Understanding the FDA August 8th, 2016 Regulations

[Christopher]

Topic created for "Understanding the FDA August 8th, 2016 Regulations" blog post.

If you haven't already done so, please read my blog post here: http://www.vaportalk.com/understanding-the-fda-august-8th-2016-regulations-vaping-industry/ 

[Squid]

If I read this correctly, we should be able to buy supplies until December with no issues?

[Tam]

Thanks for the explanation in simple English, Chris. Much appreciated!

I'm at a total loss for words about what I feel for the FDA right now.

[Christopher]

32 minutes ago, Squid said:

If I read this correctly, we should be able to buy supplies until December with no issues?

In theory you should be able to buy hardware into 2018 without too much issue. (no new products but what's available now should still be available. That is unless a state law etc gets in the way) But there are more upcoming regulations that I didn't post. For example liquid manufacturers/producers/mixers will need to supply the FDA with their ingredient lists by February through the PMTA application process. If vendors white label using a 3rd party source, they'll need to ensure their source files their ingredient list to the FDA. While the enforcement won't happen right away the deadline is Feb for large manufactures and August 2017 for small mixers/manufactures. There's a little leniency while vendors/manufactures take time to figure out the process, but that time is limited and enforcement will eventually happen.

In the coming months/next year or two if you're favorite liquid mixer or manufacturer isn't planning on becoming compliant, expect their products to come off the shelves. 

We created Vapor Talk's black label line for this very reason. (Thus why it took so long to release) 

Vapor Talk will start working with the FDA in a month or two. (We're undergoing a huge process at the moment to prepare for the PMTA though I won't yet publicly comment on that)  We've already started the process with the European Commission for TPD. The process and cost is absolutely unbelievable. But every order in the VT store, helps push us forward! I picked a great time to come back into the fold huh?

[Bebop]

Chris

Is there any way to find out which companies will stay in the game and which ones will be leaving us?

Will e-cig manufacturers or distributors make it publicly known if they intend to continue? Seems to me those intending to stay would announce it forthrightly while those not planning to stay will tend to be silent and just off load.  Do you know who the major players are for both juice and hardware?  

How can the average current consumer find out or stay apprised of these types of things? Or can they?

[Christopher]

41 minutes ago, Bebop said:

Chris

Is there any way to find out which companies will stay in the game and which ones will be leaving us?

Will e-cig manufacturers or distributors make it publicly known if they intend to continue? Seems to me those intending to stay would announce it forthrightly while those not planning to stay will tend to be silent and just off load.  Do you know who the major players are for both juice and hardware?  

How can the average current consumer find out or stay apprised of these types of things? Or can they?

All good questions. You basically nailed it on the head. Those planning to stay and those who believe they'll pass PMTA are likely going to speak it fairly loud. If not simply for the fact it proves they managed to somehow get through the PMTA process which I can assure you is stringent. Those not willing to stick around will probably stay quiet for fear they'll lose customers. 

On the flip side, some companies we've got wind are going through PMTA are staying quiet about it.  (These are the really big guys. There is no official step by step but they're using some more traditional methods to get a head start. They've got huge budgets) The main reason is that anyone who can obtain PMTA has a major marketing advantage, so, they really don't want to offer up any sort of support clues to the smaller guys on how to make it through the process. (The larger players). What this has really done is ensured big players, especially those backed by big tobacco obtain a de facto monopoly in the US. I've always had a feeling it'd likely go this way. Kill the competition through legality and regulation. 

Companies like NJOY, Blue, etc are all very likely to move forward without much issue. They've been building up resources for years with huge supply lines. I'd imagine that some of the larger liquid companies who saved or invested their money are likely to stick around. But without knowing how much some of these guys made it's hard to say. For hardware companies like Kanger Tech & Aspire are planning to push through the PMTA process. Their biggest concern is that because they are Chinese based that the FDA won't work with them. Most however are eager, willing and financially capable of making it through all of this. 

