Indiana: Advocates Warn of Fool’s Gold

Permit holders can still sue vendors who sell unapproved e-liquids

Indiana Flag

Indiana vendors were shocked Monday to see a copy of an e-mail from a convenience store trade association to its members promising no immediate enforcement of the new e-liquid law that goes into effect July 1. The law prevents sale of e-liquid not made by the six companies that have been granted permits by the state’s Alcohol and Tobacco Commission (ATC).

The letter (seen below), from an employee of the Indiana Grocery and Convenience Store Association (IGCSA) named Joe Lackey, advises the association’s members that enforcement of the rules will be postponed for at least sixty days, in order to give state regulators a chance to study the FDA deeming regulations and “review if a legislative fix is appropriate.”

Indiana E-Liquid Law Paused

Statement from Hoosier Vapers’ Evan McMahon

People shared the letter widely Monday and Tuesday on Facebook and in private communications, and many assumed it was all true. However, Indiana advocates have a lot of concerns. Evan McMahon of Hoosier Vapers — which is leading the legal fight against the state — issued an official statement on the IGCSA letter that was sent to legislators and the news media:

  1. This is not an official policy of ATC. No hearings have been held, or even scheduled, on this policy change. In fact the letter states, “The ATC does not plan to issue a written statement.”
  2. This non-enforcement policy only covers eliquid made between July 1st 2015 and July 1st 2016. How will the retailer prove the date of manufacture?
  3. Non-permit holding manufacturers in Indiana will still have to shut down their operations on June 30th. Non-permit holding manufacturers in Indiana will still be barred from operating in Indiana, even if they will not sell or distribute their non-compliant product within Indiana. Even the FDA says that it will only regulate products intended to be sold within the US.
  4. As of yesterday, Indiana specialty vape shops were being told by the State of Indiana that they needed to have all of their non-complaint eliquid off their shelves by July 1st, or risk losing their Indiana Tobacco Sales Certificate and face stiff fines. They will not be able to get back the money they’ve lost selling off their non-compliant eliquid at drastically reduced rates. Most of these stores have also already ordered and paid for complaint eliquids, at a significantly higher wholesale cost, to restock their shelves by July 1st.
  5. Unless this is an official change in policy codified by the state, permit holders will still be able to seek civil damages from any manufacturer or retailer that is mixing or selling non-compliant eliquid. HB 1432 had a clause that allows permit holders to sue anyone acting out of compliance with the law for damages. So, even if ATC takes an unwritten non-enforcement stance on portions of the law, retailers, manufacturers, and distributors could still be bankrupted by litigation.
  6. ATC should adopt a written policy, with the support of Governor Mike Pence, which puts a permanent and complete hold on the law, including the permitting of eliquid manufacturers, until the courts resolve the degree in which FDA preemption effects the current Indiana law or the legislature address any corrective measures.
  7. In Indiana there are roughly 200 specialty vapor/e-cigarette retailers, 70 e-liquid manufacturers, 15 device manufacturers, and numerous other secondary vaping related businesses. These businesses employ over 3,000 Hoosiers each making an average of $10.50 an hour. We service over 165,000 adult consumers in Indiana, and that number grows every day.

The letter doesn't solve the real problems

While it’s wonderful to finally see mainstream press attention for Indiana — and the resulting worry from legislators and regulators for their reputations — this letter doesn’t solve the real problems. The bottom line is that no one can count on it. The information in the letter appears to come from a personal communication between someone at ATC and the IGCSA’s Lackey.

However, it doesn’t necessarily even matter what the ATC does at that point. The law will be in place July 1 — barring intervention by one of the judges hearing the state and federal lawsuits — and the law does allow the six e-liquid permit holders to sue retailers who sell non-compliant liquid at that point. Since they haven’t been shy about trying to block the lawsuits challenging the new law, there’s no reason to think they won’t act to punish vape shops that ignore the rules.

Jim McDonald
I spend most of my time studying the regulatory, legislative and scientific challenges to vaping, advocating for our right to exist, and talking with others who do the same. Consider me a source for information, and feel free to agree or disagree with anything I say. I love good coffee and sweet Michigan cherries. My childhood hero was Gordie Howe.
  • Michael Abrams

    Could a vape shop sell monthly memberships, which just so happen to include x ml of juice and/or hardware over the course of a month? In othervwords, a face to face version of Zamplebox.

    As for FDA sale intended for within the us, is a transaction from any other country within the us? Assuming online sales don’t go the way of online analog sales. But I think duty free remains legal?

    • Jim McDonald

      Are you referring to Indiana? No sale in Indiana, according to the law that goes into effect July 1 — wherever the product comes from — is legal unless it comes from one of the six companies that have been granted permits by the state.

  • Clementhyme

    Sounds to me, if there does come a day when these ridiculous restrictions are overturned in light of more fact based and rational regulation, there needs to be 6 e-liquid manufacturers boycotted for being such greedy assholes concerning this sad situation….I’m curious as to how these 6 were “chosen” for such lucrative positions? Sounds like a nice little setup for a corrupt system to use as incentives or personal gain for those in the right positions if you ask me.

    • Jim McDonald

      Yeah, I didn’t go deeply into that. But you’re right, there’s curruption in evey corner of this story.