More than two years after banning sales of vaping products, Walmart is testing a potential ban of traditional tobacco products.
The world’s largest retailer will stop sales of tobacco products in some of its more than 5,000 stores across the United States, the company said on Monday.
Walmart did not disclose how many stores would be affected by the move, but said it would not be exiting the category entirely.
The markets in which cigarettes are being removed from stores include California, Florida and New Mexico, according to the Wall Street Journal, which first reported the news, according to Reuters.
Several Democratic U.S. senators have urged Walmart and several other retailers to stop selling all tobacco products.
The number of crimes committed at specialty retail outlets has grown dramatically over the past few years.
By Timothy S. Donahue
Every year, hundreds if not thousands of cannabis dispensaries, vape shops and tobacco outlets are robbed or burglarized in the U.S. On July 10, in Lincoln, Nebraska, between 2 a.m. and 5 a.m., the police department responded to alarms at two vape shops where officers found shattered storefront glass at both locations. The thieves targeted CBD (cannabidiol) and Delta-8 THC (tetrahydrocannabinol) products. The pair of break-ins happened two days after another similar burglary, totaling three in as many days. The businesses lost tens of thousands of dollars in merchandise.
Timothy Goodman, a manager at the Lincoln Vapor location, said that break-in was just the latest in a string of six incidents in approximately the last two years, according to news reports. Goodman, who has worked at Lincoln Vapor for nearly four years, said it’s his understanding that every break-in can be linked back to the same group.
The burglars stole $2,000–$3,000 worth of merchandise in May 2021 and have lifted around $16,000 in products from the business through the last year and a half, according to Goodman. Most products were hardware and cannabis products, such as CBD and Delta-8 THC. “It’s frustrating beyond belief,” he said. “I wake up most nights in the middle of the night and check the cameras to make sure nobody got in.”
The rise in vape shop crimes may be an unintended consequence of recent regulatory actions, such as tax increases, flavor bans and raising the age to purchase vaping and tobacco products to 21, according to many industry experts. Richard Marianos, a senior law enforcement consultant who has served more than 27 years at the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives and who is now a consultant and adjunct lecturer at Georgetown University, says crime is often an unintended and overlooked consequence of regulatory constraints on the marketplace that encourage the growth of black markets.
Credit: Lexington Police Dept.
Marianos said that taxes and flavor bans bring prohibition, and prohibition brings crime. “These regulatory actions mean a dramatic increase in street sales to kids, and that is what we have seen all over the United States,” said Marianos. “If you have any form of tobacco harm reduction in your state, just throw that completely out the window [if you are going to implement flavor bans and raise taxes exorbitantly] because it forces young adults and people who can’t afford these products into a growing black market. In terms of law enforcement, the issue is that there has been 150 percent increase in smash-and-grabs because of the difficulty of purchasing these products.”
Sam Salaymeh, president and CEO of AMV Holdings, parent to a chain of 113 Kure CBD & Vape shops across the U.S., said that his stores have seen a major increase in crime over the past two years. During Covid-19 lockdowns in 2020 through early 2021, AMV stores had over 20 burglaries combined. “There is a myriad of stories that come with these break-ins, but the main theme is criminals are trying to get to high-value items that are small in size—and that would be the CBD/cannabis products … etc.,” explains Salaymeh. “This is happening more and more across the country.”
Credit: Manatee County Sheriffs Office
During a one-hour period on Dec. 20, five separate retail locations—three vape shops and two tobacco/vape outlets—suffered a string of robberies by three men wearing masks that crossed the Southeast region of Los Angeles County. A shop owner said the criminals pretended to be customers when one pulled a gun and demanded money while two others snatched merchandise from the store’s shelves, according to news reports.
Credit: UK Vapers
“We now have organized crews that go out and hit multiple stores like convenience stores, gas stations, vape shops in a single night or a weekend … they don’t go for cash registers; they want the tobacco products because they can sell it on the street cheaper than what it’s being sold for with these high taxes and these prohibitions,” says Marianos. “They’re making a fortune in the black market the same way the dope dealers are selling cocaine and heroin because the taxes on vaping and tobacco products are going through the roof.”
