VPZ opened a new store on July 31, its first since Covid-19 lockdowns began. The UK’s largest vaping retailer opened the shop in Bruntsfield, Edinburgh, creating five new jobs.
Headquartered in Newbridge, Edinburgh, VPZ director Doug Mutter said the company has had to adapt to the new way of life following the huge change in the retail landscape.
“We are seeing the biggest change in the retail economy in living memory and we as a company have had to be adapt in what we can offer. We understand that not all of our customers are able to travel to our stores. The High Street is having to adapt to much smaller footfall,” he stated in a release. “That is why we have opened this new store within a more residential area to ensure we can still serve our customers, without requiring them to take excessive travel. We believe this maybe a longer-term change to the marketplace and we are investing and committing to serving local communities as best we can.”
Despite the retail sector facing huge challenges the company are seeing more smokers making the switch, with record numbers of quit attempts in 2020.
“Vaping represents a huge public health opportunity and the market will continue to grow as increasing numbers of smokers recognise its effectiveness in helping people to quit smoking,” stated Mutter. “Consumer education is crucial too and our knowledgeable staff are always available with advice and support that helps make it easy for smokers to make the switch and give up cigarettes once and for all.”
Avail Vapor has partnered with Fresh Farms E-liquids, the parent company of Fruitia, a premier e-liquid company based in southern California. The long-term partnership adds a fruit flavored e-liquid line to the products Avail carries in the 12 states its stores are located.
The offering includes five island-themed flavors: Strawberry Coconut Refresher, Pineapple Citrus Twist, Blood Orange Cactus Cooler, Apple Kiwi Crush and Passion Guava Punch.
“Listening to our customers’ needs and their request for additional fruit flavored e-liquids, we couldn’t be more excited to partner with Fresh Farms to offer these additional product offerings,” said Justin Murphy, vice president of Retail and Marketing Operations at Avail. “Partnering with companies that share our same vision of offering high-quality products is paramount to our success.”
Fruitia products offered by Avail include 60-milliliter, nicotine-based e-liquids bottles and disposable cartridge-based systems.
“Having the ability to further expand our premium, West Coast products across the U.S. made the Avail partnership a natural choice,” said Tony Devincentis, CEO of Fresh Farms E-liquids. “We pride ourselves in sourcing only the highest-grade ingredients using the highest standards of manufacturing.”
Online UK e-liquid store Vapester.co.uk has rebranded itself. The company’s online e-liquid store, which serves customers across the United Kingdom, has moved to a new domain name to coincide with the change.
As a result, Vapester.co.uk customers can now visit the company’s online store at VapeKit.co.uk to shop online for vaping supplies, according to a press release.
“While the company’s name and online address have both changed, the company continues to provide the same great service to customers across the UK, providing convenient access to e-liquids, vape kits, nicotine shots, and everything else a vaper needs to keep on vaping,” the release states. “Existing customers can continue to use their existing accounts, as login details for customer accounts remain the same.”
Los Angeles City Council voted unanimously Wednesday to make numerous changes to its once-flourishing marijuana market. The legislative body gave its initial approval to expand licensing and get more assistance to operators who endured the consequences of the nation’s war on drugs.
Broad legal sales kicked off in California in 2018, and at that time Los Angeles was expected to quickly establish itself as a world-leading cannabis economy, according to an article from the Associated Press. “But that never happened. Instead, robust illegal sales continue to outpace the up-and-down legal market, while businesses complain that hefty taxes and a cumbersome bureaucracy have slowed, rather than encouraged, growth,” the article states.
The new revisions are designed to provide a jump in licenses for so-called “social-equity” applicants. These include individuals, many of color, who were arrested or convicted of a marijuana-related offense, and lower-income residents who live, or have lived, in neighborhoods marked by high marijuana arrest rates.
Only applicants meeting those criteria would be eligible for new retail and delivery licenses through 2025.
