Vape Shop Owners Face Uphill Battle Thanks to Regulatory Uncertainty
Electronic cigarette shops are popping up all over the world in recent months and most of us just assume these businesses are started like any other. However, vape stores face many challenges thanks to all the uncertainty surrounding ecig regulations. In some cities, it’s easier to open up a tobacco smoke shop than a vaping store.
Stacey White and Brendan Darby, owners of Thunderbird Vapes know all too well the challenges of getting a new ecig store off the ground. They opened their business less than a year ago in Canada and it has been a difficult journey from the start. While it’s easy to market their products, it wasn’t quite so simple to find a landlord or insurance. “We had three insurance brokers working for us for two weeks before they could find something,” Darby said. “They didn’t know what to do with us,” White explained.
Vape shops seem to fall into a loop hole that leaves landlords, insurance agencies, and city officials unsure how to proceed. “We’re not tobacco, we’re not a dispensary. It would have been actually easier to find insurance if we had been a (marijuana) dispensary. We had the same thing with merchant processors. A lot of them just wouldn’t work with us.”
Another big hurdle has been public misconceptions about electronic cigarettes. Vincent Hornby, co-owner of Lucky 8 Vapes, said a lot of people are confused about whether ecigs are safe. “The problem we’re having is a lot of noise,” he said.
To make matters even more complicated, there are no long-term studies about how ecigarettes impact health. Many of the short-term studies have contradictory results. Most health officials have taken a cautious “wait and see” approach to vaping. The Canadian Medical Association has pushed to have ecigs banned until more research is conducted. On the other hand, Public Health England claims that vaping is 95% less harmful than smoking cigarettes and they even recommend ecigs as a path to smoking cessation. In the United States, the FDA has stalled on ecigarette regulations for months.
Despite the many challenges, many business owners and investors are choosing to jump into the vape shop business anyway. Interestingly, the vast majority of today’s vaping entrepreneurs are in the 20-30 year old range. Samuel Boucher, owner of Premium Liquid Labs in Vancouver, said he believes the age gap will be much smaller once older investors see that ecigarettes are here to stay.
“The guys wearing the suits, they don’t realize how much money there is in this,” Boucher said. “But once they see it and once this industry gets regulated, that’s when people will bet their money on it, because right now it’s a high-risk investment.”
Boucher estimates that there are currently around 1,100 vape shops in Canada with more added each month. Hornby said the future is bright as the business is continually growing. “We’ve had a very successful year,” he said. “We’re getting inquiries all the time about people wanting to franchise.”
While opening a vape shop certainly carries some risks, it also carries the potential for a lot of rewards. According to Research and Markets, the ecig industry will likely be valued at $50 billion within the next decade.
How do you think upcoming FDA regulations will impact vape shops in the United States? Will it make it easier for them to conduct business or will it only make things more difficult?