Crimes of convenience
In 2020, there were 102,677 robbery incidents and 102,677 offenses reported in the U.S. by 9,991 law enforcement agencies that submitted National Incident-Based Reporting System (NIBRS) data. Nearly 25 percent of those incidents were committed at convenience stores (13,721), gas stations (7,006) and specialty stores, where vape shops are lumped into (5,372) combined. If criminals are looking for quick cash, then robbing convenience stores or small specialty retail shops is one of the best ways to do it, according to the FBI.
John Cavanaugh, owner of California-based Vaping Industries, says that thieves have broken into his stores numerous times. Typically, thieves try to take what’s immediately available. “They broke in after hours … broke the glass, popped open the register, grabbed the cash, broke into my office, got the petty cash and then rolled out,” he said. “I think we are starting to see more robberies than burglaries lately, and I think that it’s an easier target to hit a vape shop or a smoke shop with guns because the layout is small, there’s only typically one or two employees and—especially with cannabis dispensaries—there’s a lot of cash on hand.”
Burglary
Robbery
The terms “burglary” and “robbery” are not interchangeable.
They have meaningful differences.
Burglary involves a person illegally entering a building to commit a crime while inside.
Robbery is typically when someone takes something of value directly from another person using force or fear.
There is a far greater chance that someone committing a robbery will do so armed compared to burglaries, which typically occur after hours.
Convenience stores accounted for nearly 13 percent of all violent crimes suffered in 2020, and gas stations accounted for about 12 percent.
Across North America, crimes involving vapor, tobacco or cannabis shops are getting more violent. On Dec. 3, in Calgary, Canada, officials said a “number of people” entered Jerry’s Smoke and Vape just after 6:30 p.m. According to a police report, one of the suspects pointed a gun at the clerk, and the bandits made off with cash and merchandise.
On Sept. 12, in British Columbia, a suspect entered a vape shop alone armed with a shotgun. After threatening an employee, the suspect took an undisclosed amount of cash and product before escaping on foot. Over the weekend of May 29 to June 1, 2020, thieves burglarized several cannabis dispensaries, distribution centers and cultivation in Los Angeles, Oakland, San Francisco and other cities, stealing legal commercial cannabis products and cash. On Sept. 11, 2021, in Calgary, Canada, three masked men entered a dispensary armed, held off staff and got away with a quantity of cannabis products.
Cavanaugh said robberies are more common at cannabis dispensaries than vape shops because cannabis dispensaries have a lot of cash on hand, especially in the U.S. where very few banks will work with marijuana businesses. There are also numerous illegal cannabis dispensaries, which perpetrators know are less likely to notify law enforcement.
“Before all of this started happening over the last few years, I didn’t really believe in upping my security. Now, I have to make sure that there are panic buttons, that my staff are properly trained for when somebody comes in with guns blazing,” he says. “They need to know to just give it all up. Give them the cash and whatever they want. It’s OK. It isn’t worth your life. I’m also now spending extra money for high-end security cameras and security systems. It’s frustrating.”
Crime prevention
According to Marianos, there are several reasons why thieves target convenience stores and gas stations and now vape shops and dispensaries: operating hours and low numbers of staff on site, and these types of stores have smaller layouts, so it’s easier to find the expensive/high demand products and there is the potential for large amounts of cash on-site.
“You don’t want it to make product accessible where somebody can just take a trash can, throw it through the window and get into your shop and take all your stuff,” says Marianos. “More cameras, limiting the amount of people that are coming in like they do at jewelry stores—these businesses need a similar model that retailers with high-end products have. In some higher crime areas, you may even have to hire a security guard.”
Vandalism, from smash-and-grab types of crimes, has occurred so often at AMV stores in recent years that Salaymeh says he has a toolkit in his garage ready to go at a moment’s notice with everything needed to board up a store. He says he involuntarily became an expert at it. Salaymeh says that while it is rare for AMV stores to alter operating hours, it is a tactic they have used in the past. He says that having at least two staff members at all times in some locations, installing security cameras and other security measures are the primary tools store owners have in their arsenal to help deter crime.
“Security cameras help us at least get the story behind what happened and potentially pictures of the thieves. We also try to limit the access potential thieves have to valuable product … and we’ve tried to keep the lights on after hours so that people can actually see that these products aren’t lying around or in display cases,” he says. “We leave the register drawer open so that people, when they walk up, they see there’s no cash.”