The council also seeks to help businesses wanting licenses to quickly get temporary approval to begin operating once certain benchmarks are met. The rules would permit businesses to relocate while being licensed and streamline the application process, according to the article.
Credit: Manish Panghal
If the plan gets final approval by the council, Mayor Eric Garcetti is expected to sign it.
“This is a great opportunity for the city to focus on the expansion of the cannabis industry,” said dispensary owner Jerred Kiloh, who heads the United Cannabis Business Association, a Los Angeles-based industry group, according to the AP article.
Kiloh said the city is on target to eventually double the number of retail businesses, up from 187 now operating. In time, rules allow for as many as 537 dispensaries, he added, though there are also restrictions that limit the number of businesses that can operate in neighborhoods, according to the article.
More legal shops, linked with tougher enforcement, would help in the long-running fight to shut down illicit operators and delivery services that run in plain sight in the city, he added.
But the plan has also been criticized within the industry, with some saying the legal market remains flawed and could get worse.
RELX Technology has launched two new e-cigarettes: Infinity and Essential.
Using independently developed “super smooth performance” technology, both products offer full flavor and “velvety smooth” puffs, according to RELX.
“The Infinity demonstrates our focus on relentless technological innovation,” said RELX CEO Kate Wang. “I’m proud of the entire RELX global team for creating a beautifully designed device with superior technology, and with a dedication to innovation that RELX is now globally known for.”
To ensure leak resistance and high quality, RELX’s engineers tested more than 12,000 Infinity pods. The company has submitted patent applications for more than 50 innovations used in the device. In March 2020, the Infinity was awarded the Red Dot Award: Product Design 2020.
Mountain Service Distributors owner says vapor product sales continue to rise in convenience stores.
By Timothy S. Donahue
Refrigerators didn’t exist when Mountain Service Distributors (MSD) began operating in 1929. Situated in the Catskill Mountains of upstate New York, USA, the family-owned distributing company started as an ice delivery service that added candy sales to its portfolio by pure happenstance. Located near where the famous Woodstock Music Festival was held in 1969, Stephen Altman’s—MSD’s current president—father was operating an ice delivery company when a candy manufacturer in Brooklyn, New York, asked the older Altman if he would sell candy along with the ice.
The business was doing well. Then refrigerators started appearing in homes, and no one needed ice deliveries. Candy became the company’s new cash cow. The company kept adding on more and more products such as chips and soft drinks. MSD’s history reads much like the history of convenience stores themselves. As cars became more reliable, gas stations were closing their repair shops, and MSD started using the empty space to sell supplies to travelers and the local community. As the c-store market grew, so did MSD. Stores needed greater varieties of product, so MSD began to increase the number of SKUs it could deliver.
Stephen Altman
“When I was a kid, we sold candy and tobacco and a lot of potato chips. We also had an ice cream business that when my father passed away, his brother, who was a junior partner, had to make a decision [about] because we had all these insulated iceboxes that we would sell ice cream and dry ice [from]. Now he had to replace 500 iceboxes, and he didn’t want to invest in compressor-driven refrigeration for ice cream. He sold the ice cream business,” says Altman. “Twenty or so years later, I became a Slush Puppie distributor. And now I had to buy hundreds and hundreds of machines that made slush. So, it was an interesting turnaround.”
During the TMA digital conference “Unsteady Ground: Shifting Landscapes,” Altman discussed the c-store industry today and how vapor products have become best sellers.
Vapor Voice: How has Mountain Service Distributors faired during the Covid-19 pandemic?
Steve Altman: We’re a convenience store supplier; the reason is not the tobacco element, but we’re able to stay open because we supply groceries to convenience stores. We have had a few issues. Some of the stores that are customers of ours are not allowed to be open, and we have an [accounts receivable] problem where they closed up and didn’t pay their bills. And we’re working through that issue as well.
What we find interesting is that the c-stores that are open—and most of them are open because they carry food—they’re doing very well because a lot of shoppers are afraid to have their bodies in crowded supermarkets. So, they’re buying a lot of groceries in convenience stores where they never did that before.
