'Earth-shattering' blow to e-smoking industry?

Much of the controversy over electronic smoking focuses on whether health risks are associated with it. But in Indiana much more esoteric concerns could significantly narrow the number of vape shops open in the Hoosier state.

This week the Indiana General Assembly adopted a measure that would increase regulations on manufacturers of e-liquids, the inhaled substance inside the cigarette or vaporizer. In addition to requiring that mixing be done in a clean room and that business owners undergo background checks, the measure also stipulates that manufacturers adhere to rigorous security requirements that some in the industry fear could wind up putting many out of business.

“This has an earth-shattering, industry-killing effect,” said Evan McMahon, chairman of Hoosier Vapers, an industry and consumer advocacy group.

The measure requires a store to apply for a permit by the end of June at a $1,000 cost. As part of that application, a store must enter into a five-year agreement with a security company.

None of that concerns McMahon.

What does concern him is the stipulation that the security company must have at least one employee who is a certified consultant on architectural hardware such as locks and door hinges and one who is a certified technician on rolling steel fire doors. The measure also says those employees must have been on staff for at least a year, which would preclude the possibility that a company could hire a new employee to meet these qualifications.

Only one company in the country, which happens to be in Indiana, fits this bill, McMahon said. That would mean this one company would have de facto control over who could apply for a permit to manufacture e-liquid, McMahon said.

The bill also could prevent Indiana vape shops from selling liquids made out of state by manufacturers that cannot comply with the requirements. Many vape shops, even those that produce their own e-liquids, sell a mix of products made by other manufacturers.

Supporters of the bill, however, say that McMahon’s and others’ complaints stem not from practical complaints but from their distaste for regulation.

Opponents “basically do not want to abide by the law," said Sen. Ron Alting, R-Lafayette, one of the bill's sponsors. "They don’t want to have any oversight, none whatsoever.

"I was in small business my whole life. I didn’t like a lot of the laws that came after my business, but my energy was in complying with the law.”

Alting disputed McMahon’s claim that only one security company, Mulhaupt’s Inc. based in Lafayette, fulfills the bill’s requirement. He said that McMahon and others had no proof that other security companies would not qualify and said there were others, though he did not how many or the names of those companies.

Mulhaupt’s did not return repeated calls for comment.

Shadi Khoury, who owns seven local vape shops and an e-liquid manufacturing facility, said he has called several other companies to find another that meets the bill’s requirements.

“We’re having a tough time trying to find one,” he said. “We’ve looked pretty hard.”

No other state has such stringent regulations. Nor has the federal government charged any of its agencies with oversight of this product.

However, a number of health advocates, including the American Lung Association, have called upon the government to take a closer look at electronic cigarettes.

While industry advocates point to scientific studies that have found the practice is not as bad for one's health as smoking, the rise of these products' popularity among youth concerns many. Studies note that many of these products contain nicotine, which is addictive, as well as other toxic substances.

The lack of government action makes state regulation even more important, bill supporters say.

“This is a very important topic that we got out in front of the federal government on,” Rep. Kevin Mahan, R-Hartford City, said earlier this week as the House debated the bill.

The language on e-liquid manufacturers came as a part of a broad-ranging alcohol and tobacco bill that included increasing alcohol permits in Hamilton and Boone counties and Sunday sales at distilleries. The bill also contains a more controversial purpose to allow development of a party pavilion in the Indiana Dunes State Park.

Supporters say the e-liquid measures stem from a concern about quality control and keeping consumers safe. Often touted as a way to wean oneself off traditional cigarettes, e-cigarettes and vaporizers have grown increasingly popular in recent years. A recent study found that almost 4 percent of adults regularly use the products.

Many manufacturers are working on complying with the law, Alting said. However, he added that not every manufacturer is as careful. Some manufacturers make products in their bathtubs that can then cause detrimental effects in those who use them.

“We’re not dealing with lemonade here. This is stuff that if it’s not done right can be harmful to people,” Alting said. “This is something that needs to be regulated, and it’s something that can be very dangerous if it’s not.”

McMahon does not dispute that additional regulation would lead to increased safety.

Arkansas recently passed restrictions that require manufacturers to register with the state health department, which McMahon said he would not mind to see put in place here.

Nor would he mind if the bill were written in such a way that national security companies such as ADT Corp. or Vanguard Fire & Security System would meet the requirements.

But the law as currently written is not fair, he said.

“This type of requirement is not placed on any other industry in the state of Indiana,” he said.

Hoosier Vapers has a lawsuit pending against the state, saying that the measures would force all but a few manufacturers to leave Indiana.