small companies and entrepreneurially-minded individuals
The Smoke Free Alternatives Trade Association (SFATA) exists in part to help educate smaller and mid-sized companies as to what we consider to be acceptable advertising, manufacturing and marketing protocols and to serve as a powerful voice for them in our nation’s capital as well as in their own backyards where many of them are being unfairly treated as though they were tobacco companies.
At SFATA we are constantly engaging and educating regulatory officials and legislators at the federal, state and local level on behalf of our members. Our membership grows each month as more companies look to collaborate to achieve common goals and to obtain guidance and support as the industry expands and become more complicated.
To date, SFATA is the largest e-cig trade association and is comprised of sophisticated companies in the industry who are looking to work together to help protect common interests. Business owners and consumers of e-cigs and e-cig accessories can help in a variety of ways:
Become a member of SFATA. While different companies may not always agree on every initiative, as some affect others differently in the marketplace, its important to have an industry that speaks with a unified voice on the issues that everyone agrees are most important. SFATA is committed to engaging with government agencies and elected officials in an effective manner—to communicate industry messages that smaller and mid-size businesses would not normally able to convey. We employ FDA experts, as well as attorneys and staff who specialize in the areas that affect our industry and are able to be of the most help as they have a profound understanding of the regulatory, legal and business issues that are unique to the vaping community.
The way consumers and business owners talk about vaping needs to be different.
As a business owner, your message and your right to communicate it, is different than that of a consumer and that’s an important distinction. A consumer can talk about his or her vaping experience with impunity and in ways businesses cannot.
A consumer can advocate about what they see as any benefit vaporizers provide them with. Perhaps the availability of flavors keeps that consumer interested in using his or her personal vaporizing device rather than tobacco cigarettes? Perhaps he or she has cut down use of tobacco cigarettes and have saved money? Perhaps he or she feels better having switched to vaping from smoking. There are many compelling, important and amazing stories that vapers share about how vaping has changed their lives for the better. It’s important that consumers and consumer advocacy groups make those statements so that elected officials, government agencies and others unfamiliar with vaping understand consumers’ point of view.
Business owners have a responsibility to sell and advertise products as intended and governed by law. While it is fine for consumers to share their personal stories, business should never make or endorse health or smoking cessation claims. Doing so could, arguably, subject such a business to being regulated by the FDA as a tobacco product under the current state of the law.
Instead, craft your message as a business owner and focus on the economic impact this product has given you. Focus on the jobs you’ve created, the taxes you pay, the properties you rent and how you’ve assisted your community financially. Attend meetings and stay in tune with what is happening in your community. Visit the SFATA website to get more information about issues in your state. Rally your customers to attend meetings as well; have them share their stories. It’s important to engage with legislators and be part of the process as they are responsible for making decisions that affect your community and they need to hear from you.
Whatever the case is, consumer or business, advocating for an industry and the right to use new technology requires a lot of work. Consumer and businesses that engage and communicate with lawmakers have the ability to effectuate positive change. Legislators care about and listen to their constituents. Our website has tools to contact elected officials and information business owners can utilize for themselves and relay to their elected officials and communities in support of the industry.
Libertarian presidential candidate Gary Johnson’s campaign has now officially gone on the record condemning the FDA’s regulation of the vaping industry.
To date, no other candidate has weighed in on the issue.
“In the first debate, voters listened to two candidates dance around the American economy,” said Jim Wallace, national director of the Johnson-Weld campaign. “What you’ll never hear from those candidates is how the economy is being killed by excessive regulation. That just doesn’t make any sense.”
He said that he believes vaping is about to be regulated out of existence.
“The vaping industry currently counts about nine million customers, producing about $4 billion a year in annual sales,” he said, citing figures from industry sources. “With the excessive regulation recently introduced by the FDA, as many as 12,000 vaping businesses will be put out of business.”
The regulations require manufacturers to go through a costly pre-market approval process estimated to cost as much as $300,000 to $1 million per SKU. Most believe that such regulations will simply crush the industry, regulating it out of existence.
“As Gov. Gary Johnson has said, the free market and entrepreneurial spirit should be encouraged, not destroyed,” Wallace said. “Nowhere is this more obvious than the vaping industry.”
Corey Noles is the Editor in Chief of VAPE Magazine. He is also the owner of Inked Up E-Liquid Co. and Busted Knuckle Vapor Fluids. Contact him at email@example.com.