What has the growth of Mountain Service Distribution been like?
Well, when I started out here full time in 1962, we didn’t do a million dollars in sales a year … There’s only three ways for my kind of business to grow, and it’s probably [the same] for many other businesses. You either get your customers to sell more product, which is very difficult to do, or you obtain new customers. But the biggest growth comes from when you can buy out another distributor and hope to obtain 75 percent of the business. Over [a] period of years, nothing lately, I’ve bought out seven other distributors.
Looking back, was acquisition the proper way to go about your growth?
Oh, absolutely. Some of these were competitors of ours that we always had a high, I guess, business ethics with each other. We didn’t cut each other’s prices. I gained their trust through keeping to that way of doing business … I just bought their inventory, and I helped them collect their accounts receivable. I hired their people.
How large is the complex where MSD is headquartered?
The complex is, at this time, about 100,000 square feet, with 30-foot ceilings, with forklifts and driving around. When I started, it was an icehouse. The walls were a foot thick, filled with sawdust. It was 40 feet by 100 feet, so, that’s what? 4,000 square feet. Now, it’s 100,000 square feet. We [are now doing approximately over $100 million in sales]. It’s not a lot. I am a medium distributor, but we have … one of the highest percentages of bottom line profits there is in the industry. Most distributors’ bottom line isn’t even 1 percent, and ours is over 3 percent.
How many different types of products do you distribute? How many different pieces?
Well, I think we have about 12,000 SKUs. Cigarettes and tobacco, and confectionery, and health and beauty aids, and sundries, and frozen beverage products and coffee products. And we sure sell a lot of water, which I’m not a fan of because retaining and getting drivers with CDL licenses is very difficult. And I don’t like breaking their back with heavy products like water.
We’re really heavy in electronic cigarettes. We have customers all over the country that my son has created because he’s become an expert in the category. And they range from wholesalers and vape shops and even retail chains. Those chains who buy from mega distributors, they don’t pay attention to the category and help the retailer grow it.
Are you only servicing c-stores and other traditional-type brick-and-mortar retailers?
We do prisons. We do vape shops. We do gift shops. We do pizza parlors. We do beach stores when it comes to frozen beverage. And we have six or seven wholesalers that are steady customers. And as I mentioned earlier, we have some chains, and I try to stay away from chains. I can never figure out how to make a profit on them. But we have some chains. We also serve the four casinos that are in the state of New York, not the Indian casinos, but the casinos that were licensed by the state of New York.
What is the state of the tobacco business in c-stores from your experience?
Well, starting with cigarettes, it’s been declining for years, as you are aware. The electronic cigarettes helped the decline. Lately, in the last few months since the pandemic, we’re selling more cigarettes and less vape. But different [rules] of the states we do business with has precluded the vape business a little bit because of the elimination of flavors … Overall, our vape business is up. Our tobacco business started growing a few years ago [when] roll-your-own became popular as the taxes in the Northeast went up dramatically. That’s still alive and doing well. So, overall, in the last 10 years, tobacco was 80 percent of our business; 80 percent of sales, not 80 percent of the profit. Today, it’s about 70 percent.
What types of vapor products are you selling?
We do very little e-liquid. We were selling both open and closed [systems], but now the closed systems have come under the eyes of legislators, and you know what happened with that. In New York state, it’s about to kick in [a flavor ban] on the 17th of May that only allows tobacco flavors. We found that even when we lost the Juul flavors of creme brulee … I had it take them off the market. I guess the steadfast consumer just switched to those [tobacco flavors]. They didn’t give up Juul. They just switched.
Have you seen an increase in sales of other salt nicotine closed systems, such as Leap and Njoy?
We carry them all. Juul has lost some market clout so to speak, but our Juul business is up because my son has created new Juul customers across the country. So, sometimes something happens in the country that doesn’t affect me, such as the flavor ban.
What are the challenges with distributing vapor products?