Another unintended consequence of overzealous taxation and regulation is the impact it has on local law enforcement, according to Marianos. He says enacting some of these rules are, in effect, giving police more work to do in terms of harassment violations that have no teeth instead of fighting real crime.
“Instead of being able to work on what they should be working on—to serve and protect—are we going to be calling the police because someone is vaping a flavor?” he asks. “What is law enforcement going to do with all this nonsense? What are they going to charge the guy with? What is the crime? Do you know what I mean? It becomes an hour and a half just sitting around trying to figure out what we’re going to do here.”
During his interview with Vapor Voice, Salaymeh’s phone rang. It was the security firm ADT. One of the Kure stores had an alarm going off. He said it happens multiple times a week. There is insurance available for specialty shops, but both Cavanaugh and Salaymeh say it is expensive. The deductible is often higher than the amount of damage suffered during a crime. Both say they rarely, if ever, claim any damages with their insurance companies.
Credit: Tulsa Police
Another overlooked result of rising crimes in these specialty sectors is the impact on the economy and the lives of employees. Cavanaugh said that crime has forced him to shutter two stores, and he now struggles to keep the doors open in his remaining location. Increases in crime, overregulation and misinformation concerning the health and safety of vaping, and the causes (illegal THC vaping products) of e-cigarette or vaping use-associated lung injury have been too much to bear.
“We are doing our best to deal with the reality of today’s vaping industry,” Cavanaugh said. “I want to keep my doors open, and people depend on us; that’s important.”
Salaymeh says he had to close some stores during the Covid-19 pandemic, some of which were temporary. The closures weren’t all crime-related, he explains, but most of them were. There was a period when stores were not allowed to be open, so burglaries were happening, and stores couldn’t sell anything to try to recover losses. “We’re trying to keep people employed. The height of the pandemic was a very, very, very difficult time for our company and many companies like us. The primary victims of these senseless crimes are the people who don’t have a job to go back to because I shut down 18 stores during that time,” he says. “Think about that.”
Sales of cigarettes in South Korea were flat from 2020 to 2021 but demand for electronic cigarettes rose amid the protracted pandemic, reports the Yonhap News Agency, citing data from the finance ministry.
South Korean smokers purchased 3.59 billion 20-cigarette packs in 2021, similar to the number logged the previous year, according to the Ministry of Economy and Finance.
Sales of traditional cigarettes fell 2 percent on-year to 3.15 billion packs last year, while those of heat-not-burn tobacco products rose 17.1 percent to 440 million packs.
Compared with 2014, however, cigarette sales declined 17.7 percent last year—a development the government attributed to rising prices and anti-smoking campaigns.
In January 2015, South Korea increased cigarette prices by 80 percent to KRW4,500 ($3.72). The next year, the government required tobacco companies to print graphic images depicting the harmful effects of smoking on the upper part of cigarette packs.
As of 2020, the smoking rate among Korean men aged 19 or older dropped to a record low of 34 percent, down 1.7 percentage points from a year earlier, according to the health ministry.
Australian retail representative groups say an overhaul of vaping rules and regulations, alongside a crackdown on the supply of such products to minors, is necessary. The Australian Association of Convenience Stores (AACS), the Master Grocers Association (MGA), and the Australian Lottery and Newsagents Association (ALNA), released a joint statement criticizing the Commonwealth Government’s policy on vapes, claiming it is misguided, poorly designed, and failing the community.
Theo Foukkare, CEO AACS, said although the representative groups disagree with the current prescription model, they do not condone outlets disregarding the law and selling nicotine vaping products to anyone, especially children, according to a story in Convenience and Impulse Retailing.
“We are urging the federal government to consider an overhaul of vaping regulations as a matter of urgency, bringing us into line with the UK and New Zealand where adults – and only adults – can access vapes to help them quit smoking. But in the meantime, urgent enforcement action is needed against those supplying vapes to children,” he said.
The call for a crackdown on the supply of vapes to children comes following widespread reports of use of vapes in Queensland schools. “We would welcome a crackdown on those that are supplying vaping products to children, whether that’s online platforms like Facebook Marketplace or rogue bricks and mortar traders.