This month’s Juice Judge is coming to you in two parts. The first part is your regularly scheduled Juice Judge. This month I had two new flavors to sample and I’ve got those reviews for you below. The second part is Juice Judge favorites! I get asked a lot, what do you vape? So I reviewed the two flavors I vape on a consistently regular basis. You’ll notice that even those e-liquids didn’t get 5 stars across the board. But for me, in a daily vape type situation, flavor is key. You may not agree that they’re rad, but that’s ok. Juice Judge is my humble opinion and that’s it. So, here you go!
THE NEW E-LIQUIDS
Good Life Vapor
“Deadly Sin” 6mg
TASTE – 2 THROAT – 3 VAPE – 4
I had heard things from Good Life Vapor, so when I happened upon “Deadly Sin” I was stoked to try it out. You know how some things have lots of hype and it’s not as good as the hype, unfortunately that’s the case here. This flavor tastes kind of like a honey bun. It’s supposed to be like a graham cracker and tobacco, but I don’t get the tobacco. Maybe that’s where the flavor is degraded. I am not sure but it’s not something I’d vape regularly. The vapor production was above average and there was a solid throat hit, but the flavor was just lacking.
I am not normally a strawberry kind of lady. I don’t like to vape strawberry, but I’ll eat them! This e-liquid was good enough to eat. It’s a strawberry vanilla nutty blend. I really liked the strawberry. It wasn’t artificial tasting, it had good solid flavor and didn’t taste candy-like. It was thick, thanks to the vanilla I believe, but it all worked well together. I was thoroughly impressed with these guys. It may not be a flavor I’d personally vape all day every day, because I can see it getting too sweet for long periods of time, but I really enjoyed it. The vapor production was above average, but there was really no throat hit.
JUICE JUDGE FAVORITES!
TASTE – 4.5 THROAT – 4 VAPE – 3
So “Glazed” is my all day, every day vape. It’s a glazed donut flavor and it’s just spot on. The throat hit is perfect and gives me that kick. The taste is just out of this world. It also smells great and I get lots of compliments every day when I’m around town vaping. I get stopped all the time, “Why do you smell like donuts?”…Well it’s my vape. The flavor does vary based on what I’m vaping it out of. Currently I’m using a Cleito, which is awesome for flavor and has really kicked it up a notch. The only reason that I can’t give this a 5 for flavor is that sometimes it’s too sweet and I have to take a break from it. I guess you can have too much of a good thing! The vapor production is about average and as I mentioned before, the throat hit is pretty solid and one of the reasons I enjoy it as an all day vape.
Over the last few years that I’ve been Juice Judge, I’ve received dozens of peanut butter flavors. Most of them are crap. And I say that out of kindness. They either taste burnt or not like peanut butter. I came across “Dirty Strawberry” about 6 or 8 months ago at a random shop and fell in love. On first inhale; it’s pure peanut butter. Like peanut butter that you eat, not burnt, not gross, just pure bliss. The strawberry jelly tastes like strawberry jelly. It is seriously the best peanut butter and jelly flavor I’ve ever had and I’ve had way too many to count. I’ve tried to have flavors custom made for me with peanut butter and none of them have ever come out as great as this one. I don’t know what they use or how they do it, but Broken Bottle has figured it out. This e-liquid is my fun one. I don’t want to get tired of it so I vape it sparingly. The vapor production and throat hit are average, but that’s ok. The taste totally makes up for it.
It’s common knowledge that nicotine acts as an appetite suppressor, and now findings published in the Nicotine & Tobacco Research journal suggest that the combination of nicotine and flavorings commonly found in vapor products may prove capable of curbing appetite, satisfying cravings and could ultimately contribute to weight loss.
The findings only apply to smokers making an attempt to kick the habit, according to The Sun, which also reports that medical professionals universally discourage the promotion of vaping to non-smokers, as nicotine is habit forming and can lead to drug dependence given its highly addictive properties.
For those hardened vapers and soon-to-be ex-smokers, the published results are welcomed news, but should not serve as indisputable proof that vaping is the new weigh-loss wonder drug, as more research is necessary to determine its effectiveness in fighting obesity.
Professor Marewa Glover of Massey University in New Zealand, who took part in the study published in the journal, claims that obesity is on the fast track of eclipsing smoking as the “leading preventable cause of disease and early death.”
“If there is a chance that flavored vaping could help even a small proportion of people reduce the diabetes, cardiovascular and cancer risks associated with excess weight, the population health gains would be significant,” Glover said in a statement.
For a closer look at this story, click here for The Sun article.