We constantly debate with United Parcel Service (UPS) that doesn’t like us shipping these things. Of course, they talk about the suit they’ve lost … but that was about cigarette sales to consumers. We don’t ship to consumers. So, we always have an issue with UPS constantly beating us over the head that we can’t be doing this. And we keep telling them we’re not shipping to consumers and blah, blah, blah. We only ship to people that have licenses to carry and sell the product. We are also having supply chain issues with products coming from China.
What have you seen or what do you believe is the issue with the supply chain? Is it mostly shipping?
Well, I think it’s [because of] the [Covid-19 pandemic] that some of these factories had to close up. But, to tell you the truth, Tim, I don’t worry about it. There’s no lack of some kind of product or a plethora of different brand products in my customers’ stores. There’s no shortage at retail. If they’re out of one brand’s orange, then they could a buy something else orange.
Vapor products are starting to overtake your tobacco products business, is that correct?
Oh, oh, it has. Well, when it started out—when Altria and RJ Reynolds went to [a large distribution company] and said, “We’re coming out with these things. What do you need for margin?” that fixed the margin on their products for us [too]. Of course, [the large distribution company] doesn’t have the expenses of most of the distributors. They have no sales force. They don’t have the expense of taking returns from retailers. But [the profit margins on vapor products] were better than tobacco items.
What is the current state of sales growth for vapor products in c-stores?
Other than the customers we have that we ship [to via] UPS Freight or UPS Ground in other states, I think, in my core, where my salesmen call on customers, it’s flat. There’s no decline. There’s no growth. Listen, different consumers get their news in different sources. And this business that happened a number of months ago where vape gets accused of poisoning kids, [the] recent lung disease outbreak found [it] to be caused by black market THC products when it turned out to be illicit home-packed marijuana sticks. The public got turned off. You know what I mean? They read about the problem, but they didn’t read about what the real problem was. Now you have a lot of apprehensive, potential users of electronic cigarettes that won’t go near them because they still think they’re poison.
How are you looking at future growth?
We are also improving [our technology]. If you get the retailer to put his order in with our app on his phone, then the salesman has more time to consult with him, right? And that’s worked. Half our customers place their own orders on our app on their smartphone, and we’re able to show them how to make more money, and then we become more valuable to them.
The state health department wants to resurrect a ban on flavored e-cigarette sales in Montana. A temporary ban enacted late last year expired several months ago, and now the agency wants to permanently ban the sale of almost all flavored e-cigarette products, according to an article by Montana Public Radio.
Some Montana vape retailers are vowing to push back hard on the idea, leading to what may be the next legal battleground between those retailers and the administration of Gov. Steve Bullock, according to the story.
Last November, Massachusetts became the first to roll out restrictions of all flavored tobacco products, including menthol cigarettes. New York, New Jersey and Rhode Island followed suit this year with bans on the sale of flavored e-cigarettes.
The proposal is being applauded by health officials and excoriated by industry businesses.
“I have a legal product in the state of Montana, a product that helps people,” Deanna Marshall said. “I am not going to stop selling this product.” Deanna and her husband Ron own Freedom Vapes, an independent e-cig retailer with stores in Bozeman, Belgrade and Hamilton.
“They can fine me, arrest me — whatever they have to do,” she said. “I’m going to keep selling it, and we’ll go to court then.” It wouldn’t be the first time the Marshalls and the local trade organization they belong to, the Montana Smoke Free Association, have squared off against the state health department.
Last fall, they sued to block the Bullock administration’s temporary ban on flavored vaping products. A district judge eventually upheld the ban.
The Michigan Senate approved a six-bill package Wednesday that would impose an 18 percent tax on e-liquids. If signed into law, it specifically would allow individuals to sell flavored vaping products.
Gov. Gretchen Whitmer attempted last year to make Michigan the first state in the nation with a ban on flavored vaping products out of concern for youth usage. But the courts eventually paused the ban after businesses filed a legal challenge, according to an article on detroitnews.com.