For us personally, we're not 100% sure at the moment. (Thus why there's a lot of focus on Vapor Talk Asia and Vapor Talk Europe, which is a shame because those are potential jobs forced away from here..) We've got our products already our for testing and we've started the pre application phase. We're still mulling some things through with our investors but Vapor Talk's Black Line alone could cost 6 million USD to push through PMTA - with no guarantee it'll pass. And it's only 5 flavors! the 6th being reserved for outside markets. (Prince of Jazz) If our application fails, we pay and repeat until the FDA gives us the greenlight. 3 runs could cost upwards of 18 million dollars. Incredible. 

If you want to stay up to date on who is going and who is staying I'd suggest just staying on the forum. (ECF is another good source of info) I took a back seat role for a few years but these days I've hit the ground running and staying pretty well up to date. I'll start up video/podcasts shortly and will do my best to keep everyone here in the loop on whatever I managed to find out. Roger's in Beijing and usually keeps me up to speed on how little China is progressing with the FDA. 

[Bebop]

I look forward to your videos/podcasts. 

 

More later.  I have to get some sleep....

[spydre]

Chris, would you agree that this sounds like it's coming from big tobacco, rather than excessive concern from the FDA?  It's almost like they want people to stay on the cancer sticks rather than something less harmful (we know there is some harm in this, studies have born this out, but it's almost negligible)?  Also, big pharma could get a bigger cut with Chantix sales possibly going up (I can't take Chantix, and a large number of people can't because of side effects)?

I know there are at least a couple of lawsuits against the FDA over this.  And many docs are referring their patients to vaping.  My sister sees the same doc as my Dad.  He recommended to my Dad that he vape instead of smoking because of the condition of his lungs.  He recommended to my sister that she vape, saying, "I don't want you to end up like your Dad"!

[Christopher]

You know to be perfectly honestly with you, I don't think this is all on big tobacco. I think there are many that want to point the blame but in fact Alteria recently spoke out against the PMTA guidelines. (Who knows though that could just be a PR spin) What I suspect is the FDA probably has a big hand in this on their own. Flexing their new found muscle if you will. But I'd say this is as much on so called big tobacco as it is some of the bigger vape players. I might get some flak for this, but the big ecig names aren't going to be affected by this. Let me re-phrase that, the board members running the large corporate run ecig ventures are looking at this a different way: If they make it through PMTA and companies like NJOY and BLU have the resources to do so (Remember Blu is owned by Lorillard aka Newport/Camel) and all the little guys in this wild west market finally drop out, it's a de facto monopoly. They'll make their money back. 

There's a huge market out there that hasn't switched and if the only option is say NJOY or Blu (respectively) they'll probably make the switch. (After all if they've never tried any of the devices we've used, they won't know the difference anyway.) Just wait for a decade to pass by and new vapers won't recall or even know any of this happened. 

Thing is, there's a ton of arm chair vapers "up in arms" about this. But there are few, as with most changes in this country, that'll actually go out and do something about it. Sure we've got the big Youtubers/Podcasters/Cassa etc but those guys can only do so much. (and respect to all of them for their efforts) But It's really a power by numbers and the numbers generally rely on these few organizations as their voice. The vaping market is a billion dollar industry these days, that money comes from a whole lotta people. If those people took to march in front of the FDA/Congress or went old school Boston Tea Party mode, I'd imagine **** would hit the fan and we'd get something done. But, everyone's busy, there's a new XBOX game coming out and complacency remiss is probably the country's new motto. The most common comment I usually read on different forums is "well I've been stocking up, I'm good" and that's that. 

 

(Edit: I should note it's 4am PST. I tend to type aloud if you will so my opinions could be totally off base, but I don't pre PR my posts to the disappointment of the VT marketing guy )  

[spydre]

I know there is a March planned in, I think, Michigan tomorrow - but considering it's not at the FDA, it's not really saying much.  

Is it true that the IRS is counting unsold inventory as income rather than inventory now?  At least that's what that large shop/wholesaler said.  But I'm not sure they've incorporated, either, which is bad news.  They may end up losing a mint over this, and if it's not incorporated?  It all falls on them, not a corporation.  They have their own line, but not the resources to submit every flavor, every nic level.

[Christopher]

31 minutes ago, spydre said:

I know there is a March planned in, I think, Michigan tomorrow - but considering it's not at the FDA, it's not really saying much.  

