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Business Feature

A cloud of uncertainty

1/1/2020

EDITOR’S NOTE: After this story went to press, President Donald Trump signed a bill that raises the federal legal age for purchasing tobacco from 18 to 21. Beginning in the summer of 2020, it will be a violation of federal law to sell tobacco products to anyone under the age of 21. This change includes e-cigarettes and vaping cartridges, as well as traditional tobacco products like cigarettes and cigars. Read on to learn about the business of vaping and how the changes affect local businesses.

6 things to know about the business of vaping

Anthony Fackler, the store manager at
Central Iowa Vapors’ West Des Moines
location on Ashworth Road, smokes his vape.
Photo by Melissa Walker

 

Michael Johnson was drawn to the allure of vaping from the time he learned about it as a way some of his friends had stopped smoking.

Johnson, who lives in Adel, had smoked cigarettes for about 11 years when he started vaping three years ago. He says he switched to vaping and was able to give up cigarette smoking altogether.

Johnson is one of thousands who have switched from smoking cigarettes to vaping, according to reports for state departments of public health and the Centers for Disease Control and Prevention.

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Vaping has been covered in the media, in the statehouse, in the schools and around the dinner table. But there is still much to learn about it, and it starts with understanding how the business model works.

What is vaping?

Vapor products, according to Iowa law, are any noncombustible product that may or may not contain nicotine that use a heating element or other means to produce vapor from a solution or other substance. They fall within the same realm, according to the Iowa Department of Public Health, as e-cigarettes, hookah pens, e-pipes, electronic nicotine delivery systems and electronic smoking devices.

The products allow users to inhale, or vape, aerosolized liquid, called e-juice. Some of these contain nicotine, which the health department says is the addictive drug in regular cigarettes, cigars and other tobacco products. Many vapes contain flavorings and other chemicals that make it an aerosol that users then inhale into their lungs.

Bystanders can also breathe in the aerosol when a user exhales it into the air, according to the health department.

While Johnson has quit smoking cigarettes, he says it’s a mix with his friends. Some have quit cigarettes and only vape, while others started vaping and quit to start smoking again.

Halfhill shows different types of vapes that are available to users. Photo by Melissa Walker.

Corey Halfhill, owner of Central Iowa Vapors, began vaping after his wife, whom he describes as a closet smoker, was introduced to it. He socially smoked cigars when he played cards or had a drink but discovered the flavor of a vape was better than smoking.

“And you don’t stink either,” he says. “Not walking out of the setting where you’ve got a smoke-filled room is nice, as is not feeling like you have to go home and take a shower or wash your clothes before you go to bed.”

Halfhill says his wife felt better after she quit smoking. She no longer coughed or hacked.

Halfhill now owns 11 locations in Iowa and three in Minnesota. He opened his first in September 2012 as the vaping scene was becoming popular. Some tobacco shops were also selling e-cigarette products, but his was the first standalone vapor-related shop.

Since first opening, Halfhill says his business has researched and tested numerous products to make sure they fit the company’s target market: for the general smoker to be able to transition out of cigarettes.

“That’s been our intention from the get-go,” he says. “It’s so easy to transition from smoking to vaping because people still feel like they’re smoking, and they still get the nicotine.”

There’s been substantial growth in the business as more people have become aware of vaping as a form of smoking cessation, Halfhill says.

He’s seen truckers and tow truck drivers who smoked three or four packs of cigarettes a day transition to vaping and improved their health. That’s why he trains his staff to question each user and to learn about his or her needs. He estimates about 10 percent of users are hobby users of vaping products.

How is it regulated?

In Iowa, retailers who plan to sell vapor products must obtain a permit from the local municipality in which the retailer is located. No sales may occur without a permit, and an applicant must obtain a permit for each place of business owned or operated by the retailer.

The municipality, city or county, then submits a duplicate of the retail permit application to the alcoholic beverages division of the Iowa Department of Commerce. A list of these permits is then submitted to the Iowa Department of Public Health on the last day of each quarter.
Retail permits expire on June 30 of each year. The cost of the permit varies depending upon which month it is issued. For the months of July, August or September, the fees are:

$50 outside of the city
$75 in cities of fewer than 15,000 residents
$100 in cities with 15,000 or more residents

The fees are three-fourths of the cost when issued in October, November or December; half if granted during January, February or March; and one-fourth of the cost if issued in April, May or June.

The sale of vape products is similar to the sale of cigarettes and other tobacco products in that it is prohibited to minors. Iowa law bars the sale, distribution, possession, purchase and use of vapor products to anyone younger than the age of 18.

Halfhill says the Food and Drug Administration has inspected each of his locations and spot checked to ensure the store isn’t selling illegal products.

The Iowa Smoke Free Air Act does not apply to electronic smoking devices such as e-cigarettes, vaping devices and others. However, business or property owners may choose to adopt policies that prohibit these products. Vapes are banned at most schools. More than 80 percent of schools in Iowa have tobacco- and nicotine-free policies.

Johnson says he abides by all cigarette smoking laws and doesn’t vape where cigarette smoking isn’t allowed. If smoking friends go outside, he smokes outside with them.

“It’s still frowned upon,” he says. “Not a lot of people know about vaping. They think it’s just as bad as smoking. That’s not true. I still try to abide by the rules for people who are smoking nicotine cigarettes.”

Where do customers buy supplies, find savings?

Johnson reserves local purchases for when he immediately needs supplies. Otherwise, he buys what he needs from an online store because he’s found it to be cheaper, specifically when it comes to juice for his vapor.

He says recently he placed an online order that cost $93 with shipping and tax. That same purchase locally would have cost him $170, he says.

Johnson says vaping is cheaper for him than smoking cigarettes. He can buy about 60 milliliters of juice that lasts about a week for $8 to $10 a bottle. If he were to smoke during that time, he would have gone through about five packs of cigarettes at about $7 a pack.

