State proposed e-cig ban creates confusion for NYC retailers

BY Jingyi He and Anmargaret Warner

A statewide ban on the sale of flavored electronic cigarette products and nicotine e-liquids has stalled in court, creating confusion among New York City retailers uncertain about how to adapt their business to a pending regulatory change.

There are nearly 1,000 active e-cigarette retail licenses in New York City, according to the NYC Department of Consumer and Worker Protections (DCWP). Over 30% of these retailers – the highest concentration within the city – are on the West Side of Manhattan from 14th Street to 59th Street. These dealers are now confronting a situation where much of their inventory might soon be illegal.

“I’m hopeful that the ban doesn’t come into force. I’m not ready for this,” said Sdeen Alchte, owner of Liberty Smoke Shop on West 48th Street in Hell’s Kitchen. Alchte said flavored vapor products account for nearly half of his business. 

New York State Gov. Andrew Cuomo announced the ban, which covers all flavored electronic cigarettes and nicotine e-liquids, on Sept. 17. Retailers were initially given until Oct. 4 to comply, but a New York Supreme Court judge halted the ban one day before it was due to take effect after Vapor Technology Association, a national trade association of the vapor industry, filed a lawsuit claiming the state had overstepped its regulatory authority.

Gamal Alawdi, manager of NYC Smokes, has stopped ordering e-cigarette products for his store and plans to sell remaining e-cigarette products back to the wholesale distributor. He said NYC Smokes is considering selling coffee and sandwiches to substitute e-cigarette sales, but he is not confident the change will be profitable enough to cover store rent. “We’re going to lose money,” Alawdi said.

A March 2017 report by the New York State Vapor Association indicates that vaping is a $540 million industry in the state. The report shows that flavored e-liquid sales alone account for at least 70% of the market. The organization filed a motion on Oct. 6 to join the Vapor Technology Association lawsuit as a plaintiff.

Spike Babaian owns VapeNY, a chain of three retail vape stores in New York City where flavored e-cigarettes account for the majority of sales. If the flavor ban is enacted, Babaian plans to store her remaining inventory or dispose of expired products in a nicotine recycling program. VapeNY has also filed a motion to join as a plaintiff in the lawsuit.

According to the Centers for Disease Control (CDC), as of Oct. 8 there have been nearly 1,300 lung-related illnesses throughout the country associated with e-cigarette use. Almost 80% of these illnesses have been linked with vaping Tetrahydrocannabinol (THC). New York City-based retailers are not authorized to sell THC products. In a warning to the public, the CDC specifically recommends not buying vaping products from unauthorized retailers, or “off the street.”

“When you start dealing with a category of products like this that cause harm – whether it be guns or alcohol or tobacco – you’re taking a risk as a retailer,” said Trevor Fetter, a professor at Harvard University Business School who has studied vaping companies. “Every retailer has the responsibility to understand the implications of what they’re selling,” said Fetter.

According to Cheryl Richter, an executive director for the state vapor association, this ban will leave smokers with limited, and potentially harmful, options. Richter predicts customers will return to smoking traditional tobacco cigarettes, mix their own vapor products at home, or purchase unregulated products on the black market. “Electronic cigarettes are a very disruptive technology to the old guard: disruptive to big tobacco and disruptive to big pharma,” said Richter.

Bans like this can “encourage a black market of illegal products, which lead to more cases of adulterated bootleg products,” said David Abrams, a professor of public health at New York University. Abrams has co-written a report on tobacco control and harm minimization.

Ghamdan Hassan manages a tobacco and e-cigarette store in Hell’s Kitchen. “If they really want to regulate, they should find a way to tax vaping products like tobacco, and then go after unregulated stores selling to minors. The best solution is always to find a way to regulate,” Hassan said. When asked about the future of his store after the ban, Hassan said, “Everybody is scared about what’s going to happen.”

The governor’s office did not return a request for comment on how a ban would be enforced.

This entry was posted on Monday, October 21st, 2019 at 3:56 pm. It is filed under Business, Latest, Midtown West and tagged with ban, business, electronic cigarette, Hell's Kitchen/Clinton, new york city, retail, vaping. You can follow any responses to this entry through the RSS 2.0 feed.