Booming vape shops in South Florida brace for new rules

Suddenly, vape shops are everywhere. Just about every strip mall in South Florida seems to have one offering assorted battery-powered tubes and an array of colorful bottles of liquid nicotine. Inside, customers puff out fleeting, white clouds of water vapor as they sample the latest flavors — hazelnut coffee, pineapple cheesecake, peanut butter cup or something called Miami vice.

But the booming vaping business is in for a shock. An industry that has operated essentially without rules faces a regulatory upheaval dubbed by some as the “vapocalypse.” After largely ignoring vaping for a decade, the federal Food and Drug Administration is set to roll out a finalized rule this summer that would treat e-cigs just like real cigs. The same mandates that require tobacco products to include health warnings and test ingredients will apply to electronic cigarettes, vaporizers and the liquid nicotine inside.

Critics of vaping, who are particularly concerned about the appeal of candy-flavored nicotine to teens, say regulations are long overdue. But many in the industry fear the costs of meeting FDA approval will shut down the thousands of independent shops selling what they tout as a healthier alternative to cigarettes.

“It’s been the Wild West,” said Benjamin Garcia, owner of Kings Crest Liquid in Hollywood, a maker of flavored nicotine. Some of the mandates will be easy to meet, like slapping health-warning labels on the bottles. It’s the more daunting regulations — testing the liquid inside — that concerns Garcia. The cost for a company to do so is estimated to run from $2 million to $10 million, according to one consulting company cited by the Wall Street Journal.

“A lot of these companies are just going to get swallowed by the bigger guys that have the ability to deal with testing and other reports,” said Jennifer Diaz, a Miami attorney with the firm Becker & Poliakoff, which represents tobacco and e-cig importers.

Where cigarette use has steadily declined, dropping to an all-time low last year, its smokeless cousin is on the rise. From 2012 to 2015, the vaping industry went from an estimated $1 billion to $3.5 billion, according to Wells Fargo Securities, and some business experts speculate it will surpass traditional tobacco in 10 years.

Vaping’s rapid growth hasn’t gone unnoticed by big tobacco companies, which also happen to be some of the biggest supporters of increased FDA regulation of e-cigarettes. It’s their customers who are heading into vape shops, looking for a less harmful and less expensive habit.

Juan Uranga smoked for 15 years before swapping cigarettes for vaping last year when his daughter was born.

“My family mostly died of emphysema, cancer,” said Uranga, who lives in Doral. “It runs in my blood.” He said he went from spending about $60 a month to about $30, but hopes to eventually kick the addiction altogether.

Although the majority of e-cigarettes and vape pen users are ex-smokers, the new school of liquid nicotine draws another new, much younger, crowd. A report released this year by the FDA and Centers for Disease Control and Prevention found that middle and high school kids’ vaping habits tripled in 2014.

Selling e-cigs to minors was outlawed in Florida last year after state Rep. Frank Artiles, a Miami Republican, saw a 12-year-old boy puffing a vape pen at a water park and introduced a bill against underage vaping. Artiles was critical of the FDA, saying the agency “ hasn’t moved fast enough,” and Florida joined 40 other states in requiring identification when purchasing any smokeless products.

Now that the feds are taking action, some see the federal regulations as the beginning of the end. After extending the period for public comment, which required the FDA to review more than 82,000 comments, the agency is on track to publish its final rule in coming months.

A spokesperson for the FDA said deeming vaporizers and e-cigs as tobacco would be “a foundational step” toward possibly stricter regulations down the road, such as child-resistant packaging and public warnings about nicotine exposure. For the agency to impose any further rules, though, more research needs to be done.

Lung specialists at the University of Miami Miller School of Medicine are taking on the task. Matthias Salathe, a professor of molecular and cellular pharmacology, recently received a $2 million grant to study the long-term effects of vaping. Companies have sometimes marketed e-cigs as relatively harmless because they lack some of the most dangerous chemicals in a tobacco cigarette and don’t produce second-hand smoke. But that is overstating things, Salathe said.

“At the present time, inhaling these vapors is considered safe by the general public but there’s not data to state that they are safe,” said Salathe. “In fact, our preliminary data suggests they are not.”

Until substantial findings lead to stricter rules, liquid nicotine makers are doing whatever they can to keep one step ahead of the FDA.

“With anticipation they’re over-compensating,” Garcia said. “Everybody is scrambling to build labs and doing things they’re not sure are even necessary.” Among the estimated 8,000 vape shops in the county, many mix their own liquid nicotine — often called e-juice — resulting in almost custom-made cottage concoctions.

Some of the bigger South Florida players in the emerging industry see the “vapocalypse” as an inevitable part of the business cycle, a shake-up and shake-out of marginal operators.

Aaron LoCascio changed career paths when he smoked his first e-cig in Southern California 10 years ago. Then an accounting student at Central Florida University, LoCascio stopped going to his classes when his one-man business selling e-cigs on Ebay started bringing in more than just beer money. Today his company Vape World employs 100 people and operates in two countries.

“It’s a net positive for our business because those handfuls of people who are just getting involved now, the ‘fly by night people’ ... would essentially go away,” LoCascio said. “We’re a small enough company that we have agility to make changes but we’re a large enough company that we can cope with FDA regulations.”

LoCascio said watching the industry brace for regulation has been entertaining. He’s seen it evolve from the early days when an e-cig was a skinny device with a blue-lit tip that plugged into the wall to recharge. Today LoCascio puffs on a vaporizer “mod” called a DNA 40, with a Kanger subtank mini. It’s called an “open system,” and unlike e-cigs, allows users to customize their experience by altering nicotine levels and taste.

The tobacco and menthol flavors are favored by ex-smokers, while those who start with vaping prefer the candy tastes like grape-Nerds, “Skizzles” or gummy bears. But for critics, those candy options are particularly troubling.

“E-cigarettes are a concern because of the appeal to youth. The colorful packages, flavors, and odorless liquid appeal to teens and children,” said a spokesperson for the Florida Department of Health in an email.

Bryan Marichal manages a Vapor Shark store in Doral. He and his customers take taste preference as seriously as a sommelier sipping chardonnay.

“We start off asking about [customers’] flavor palette — do they like more fruit, custards, creams,” Marichal said. The proposed rule would also make the vape-shop practice of giving out free samples of e-juice illegal, as with any tobacco product.

“Without being able to try the flavors, customers would be taking a shot in the dark,” he said.

WLRN intern Ebony Joseph contributed to this story.

This story was originally published July 26, 2015 at 4:13 PM with the headline "Booming vape shops in South Florida brace for new rules."