Halfhill says vaping is cheaper than smoking if the user treats it like they would a cigarette. For example, if someone takes six to 10 puffs of a vape and then doesn’t puff on it again until they feel the need for it, it’ll last longer.

“If they treat it like a true cigarette, they save about 80 percent over traditional cigarettes,” he says.

Will there be a crackdown?

President Donald Trump said last fall that he would try to ban flavored vaping products other than menthol and tobacco in order to deter young people from using the products.

A few months later, in November, the American Medical Association called for a total ban on all vaping products that haven’t been approved by the FDA. The nation’s largest association of physicians also wants more money devoted to research the effects of e-cigarette use, new diagnostic codes for vaping-related illnesses and more studies on strategies to treat youth nicotine dependence from e-cigarette use.

Iowa Gov. Kim Reynolds in mid-December announced a public service campaign to address the increased number of Iowa teenagers who are vaping.

The campaign includes a social media component, with videos targeted at teens on SnapChat, Instagram, Facebook, YouTube and other sites, as well as informational programs for parents and students from school nurses, teachers and administrators.

Reynolds said she wanted to increase awareness and education of the risks of vaping to prevent nicotine addiction and health problems among young people. Her announcement came amid a report that youth vaping has more than doubled since 2017 with one in four high school students saying they have vaped and one in nine high school seniors saying they vape on an almost daily basis.

“Like many states over the years, we’ve seen the traditional rates of smoking going down and e-cigarettes rates going up among youth,” says Dr. Caitlin Pedati, the State Medical Director and Epidemiologist with the Iowa Department of Public Health.

According to the 2017 Youth Risk Behavior Surveillance System, the most recent year available, 36 percent of the Iowa high schoolers who were surveyed have tried a vapor product versus 29 percent who say they’ve tried smoking a cigarette.

Other states also have taken action. The Public Health Law Center, location in St. Paul, Minnesota, reports that elected officials in 10 states have taken action to either ban certain vape flavors or products — some have been met with legal challenges that have successfully blocked or halted in the action — or taken action similar to Iowa’s governor.

Reynolds also announced she’d be open to legislators raising the legal smoking age to 21 and increasing the state tax on nicotine-related products.

All of the announcements and threats have vape shop owners worried. It has damaged business and led to fewer sales, Halfhill says.

“There’s been a few states where store owners or manufacturers, or both, had to close their doors because of knee-jerk reactions, because of politicians thinking it was all e-cigarettes when it wasn’t,” he says. “The unfortunate thing is you have kids who are getting their hands on this, but to take it away from the majority just isn’t good for public health. The tobacco rates are down.”

Michael Triplett, the legislative counsel for Iowans for Alternative to Smoking & Tobacco (IFAST), says it’s a wait-and-see time for vaping and vapers’ rights, both within the state and at the federal level. The organization has advocated for adults to have the right to choose vape products in lieu of smoking cigarettes and also supports measures to prevent youth from accessing vape products, he says.

Despite some concern, Triplett says many stores continue to report an increase in sales.

“We need to make sure lawmakers understand what the problems are, and that banning flavors is not a solution to that problem,” he says. “I would remind lawmakers and the public that, in the mid-1980s, we raised the drinking age from 19 to 21. There’s still a lot of underage deaths per year on alcohol, but yet no one is clamoring to ban flavored alcohols.”

Instead, Triplett thinks a ban of flavors would create an underground black market of people who want certain flavors and then either buy them off the street or through the Internet from an unsafe source.

“We saw firsthand evidence of the downside of that this year,” he says.

Does vaping make users sick?

Michael Johnson switched from smoking to vaping after he was introduced to it as a way to stop smoking. Photo submitted.

Johnson says he feels better since he stopped smoking cigarettes. He also enjoys other aspects of it, as well. He doesn’t smell like smoke. He can smell and taste.

He acknowledges vaping is the lesser of two evils, but he says when he smoked cigarettes, he was frequently sick with colds and was stuffed up, congested and had a sore throat once or twice a month. Since he started vaping, he’s only been sick twice.

E-cigarettes can also be used to deliver marijuana and other drugs, which vaping advocates have said is the cause of much of alleged illness tied to vaping.

The FDA and CDC are investigating the cases to determine the cause. The FDA in October warned against the use of Tetrahydrocannabinol (THC)-containing vaping products and other vaping products obtained from unknown sources. The administration reported, through its investigation, that most of the patients who had been affected by the illnesses had been using THC-containing products, thus “suggesting THC vaping products play a role in the outbreak,” according to the FDA’s website.

However, in Iowa, the Department of Public Health’s website reports that vaping products and devices that do not contain THC have been reported among the 52 affected cases in the state. Of those 52 cases, 41 had THC, according to the department’s Dec. 17, 2019, report.

Halfhill and other proponents of vaping say they’ve gotten a bad rap for the THC-laced products. He acknowledges that youth vaping is a serious issue, which is why he helped create an advocacy group when he first opened his business to ask lawmakers in 2014 to regulate vaping and make the age the same as tobacco.

What’s the answer?

Halfhill believes the answer to combatting the youth vaping problem is stricter penalties on stores that sell to minors.

At Central Iowa Vapors, stores communicate with each other any time they turn away someone for suspected sales to a minor, so employees at other stores can be on the lookout for the person.

“If you take something away just because the kids are doing something, then you’ve got the potential of 480,000 people who die a year that could be saved by vaping back smoking again,” Halfhill says.

Higher fines and few strikes for violators would limit the number of underage sales, Halfhill says. Instead of allowing six violations, he says it should be three before a license is permanently pulled.

“I think you’d get more people being serious about who they’re selling to,” he says. ♦

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