The new legislative package, which gained the backing of the Republican-controlled Senate, would set up an enforcement and licensing system for shops that sell vaping products.
It would also change the age requirement for buying tobacco and vaping products from 18 years old to 21 in state law. President Donald Trump previously instituted a federal change to increase the age to 21 across the country.
“It’s regulated. It’s enforced,” Senate Minority Leader Jim Ananich, D-Flint, said about the bills, which he said would give adults the “choice one way or another” whether to use the products.
Ananich was one of the sponsors of bills in the package. He said it aimed to resolve a lack of clarity surrounding federal and state policy on vaping in Michigan. The legislation, which doesn’t affect marijuana vaping products, originally aimed to set the tax rate at 24 percent but lawmakers dropped the proposed rate to 18 percent before Wednesday’s vote.
The marijuana market took a big hit last year after consumers of black market THC vaping products started to become ill, often with fatal consequences. As a result, companies have been on high alert, making safety a priority when crafting both nicotine and cannabis vape products, according to an article on Forbes.com.
With Covid-19 still a reality, experts are foreseeing a boom in the vaping market this summer. So, what else do they see in their crystal ball post COVID-19? Find out below. Among those weighing in are Tom Brooksher, CEO of Clear Cannabis Inc; Cortney Smith, CEO and founder of DaVinci; Dan Gardenswartz, chief financial officer of Spherex; and Elizabeth Hogan, vice president of brands at GCH Inc (parent company of Willie’s Remedy and Willie’s Reserve).
The Forbes article expresses that the following Q&A has been edited for conciseness and clarity.
Iris Dorbian: Why do you think the vape market will see a boom in the summer?
Tom Brooksher: Traditionally, summer is a strong season for cannabis sales as people purchase our products to enhance their vacations and time spent outdoors. As restrictions are lifted, we expect a pent-up demand for cannabis products that can be conveniently used in conjunction with outdoor activities. We also expect the phased reopening of tourism in key tourist/cannabis markets, such as Nevada, California, Colorado and Florida, to positively impact vape product sales.
Cortney Smith: Even as we enter an uncertain economy amid a recession, I still believe the vaporizer market has been growing steadily over the past few months and will continue to flourish. If anything, the pandemic has opened more people up to the possibilities of cannabis during a stressful time, and we’ve seen an uptick in new consumers
Elizabeth Hogan: We’re seeing people return to their favorites and stock up on proven winners—vape products included. With the fear of spreading germs, vapes sales will continue to grow as consumers move away from shared joints or bowls. Vapes are less harsh on your throat and lungs than smoking and take effect more immediately than edibles. This summer, it’s going to be a good idea to be prepared and bring your own. We’re sharing in spirit only these days.
Brooksher: We’ve done very well, all things considered. Our sales would have been even stronger in Colorado and Nevada had the pandemic not hit. In general, we’re seeing strong brands – high quality products with name recognition – holding their own or even growing during the pandemic, and weaker brands struggling or potentially failing.
Gardenswartz: We definitely felt some pressure during April and May. We also engaged in aggressive social media messaging to maintain communication with our consumers, as well as daily contact with our dispensary partners in all jurisdictions to mitigate any downward pressure. For vaping specifically, our customers reported a notable shift from typical joints to vape pens, which was largely driven by health and sanitary concerns. They are also cleaner and longer lasting. We don’t see this trend changing anytime soon.
Dorbian: How is your company positioning its vape line in response to the anticipated boom in the vape market?
Brooksher: Perception of value on the part of consumers is always important for cannabis brands and we don’t see that changing. That doesn’t mean cannabis consumers are focused on the cheapest product. They’re willing to pay for a quality product, but only if they perceive that it’s a good value – specifically that it’s safe, will provide a good experience, and matches their needs and preferences.
Smith: We recognize the need for personal vaporizers, especially in a time when cannabis consumers are shifting from a culture of sharing devices to more individual consumption. My team and I also continue to dream up new innovations, because I never want us to rest on our laurels. We’ve spent the past three years developing a new limited-edition iteration of the IQ2, that allows for cooler temperatures, and we’re finally launching it this summer. There’s no time like the present to be innovative and bring new solutions to the public.