“It is clear that not enough is being done to prevent unscrupulous store owners and dodgy online retailers from selling all kinds of vaping products containing mysterious cocktails of ingredients to teens,” he said. The associations also noted an influx of ‘pop-up shops’ selling illicit tobacco products across south east Queensland over the last 18 months, with the majority also selling nicotine vapes. “These are clearly irresponsible retailers who should not be permitted to sell any tobacco of vaping products.”
A proposed solution could be the introduction of a low-cost licensing scheme in Queensland allowing only responsible retailers to deal in tobacco products and would provide a mechanism to shut down and punish those operating outside the law.
Phillips & King International has announced its new brand identity and a forthcoming new wholesale e-commerce platform. Part of the rebranding effort includes a contemporary refinement of the company’s “shield and knight” badge. The new Phillips & King logo “signifies its mission to modernize the business, while paying homage to the equity earned over their 116-year heritage,” according to a press release.
The distribution company was founded in 1906 and has a long, successful history serving independent and small chain convenience, tobacco, and liquor retailers across the United States. The announcement details the company’s move towards a complete digital transformation of its business to “better serve the evolving needs of its retail customers and brand partners.” Throughout 2022, the company will be launching a host of enhancements to its business, including a the web platform expected to launch in early Q2.
The new platform is expected to make it easier for stores to discover and stock the products that consumers struggle to find elsewhere on the market. Phillips & King will also be expanding its product and category assortment to give emerging brands the ability to reach more buyers— and give stores access to new products coming to market, according to the release.
“The future of B2B wholesale commerce is both digital and highly-personalized,” says Jason Carignan, president of Phillips & King. “Our new web platform will enable us to more easily connect buyers and sellers across the industry and offer a more expansive array of products and categories- all while improving the personal connection our sales teams have with customers. We believe that retailers should be able to manage their entire business with ease from their mobile device and have access to business intelligence— and expert guidance— that helps drive inventory-buying decisions. This new platform is the first step in our quest to helping stores thrive in the new retail reality.”
Phillips & King, a subsidiary of Kretek International.
Thee market-share gap between the top-selling U.S. electronic cigarettes remained unchanged with both having a slight decline in the latest Nielsen analysis of convenience store data. The report covers the four-week period ending Dec. 18, according to the Winston-Salem Journal.
Nielsen determined No. 1 Juul was at 37.6 percent, down from 38.2 percent in the previous report.
Meanwhile, the Vuse brand of R.J. Reynolds Vapor Co. had a 33.5 percent market share, down from 34 percent in the previous report. NJoy was at 3 percent, unchanged from the previous report, while Fontem Ventures’ blu eCigs was at 2.3 percent, down from 2.4 percent.
Overall, sales of electronic cigarettes were up 4.8 percent year over year for the latest four-week period, boosted by recent price hikes. Still, e-cigarette sales overall have slumped since February 2020, when the Food and Drug Administration implemented its latest round of heightened regulations on the products.
Those restrictions foremost required manufacturers of cartridge-based e-cigarettes, such as Juul Labs Inc., Reynolds Vapor, NJoy and Fontem, to stop making, distributing and selling “unauthorized flavorings” in February 2021, or risk enforcement actions.
Goldman Sachs analyst Bonnie Herzog said another factor in the slump is “the impact of e-cigarette market denial orders by the FDA as it continues to work through premarket tobacco applications.”
E-liquid manufacturers and retailers are still figuring out how to survive the FDA’s erratic regulatory rules.
By Maria Verven
The vaping industry has been in a downward spiral ever since the U.S. Food and Drug Administration began issuing marketing denial orders (MDOs) for electronic nicotine-delivery system (ENDS) products. When a product with a premarket tobacco product application (PMTA) receives an MDO, it must immediately be pulled from store shelves and removed from the market.
The FDA has issued MDOs for nearly all the approximately 6.7 million PMTAs it received. At press time, the agency was still reviewing an estimated 80,000 products, according to Mitch Zeller, director of the FDA’s Center for Tobacco Products (see “From Chance to Change,” page ?). To date, only Phillip Morris International’s IQOS device and Heatsticks and R.J. Reynolds Vapor Co.’s Vuse Solo, along with two tobacco-flavored pod cartridges, have received marketing granted orders.
