Vaping crackdown could hurt mom-and-pop vape shops - Entrepreneur Generations

Washington Post map based on Yelp data; click the image to enlarge it.

President Trump's crackdown on vaping could hurt small, independent vape shops, which are "the fastest-growing retail segment of the past decade, as well as the one with the highest share of employees at small businesses," Andrew Van Dam reports for The Washington Post. "Two thirds of vape-shop workers are employed by the 93 percent of businesses with fewer than 10 employees — a higher rate than for any other retail segment."

Tobacconists (the broader category that includes vape shops) have far outgrown other retail segments over the past decade, according to Labor Department data. That's because of vaping shops, according to online review site Yelp; according to Yelp's databases, vape shops have been the fastest-growing large retail segment since the end of 2012. Yelp's data also show that such vape shops are concentrated in the South and the West, with the highest numbers in Nevada and Oklahoma, Van Dam reports.

In response to recent vaping-related deaths and concerns about vaping's appeal to teens, the Trump administration recently announced it will ban all flavored vaping liquids. The governors of Michigan and New York have announced similar bans, which will kick in sooner. "Vape shops in those states are reeling. Customers are racing to stock up on flavored liquids while store owners and employees ponder an uncertain future," Van Dam reports. "Vape juice refills, which e-cigarettes heat to the point of vaporization, make up the bulk of these shops’ businesses, multiple managers said — and their adult customers overwhelmingly prefer flavored options.

Vape shops could be as disproportionately rural as smoking is, since vape shops open to serve existing smokers. A federal ban on flavored vape juice could hit many small-town vape shops hard. Ryan Brown, who manages one such shop in Iron Mountain, Michigan (pop. 7,000), told Van Dam the vape shops are a major source of support for local community events and even helped fix up the disc golf course. If the flavored-juice ban goes through, :"It’s going to affect our town," Brown said. "They rely on mom-and-pop stores to keep these mining towns going when the mines are gone. Imagine how much tax revenue they’re going to lose."

Mom and pop stores could also lose out when the Food and Drug Administration begins requiring approval for vape liquids already on the market, which could cost between $117,000 and $466,000. Expensive regulatory barriers could wipe out small businesses and leave only the largest vaping companies like Juul on the market, Van Dam writes.

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