Is it true that the IRS is counting unsold inventory as income rather than inventory now?  At least that's what that large shop/wholesaler said.  But I'm not sure they've incorporated, either, which is bad news.  They may end up losing a mint over this, and if it's not incorporated?  It all falls on them, not a corporation.  They have their own line, but not the resources to submit every flavor, every nic level.

That I'm not sure off, though Roger likely would. 

And I think that's the case with most "manufactures" (which is really mostly small outfits) There are some great liquid mixers out there who have done a really great job of self regulating. The are others that have... they just shouldn't be mixing in the first place. But regardless, I'm sure we'll see some solid folks close shop in the next couple years if not soon. 

You know on the flip side though, we had a meeting last week with some of our outside vendors and some good points came up about the lawsuits coming into play. It wasn't just 5 years + back that we were having similar issues when Smoking Everywhere up and sued the FDA. They went broke doing it I believe, then NJOY took over. Much of the reason we're all vaping today is a direct result of the lawsuit NJOY carried forward. So you never know what changes could happen moving forward. 

(As for the March, any march is a good march!)  

[spydre]

I know the states sued Big Tobacco and won - enough that for Phillip Morris to appeal in IL, they had to place a bond of 10% of the verdict, which nearly bankrupted them.  Each state got a block grant from the tobacco settlement, to be used for various things.  I didn't know Big Tobacco sued.

[Adversarious1]

Chris,

Do you have any info or input (even if it's only your personal opinion) on how HR 2058 can possibly affect all of this?  

The way I see it, HR 2058 can definitely be a game changer - at least as far as what is currently on the market and it's availability later on down the line.  I know the bill is still gaining co-sponsors, so I know it isn't dead.  I have submitted my letters to my senators and congressman via CASAA's website at least three times and I urge everybody else to do the same.  In fact, I just received the canned reply from my congressman in my email today.  I don't expect either of my senators to come on board, as they are both democrats (not trying to get political with this, but face it...it is) and one of them is a lame duck who is giving up her seat at the end of her term anyway, but the canned letter from my congressman wasn't anywhere near as "thanks for your input...nicotine is dangerous...we need to save the children" as the canned letter I got from one of my senators.

[Christopher]

25 minutes ago, Adversarious1 said:

Chris,

Do you have any info or input (even if it's only your personal opinion) on how HR 2058 can possibly affect all of this?  

The way I see it, HR 2058 can definitely be a game changer - at least as far as what is currently on the market and it's availability later on down the line.  I know the bill is still gaining co-sponsors, so I know it isn't dead.  I have submitted my letters to my senators and congressman via CASAA's website at least three times and I urge everybody else to do the same.  In fact, I just received the canned reply from my congressman in my email today.  I don't expect either of my senators to come on board, as they are both democrats (not trying to get political with this, but face it...it is) and one of them is a lame duck who is giving up her seat at the end of her term anyway, but the canned letter from my congressman wasn't anywhere near as "thanks for your input...nicotine is dangerous...we need to save the children" as the canned letter I got from one of my senators.

If that bill was to pass, it would have a major effect on the current market. Though I try to stay on top of all this much as possible (it's difficult) it's my understanding that essentially anything introduced to the market prior to August 8th (which is basically everything available as of yesterday) would not be subject to the PMTA guidelines. Additionally, I suspect that any new products could likely claim "substantial equivalent" making new products easier to process through PMTA guidelines. 

That would be huge... Black Label for example, would not need the 6 million in capital we're currently attempting to budget from investors. Instead we'd likely use that to expand our retail store and hire a ton of new jobs. 

EDIT: In case anyone wants to view the current status of this bill, you can Click Here. Though it has 71 cosponsors, it hasn't had any movement since April of 2015.

[FXRich]

8 minutes ago, Christopher said:

That would be huge... Black Label for example, would not need the 6 million in capital we're currently attempting to budget from investors. Instead we'd likely use that to expand our retail store and hire a ton of new jobs.

Does the FDA understand that the new regs will kill jobs? I have to agree with Adversarious, this is not the place for politics, but Oregon also has 2 senators with a D after their name, and the Congressman from my district is the only non D from this state, we also have a non elected Governor who wants to raise taxes, it is a real mess here. 