The FDA also rescinded or was ordered by a court to stay at least 10 MDOs. This has caused a massive amount of confusion in the industry, especially for vape shop owners and vapor distributors who are struggling to keep only legal products on their store shelves.
Complicating matters, many manufacturers have started using synthetic nicotine in their flavored vaping products and products that had otherwise received an MDO. Synthetic nicotine is in a regulatory void as it isn’t yet being regulated at the federal level, although the FDA has stated it may be considered a component of an e-cigarette, which would put synthetic nicotine under its purview.
Many ENDS business owners say that the industry is also still suffering from the 2019 e-cigarette or vaping use-associated lung injury (EVALI) crisis that was wrongly blamed on nicotine vaping products by the FDA and the U.S. Centers for Disease Control and Prevention. It took more than a year for both government entities to state publicly that the true culprits behind EVALI were illegal THC-based vaping products. Vapor business owners must also combat the never-ending amount of misinformation that is broadcast by anti-vaping groups and the mass media.
Business owners, additionally, have major concerns about the current nicotine tax in President Joe Biden’s Build Back Better Act (as of this writing, the bill was still in the Senate). The current version of the nicotine tax applies only to vaping products and nicotine pouches. The government would tax nicotine bought by manufacturers at the rate of $50.33 per 1,810 mg of nicotine—or 2.8 cents/mg if the bill passes with the tax included.
To get a better understanding of what is happening at the street level in the ENDS industry,Vapor Voice asked a group of manufacturers, retailers and industry leaders about their experience with the FDA and how the agency’s regulatory actions have impacted their businesses.
Vapor Voice: How have the FDA’s marketing denial orders affected your business?
Char Owen
Char Owen, vice president of American Vapor Manufacturer:I think the negative PR around vaping has caused sales to stagnate for most manufacturers and vapor shops. It has also increased the smoking rates for the first time in many years. It’s heartbreaking for us to watch people revert to smoking again.
Unfortunately, most of the industry has changed to synthetic. Over 95 percent of our sales are flavored e-liquid, and with others switching, there was no choice but to switch. We only manufacture open system e-liquids in many flavors, all created from nontobacco-derived nicotine. Our biggest selling products have always been fruit flavors.
We are trying to bring in new products, such as botanicals, that can help our customers with cravings but remove nicotine from the equation. For us, it has always been about harm reduction, nothing more.
Schell Hamel, president of The Vapor Bar:Sales were affected long before the MDO was received. This down spiral began with the media attacking all vapor products as killing people when they clearly knew it was illegal THC products and the entire vapor industry handcuffed to Juul’s reputation.
According to the MDO, all products made in our lab were denied. It seemed as if they used a rubber stamp to deny anything submitted, all without review. I heard them doing similarly across the industry, then approving Vuse.
Schell Hamel
Jay Oku, business development at Five Pawns:Hundreds if not thousands of customers have been adversely affected from these misguided PMTA, sale and shipping regulations.
We had been developing products to maximize harm reduction for years and were always fascinated with the cleanliness (free of nitrosamines) and the molecular merits of synthetic nicotine. We switched all of our domestic products to synthetic nicotine mid-2020. We are grateful to have maintained our sales volume through 2021.
We saw an increase in overall sales since making the switch to nontobacco-derived nicotine, yet we’ve also seen a longer sales cycle with new accounts due to the number of MDO products that companies are selling through to make room on their shelves. Despite a slight increase in gross sales, net numbers are relatively flat due to the increase in manufacturing and shipping costs in 2021.
Trent Bohl, owner of EZJ Rolling Equipment and Smokey Joes West:It’s logistically added challenges, and the horizon looks like a tough road ahead. While many Juice manufacturers have shifted gears to get into compliance, the shift toward disposables and the future ban of them will be tough for Vape as a whole.
From recent headlines, it seems the FDA doesn’t seem to play well unless you are Big Tobacco.
Do you think there’s a growing black market of products that are no longer legal?
Owen: I absolutely know there is a growing black market. A quick Twitter or Instagram search proves that. So far, those black market dealers have not been targeted by the FDA. Only registered manufacturers have been on their radar.
We need to support and grow the harm reduction industry instead of growing a black market. For harm reduction to be successful, it must be regulated and supported by our federal bodies. Without their support, we risk creating a dangerous environment for consumers. I have a great amount of respect for the U.K. in recognizing this.