I’m consistently surprised by the number of business owners I talk to, especially in this industry, who haven’t formed a business entity. A business entity is a legal entity, such as a corporation or a limited liability company (“LLC”), under which a business is operated. If you’re doing business on your own without a business entity, then you’re operating as a sole proprietorship, even if you use a trade name or “dba.” The differences here are substantial and well worth understanding.
Let’s say that you own and operate a vape shop. A customer comes in to pick up some new juice, and your giant chandelier falls on his head. Or maybe he slips, cartoon-style, on an inconveniently discarded banana peel. Or maybe he buys some hot-garbage- flavored juice and yaks so hard after the first hit that he ends up in the hospital with a torn oblique thinking that his appendix burst. Either way, something has happened, and you’re now facing a lawsuit. Business owners hate it, but the reality is that lawsuits are just a fact of life for anyone operating a business these days, and the vapor products industry is, despite the fact that it’s full of some of the world’s most laidback people, sadly no exception.
…continued from above
Now, let’s make things a little bit worse. The plaintiff wins the lawsuit, and the shop owner is looking at a substantial judgment. If the shop owner was operating as a sole proprietorship, then the plaintiff could satisfy that judgment against the shop owner himself. That means that the owner’s savings account, house, car, wages, and so forth are all theoretically at risk. If, however, there was a validly formed, properly run corporation or LLC in place, then only the assets owned by that business entity would be available to satisfy the plaintiff’s judgment. This is the single greatest advantage to forming a business entity, and it’s called “limited liability.”
Many people I talk to understand the concept of limited liability, but what they don’t always understand is that it’s not automatic. It’s not enough to just form a corporation or LLC and call it a day. You actually need to run it properly and adhere to various formalities if you want it to work for you. If you don’t, someone who sues you can “pierce the corporate veil” and go after your assets personally, meaning that you aren’t getting the single greatest benefit – limited liability – out of your business entity.
Piercing the veil, in addition to being a pretty decent name for a metal band, is a concept whereby courts disregard the corporate entity and impose liability directly on the business owner. Exactly when and where the corporate veil gets pierced depends on the state, the judge, and the facts of each case, but there are some general guidelines to keep in mind.
In general, courts are more likely to pierce the corporate veil and hold you personally liable if the corporation feels like a sham entity set up purely to shield you from liability.
…continued from above
In making this evaluation, courts look to a variety of different factors. One of the biggest factors is whether you the business owner actually treat your corporation like it’s a real, separate business. Do you have separate bank accounts for the corporation? Do you keep separate records and only pay the businesses’ bills from the corporate checking account? Or do you co-mingle your personal money in the same account as the corporation uses, paying your personal mortgage from the corporate account? It’s crucial to maintain the corporation at all times like it is truly what’s running the business, not like something that you just set up in case you get sued.
Another factor that courts look at when deciding whether to pierce the corporate veil is whether corporate formalities were followed. Did you have the right number of meetings every year?
Were minutes taken? Do you have by-laws, articles, officers, and a board of directors? Are you making the required annual payments to your state’s Secretary of State?
Have taxes been filed for the corporation? Formalities like this can seem minor, and may even feel silly in a corporation with only a few officers or shareholders, but they can be a lifesaver if you ever get sued.
At the end of the day, the point is that businesses entities can be extremely useful, but it isn’t enough to just form one using downloaded legal forms and walk away hoping for the best. It’s crucial to talk to an attorney who can advise you not only how to form the entity, but also how to operate it so that you actually get the benefit of that entity. Otherwise, you’re just crossing your fingers and hoping for a banana-peel-free floor.
In 2015, the number of fire-related deaths in Minnesota was much higher than what was witnessed over the last two years, but the state has seen a drastic reduction in fire deaths this year, and it could be due to fewer people lighting up as more of them turn to vaping.
Minnesota State Fire Marshal Bruce West says that as the colder months approach, the rate of fire-related incidents that can result in fatalities tends to spike as residents turn to heat sources that have the potential to cause great harm, like space heaters and ovens.
However, West stresses that the most common risk comes from lit cigarettes that when left unmonitored could cause fires that can grow uncontrollably, resulting in the destruction of personal property and a loss of life.
“The number one cause of fire related deaths continues to be careless smoking. The number one identified cause. So people either quitting smoking or moving to vaping, that could be one of the underlying reductions in this,” West told MPR News. “That’s something that we will definitely take a look at.”
For a more complete look at this story, click here for the MPR News article.