[Christopher]

1 hour ago, FXRich said:

Does the FDA understand that the new regs will kill jobs? I have to agree with Adversarious, this is not the place for politics, but Oregon also has 2 senators with a D after their name, and the Congressman from my district is the only non D from this state, we also have a non elected Governor who wants to raise taxes, it is a real mess here. 

If the PMTA guidelines are any indication I'd say they don't care at all. The thing is, I think most vendors are completely ok with regulation. Ingredient analysis, child safety conformity, age verification and submission of facility inspection to me are all reasonable requests. In fact I'd say at this point it's almost vital with some of the questionable mixers out in the wild. (I know this is not widely agreed on) But 1 million per application? At least. And to make matters worse if you fail the processes, you have to start again and pay the fee again. Not to mention the FDA still hasn't provided an easy step by step process for your average vendor to comply. They released a 400 page document of more questions. 

On the flip side you've got Europe. They have TPD in effect (something we're currently going through now) and while it does incur a number of expenses it's much more reasonable. The process is well documented step by step even for the newest of business owners. In other words, Europe wants regulation but without sacrificing newly established business. They understand a number of these businesses are regular folks who walked into a new industry. NHS also sees the potential savings in smokers switching to e-cigarettes. They provide easy to understand documentation and just this morning I had an email and phone call from the European Commission's office assisting us with our application. (We made an entry mistake). That's really the example in my opinion of how things should be done. While TPD isn't an easy process, it's doable for any business or business owner that makes the effort. Additionally at a cost of under 50k depending on your situation and the amount of product you're trying to obtain compliance on. 

The US needs jobs. We're not Google or Microsoft but we've got investors hoping on board with Vapor Talk. It would be awesome to open new offices in California and New York hiring at least 10-30 people. Then you have the natural ecosystem supporting the business (box maker's, label providers, art firms, the postal service, fedex, web hosting, the list goes on). If we fail PMTA we're not going to close, we'll just be forced to run our operations in Asia and Europe. What a load of crap. 

[Adversarious1]

27 minutes ago, Christopher said:

If the PMTA guidelines are any indication I'd say they don't care at all. The thing is, I think most vendors are completely ok with regulation. Ingredient analysis, child safety conformity, age verification and submission of facility inspection to me are all reasonable requests. In fact I'd say at this point it's almost vital with some of the questionable mixers out in the wild.

I agree with this statement and I'm only a consumer.  But I think it goes beyond just ingredient analysis, child safety, age verification and facility inspections though.  Personal opinion only, but I would like to see some sort of regulation regarding packaging.  Along the lines of "Joe Camel" back in the 90's, there are dozens if not hundreds of liquid manufacturers out there whose packaging is appealing to children.  While those manufacturers may not intentionally be marketing to children, perception is reality.  Public (and political) perception is that those manufacturers are marketing toward children.  The argument that "adults like fruit and dessert flavors too" isn't going to cut it and it never should have.  VT's labeling and packaging is a great example of the proper way to do it.  Pictures of Rice Krispy Treats, Fruit Loops and Apple Jacks is not.

It isn't only liquids, though.  Every piece of hardware is now going to be regulated by the FDA.  I think that's wrong on a number of levels, but one of those reasons I think it is wrong is because many of the things we as vapers take for granted are things that were adopted for vaping from other uses.  Batteries, wire and cotton to name a few.  If I understand it correctly, things like 18650 batteries will now fall under the same FDA regulations.  Wire we use to build our own coils will now fall under FDA regulations.  Organic Japanese Cotton will now fall under FDA regulations.  Do we really expect battery, wire and cotton manufacturers to submit their products for approval?  I don't.  What I think is more likely to happen is that battery, wire and cotton manufacturers will be more selective on who they do business with unless the FDA eases up on some of the things they are "regulating" as "tobacco devices".

I'm sorry to be venting and I know for the most part I'm preaching to the choir, but our government here in the United States as a whole and even more so at many of the state levels is completely out of control.