Oku: Every day the black market continues to grow. The attrition of retailers, manufacturers and distributors is being caused by excessive rogue state taxation, the PACT Act that complicates accounting and reporting, and misguided government overreach that results in flavor bans.
Jay Oku
Numerous disposable manufacturers are selling mass quantities of vapor products through back doors. Some of these black market brands push immature non-lab-produced concoctions with cartoons on their labels. These regulations push people who benefit from tobacco harm reduction technology to inferior products and even worse, back to cigarettes.
Bohl: I have stores in New Mexico, and in Mexico, which outright banned vapes. The black market is huge in Mexico; any low-dollar mercado or corner OXXO seems to have them. The USA will follow suit I suspect, given the demand for vape. When one reflects on how the black market vape cannabis carts disrupted the industry and damaged lives and harmed the reputation of the industry, it’s just going to be that times 10.
What has been your experience with FDA inspections?
Owen: Personally, I had a good inspector, but it truly is the luck of the draw, and it hasn’t been the case for everyone. In my case, he was only there to find proof of manufacturing of any MDO products, and his paperwork was written to support that. My batching logs were not reviewed nor my manufacturing practices.
One member had their inspector show up at 7 p.m. on Halloween. Another member had the FDA come to her home and photograph her home office instead of her manufacturing establishment. He then took photographs of her neighbor’s home. There were instances where the inspector pressured staff when owners or managers were not present to make MDO’d products and then sent warning letters.
The American Vapor Manufacturer is usually involved in a warning letter meeting every couple of weeks. We even help nonmembers with those. It’s a very tricky process, and it’s good to have someone there who can be objective and help both the FDA and the manufacturer resolve the matter.
Trent Bohl
Bohl: I haven’t seen them from this industry perspective, but from the agricultural side and medical marijuana side, one thought comes to mind: brutal for some, not bad for others.
What ultimately will result from these MDOs?
Owen: What the FDA did was extremely arbitrary and capricious. I feel that anyone who can afford to challenge them in court will be able to prove that. My concern is for all the small businesses that cannot afford to do that.
If something doesn’t change, you will see manufacturers close and smoking rates rise. In almost all industries except vaping, small business is celebrated. This is a shame because those small shops are the ones with the hearts for harm reduction.
To lose those small businesses would be a devastating blow to the effort in moving this country to becoming smoke-free.
Oku: I am optimistic that the FDA will reconsider or rescind MDOs and revise their outdated ambiguous and debilitatingly cost-prohibitive PMTA process.
Since 2016, FDA action against the industry has resulted in warning letters and fines to those breaking the rules, yet there’s little to no enforcement. Many MDO products are being sold since there was an enormous glut of inventory in preparation for the September 2021 ruling.
There will invariably be an increase in synthetic nicotine products until those, too, are regulated out of the market.
Congress has been slipping anti-vaping bills into much larger spending packages, such as during the 2019 holiday break deep in the Omnibus Spending Bill. These bills implement devastating regulations that put our industry and the health of our customers in jeopardy.
Bohl: The goal stated by the FDA 15 years back was the end of combustibles. Vape could have helped that. I am buying a decent stock, fearing the day one more freedom is taken away in the name of safety.
The original “Vaping Vamp,” Maria Verven owns Verve Communications, a PR and marketing firm specializing in the vapor industry.
VapeX in Split, Croatia recently celebrated 10 years of helping smokers switch.
By Norm Bour
When people want to know about the European vape industry, they normally refer to the Big Three countries: France, Germany and Italy. Let’s face it—these are also the most populated EU nations and most popular tourism destinations, and even though they are “over there,” many Americans consider them just foreign versions of America. And let’s not talk about the United Kingdom, which is trying to find its own place in the world post-Brexit …
Europe consists of 44 countries, per the United Nations, though some are debatable since they straddle Europe as well as Asia. Eastern Europe, which encompasses many of the formerly Soviet bloc nations that abandoned communism in the early 1990s, is in a class by itself since they are not quite as economically developed as Western Europe, though they are picking up speed.
Eastern Europe, specifically Croatia, from where I am writing this report, is part of the world I love the most. And they do have vape shops, as well as CBD shops, so I wanted to get a snapshot of the vape space over here.