Gardenswartz: During the lockdown, we worked aggressively to fine-tune quality control and production efficiency across the company, and those initiatives will benefit us not only this summer, but over the long-term. We view our products as “accessible luxury” – premium products priced at accessible levels. With Spherex, consumers can have the best of both world: the best products out there at very accessible prices.
Hogan: Willie’s Reserve vape line product offering has been expanding over the last year, adding CBD:THC ratio products, collaborations with musicians (Nathaniel Rateliff and Margo Price) and introducing 1-gram cartridges for consumers looking for more value. We have also seen a growing consumer demand for different forms of concentrate in vape cartridges. The combination of distillate and cannabis-derived terpenes is becoming very popular. In response, we launched our new line of live resin craft cartridges in Colorado. The live resin cartridges offer an even more flavorful draw than distillate.
Dorbian: What precautionary measures is your company enacting to ensure the safety of its vape lines?
Brooksher: We were fortunate in that our products were very safe to begin with. We’ve never used vitamin E acetate or any other toxic fillers, and we eliminated the use of MCT oil prior to it becoming an issue. In addition, we only use CCELL ceramic heating cartridges and hardware that are made with food and medical-grade material of the highest quality. As a result, we’ve had zero problems with product safety.
Smith: We’ve always built safety into the very DNA of our devices from the start. Beyond the specific safety measures we’ve taken to protect our employees and maintain best practices throughout the pandemic, we haven’t changed a thing about the device itself. DaVinci devices are created responsibly with clean hardware, with medical-grade components like a zirconia air path and feature an array of safety certifications such as Rohs, FCC and CE.
Gardenswartz: Fortunately, Spherex didn’t experience a notable negative impact from last year’s crisis. Spherex has and will continue to use only the best material, run through the cleanest process, put into the best hardware and packaging, resulting in clean, potent and superior end products. We plan to keep most, if not all, of the precautionary measures we enacted around COVID, even beyond the point that the virus is under control, which could be never.
Hogan: Transparency and cooperation in every direction are the two most important ingredients in safe cannabis. At Willie’s Reserve, we have alway been cognizant of how some negatively view the cannabis industry and our goal is to combat their doubt with clean products and safe procedures. Since this has always been a focus of ours, we have not had to change in wake of last summer’s illicit market issues. Our motive and the motive of some of these illicit market manufacturers are very different and our product quality is a testament to that.
Youth use is a major concern for the vapor industry. RELX Technology today published its first Corporate Social Responsibility (CSR) Report, outlining the concrete steps the company is taking to advance its vision to provide vaping solutions, “while driving operational excellence, managing its social impact and preventing underage use of its products,” according to a press release.
The report provides a comprehensive picture of its CSR activities. Key 2019 highlights, which span a wide range of activities from environmental protection to economic empowerment, include:
RELX opened over 2,500 RELX points of sale and entered over 100,000 retail stores, serving adult consumers in over 40 countries and regions.
In response to the COVID-19 pandemic, the company established a support fund of RMB 20 million and provided other support mechanisms, including sending hand sanitizer and masks to RELX stores and partners all over the world.
RELX has installed ID and facial recognition technology in 80% of stores. The pre-purchase age verification process led RELX to refuse to sell products to 2% of store visitors, after they were found to be under-age.
RELX launched 16 anti-counterfeit cases in 2019, leading to the seizure of over 65,000 counterfeit products.
RELX initiated the “Lighten the Burden on Earth” campaign and recovered over 20,000 empty pods in one month.
The company terminated partnerships with close to 1,800 retail stores, which were located too close to schools.
RELX is on course with its business and sustainability ambitions, delivering on its goal to develop viable alternatives to cigarettes, supporting its local communities in times of crises, all while ensuring its products do not fall in the wrong hands.