 

[Christopher]

I completely agree on the packaging and should have mentioned that in my paragraph also. I've always considered that common sense but you're right in that some manufactures really push the boundaries. When I was in Shanghai there was some liquid being sold that looked exactly like the Nesquik containers. There's really no need for that at all. 

As for the hardware, again I really don't see the logic behind this. The RC industry for example uses a lot of the same batteries we do in our mods, I can't help but wonder how it'll affect that industry. I just can't see RC manufactures and retailers applying for multimillion dollar hardware applications. It's which I mentioned early in the thread that I believe they may be forced to put systems/checks in place to ensure their products aren't being sold for use in "tobacco" applications. 

EDIT: Attached a picture of the packaging... (That's eliquid... note the 3MG on the upper right box. That was actually imported from the states) 

[FXRich]

Now that I have plenty of mods and tanks, the only things I need are coils and, juice. 18650 batteries can be bought from many sources, flashlight supply websites, and possibly RC stores, wire can be bought from jewelry making suppliers (except for Kanthal), wicking materials can be bought from beauty supply stores. I DIY my juice, so that should not be a problem, except for the nic base, (I currently have 2 1/2 liters of 100mg VG base). The new regs won't affect me much, but the new vapers will be hurt.

[Tam]

3 hours ago, Christopher said:

EDIT: Attached a picture of the packaging... (That's eliquid... note the 3MG on the upper right box. That was actually imported from the states) 

At a quick glance I was wondering why you posted a picture of generic Nestle's Quick powder mix. That's just wrong in so many ways.

[Christopher]

Right? I saw that and had to double take. Once you open it there's a couple 30ml bottles inside. 

[Christopher]

Hey Folks, 

I've updated the blog post to included to new regulations I did not include which are fairly important for retailers who visit the board: 

On Site Rebuilding (Retail stores making coils) –  If retailers have a documented catalogue of every type of coil they are building and can prove that each one was manufactured, marketed, and sold prior to 8/8/2016 and can demonstrate that these coils are made the same way, consistently after 8/8/2016, then it is possible that the shop may decide to continue to offer coils built in­house. However, installing these coils on a customer’s device adds another variable that may need to be accounted for. (Updated thanks to TYJ Blog)

Assembling Products for Customers – Retail staff can instruct and even demonstrate how a device is assembled or a tank is filled or how eliquid is dripped. They cannot assemble products for customers. That would qualify them as a manufacturer. To that point, repairing or adjusting a customer’s device is also considered manufacturing. The range of possibilities alone makes it virtually impossible to file the appropriate number of PMTAs to continue offering this service 

[Squid]

1 hour ago, Christopher said:

 

Assembling Products for Customers – Retail staff can instruct and even demonstrate how a device is assembled or a tank is filled or how eliquid is dripped. They cannot assemble products for customers. That would qualify them as a manufacturer. To that point, repairing or adjusting a customer’s device is also considered manufacturing. The range of possibilities alone makes it virtually impossible to file the appropriate number of PMTAs to continue offering this service 

Good to know. I will pass this info on to the local B&M. If I understand this correctly they can open up and reassemble a display tank from the case to demonstrate as long as the tank does not belong to a customer.

I seem to be one of the few that has access to a B&M that hires sales people and trains them in customer service. I have personally seen them (before 08-08-16) spend half an hour with someone that bought a mod and tank showing them every step of taking it apart to clean and putting it back together and filling.

[Christopher]

24 minutes ago, Squid said:

Good to know. I will pass this info on to the local B&M. If I understand this correctly they can open up and reassemble a display tank from the case to demonstrate as long as the tank does not belong to a customer.

I seem to be one of the few that has access to a B&M that hires sales people and trains them in customer service. I have personally seen them (before 08-08-16) spend half an hour with someone that bought a mod and tank showing them every step of taking it apart to clean and putting it back together and filling.

That's correct and basically the gist of it. Pretty ridiculous 

[MRSpivey]

So, what perplexes me is why the FDA isn't going after regulations on grills... they are used in food preparation... Oh, blenders, mixers, refrigerators, ovens, and so forth. This is one of the most disgusting and blatant abuse of authority I have seen in my life.