We were lucky enough to find VapeX right up the street from where I am staying, the oldest vape shop in Split, and probably one of the oldest ones in Croatia since it just celebrated its 10-year anniversary last year. That puts them in the olden days, even compared to many U.S. shops.
Owner Igor Eberhardt, 51, has as much passion for vaping as anyone I’ve ever met. Like many, he is not a vaper, nor was he a smoker; he is a guy with deep convictions about the benefits of vape as a smoking cessation device.
VapeX was started in 2010 by Teo Dogas, a former professional water polo star who was part of the Croatia National team that won the World Championship in 2007. One of its sponsors was a brand new vape liquid company, Ovale, from Italy, and when Dogas ended his career, Ovale offered him a job.
Though Dogas was not a smoker, he did believe in the benefits of vaping, so he opened this shop in Split, which initially sold only Ovale liquid. It was the first vape shop in Split and probably one of the first in Croatia if not in all of Eastern Europe.
Dogas later brought Eberhardt in as a partner, and a few years ago another partner, Mark Williams, joined them. Williams, who came from the U.K. vape scene, brought in a whole new dynamic, and they started carrying other liquids from around the world.
Over the years, they have attempted to open other locations, but onerous regulations in Croatia made it challenging. They still also have a shop and distro in the U.K. “We are not treated equally here in Split,” Eberhardt said. “While most businesses can operate freely and openly, we must keep our windows covered with a film that almost makes us look like a sex shop. We also have to cover our shelves occasionally, which takes away the beauty of our selections.”
The company did not receive assistance during the Covid-19 pandemic either. “Many, if not most businesses here, were given some breaks to help them through the pandemic, but we were not. We got no tax benefits, no compensation, and we were shunned, along with just a few industries, like casinos, which also got no help.”
He also mentioned that the Croatian government, like most governments worldwide, views his operation as a tobacco shop, which never gets much respect or help. The problem here, like in many European countries, is that smoking and tobacco are part of the culture, the heritage. The smoking population is slow to adapt since many have been smoking since childhood with the total acceptance of their parents and family.
Of course, this is not just a European legacy but is prevalent in the Middle East, parts of the Far East and Latin America too. Old habits die hard, and it may take generations for vaping to equal or surpass tobacco usage in Croatia.
I asked about the company’s clientele, who are generally middle-aged and split almost equally between male and female, but he confessed, “Women seem to be more open to alternatives, and they are starting to understand that smoking is not sexy anymore.”
As an unmarried man, Eberhardt personally chooses not to date smokers and tries to share his passion for vaping with them.
“The problem is, most Croatian smokers are not aware of the dangers—or of the alternatives,” he shared, “and most don’t care. In many cases, people don’t want to talk about the dangers of smoking, almost as though they don’t want to admit that they have been ignorant of the health risks.”
This sounds like a don’t ask/don’t tell mindset, and even after sharing with his customers that smoking is five times more expensive, that does not always sway them. Partner Williams, in addition to the new product mix, also brought along new education.
The shop formerly got most of its inventory from the U.K., but that country’s departure from the EU has complicated trade, so now it imports from other countries, especially from Malaysia and the Far East.
As for the company’s brands mix, it proudly carries about seven of the top 10 international flavors and usually sees American e-liquid brand Glas as its top seller followed by Fizzy Juice and Empire Brew, which are all fruit flavors. That has been a noteworthy trend to the VapeX owners as fruity flavors have replaced tobacco flavors, and for now, all are legal.
Other bestselling brands in the shop are Dinner Lady, Pachamama, Charlie’s Chalk Dust and Don Cristo, a premium Canadian tobacco flavor. VapeX also specializes in short-fills and is an exclusive distributor of the popular Mr. Vape brand.
Croatian vape shops have been growing quickly over the past few years, and to stay ahead of the crowd, VapeX plans to open a lounge where people can hang out and get educated, according to Dogas.
We talked about “other products,” and he confirmed that cannabis is still illegal, though CBD is not. But the company carries only a few bottles of liquid while the local CBD-only shop stays away from vape products. It seems they have set an agreeable compromise and avoid each other’s turf.
The future looks promising for Split’s largest vape shop. It adheres to the EU Tobacco Product Directive (TPD) regulations, as does the rest of the EU and U.K., and they all operate on the same level ground. The owner’s hope is that TPD opens up the market even more and that the Croatian government finally recognizes what a benefit vaping offers over tobacco.
Norm Bour is the founder of VapeMentors and works with vape businesses worldwide. He can be reached at norm@VapeMentors.com.
Vuse is now only 4.2 percent of the market behind Juul. According to a Nielsen analysis of convenience store data, covering the four-week period ending Dec. 4, Juul was at 38.2 percent, down from 38.8 percent in the previous report. Vuse, however, held steady with 34 percent of the market.
Credit: Overland Park Vape Shop
NJoy was at 3 percent, unchanged from the previous report, while Fontem Ventures’ blu eCigs was at 2.4 percent, also unchanged, according to a Winston-Salem Journalreport. Overall, sales of electronic cigarettes were up 6.7 percent year over year for the latest four-week period, boosted by recent price hikes.
Juul’s four-week dollar sales have dropped from a 50.2 percent increase in the Aug. 10, 2019, report to a 9.7 percent decline in the latest report. By comparison, Reynolds’ Vuse was up 50.1 percent in the latest report, while No. 3 NJoy was down 23.2 percent and No. 4 blu eCigs down 13.8 percent.
Goldman Sachs analyst Bonnie Herzog has said that NJoy “refutes Nielsen’s data and methodology.”
On Oct. 12, the FDA issued a landmark ruling in approving a Vuse Solo product as appropriate to market to smokers from a public-health standpoint. The FDA’s order covers the tobacco flavor of the Vuse Solo closed electronic nicotine delivery system, its power unit and two replacement cartridges.
However, the FDA rejected submissions for 10 flavored Vuse Solo products. It said it “is still evaluating” the company’s application for menthol-flavored products for Vuse Solo.
Reynolds has said the FDA’s orders “confirm that Vuse Solo products are appropriate for the protection of the public health, underscoring years of scientific study and research dedicated to ensuring that adult nicotine consumers age 21+ have access to innovative and potentially less harmful alternatives to traditional tobacco products.”
The vapor industry has experienced growth after Covid-19 lockdowns sent many back to cigarettes.
By Timothy S. Donahue
After declines in 2019 and 2020, the vapor industry has grown 10-15 percent in 2021. Don Burke, senior vice president of Management Science Associates, speaking on a panel during the first day of TMA’s “From Chance to Change” webinar on No. 17, said that he expects the industry to continue its growth into 2022.
“Vapor cartridges were up by 18.5 percent. Over … 2019 going into 2020, we were seeing some declines in vapor. One of the things to keep in mind is at the end of 2019 was that illegal THC vaping [EVALI] crisis,” said Burke. “That turned a lot of people off of vapor, even though it was only an illegal product that caused the issues. No legitimate product caused any problems. It’s about a year-and-a-half now since that occurred … because of that, consumers are starting to forget, vapor is coming back.”
Burke said disposables, because they’re allowed to have flavors, were up 28.9 percent and all-in-one kit volumes are growing (up 2.9 percent). He said vape shop and tobacco outlet sales are also on the rise after many closed or limited hours due to the Covid pandemic. He said his research includes approximately 300,000 stores. It does not include vape shop sales.
“We’re looking at distributor to shipment retail data. In many cases, that’s important because a lot of the convenience stores and some tobacco outlets do not collect their data and, therefore it’s very difficult to get a clean read,” he said. “The convenience channel – because they were considered essential businesses in most parts of the US – managed to survive the pandemic and in fact, now are a larger percentage of stores in the US. Also, 71 percent of tobacco volume goes through convenience stores.”
Burke said pods for closed-pod systems (cartridges) are up 6 percent in the most recent quarter. He said that during the third quarter of 2021 disposables continue to have strong sales, rising by 21 percent and he expects those trends to continue. E-liquid distribution fell by 49.6 percent through 2020 and into current 2021 and sales fell nearly 15 percent, mostly due to recent regulatory action in the US.
Burke also said cannabis sales grew significantly during 2020 and into 2021, but he didn’t elaborate.
For more on this session from TMA 2021 read the next issue of Vapor Voice coming in mid-December.
