Local e-cigarette shops wreathed in haze of regulatory uncertainty

Sellers of nicotine-vapour devices, supplies caught in legal limbo

Stacey White and Brendan Darby, owners of Thunderbird Vapes, had a tricky time getting insurance when they first set up their e-cigarette shop on West Broadway | Chung Chow

Just three doors over from Sunrise Wellness medical marijuana dispensary on West Broadway is one of the latest of a crop of new e-cigarette “vaping” shops to pop up recently in Vancouver.

Less than a year ago, Stacey White and Brendan Darby opened Thunderbird Vapes. It was the husband-and-wife team’s first business venture together.

Here, customers can buy electronic vaping devices – battery-powered alternatives to cigarettes that allow people to inhale nicotine vapour – and e-juices (the nicotine liquid used in the devices) with names like Twelve Monkeys and Blind Pig that come in flavours ranging from mojito to butter-pecan brûlé.

Yet Darby and White might have had an easier time opening a tobacco store or a medical marijuana shop like the one three doors over.

That’s because regulators, landlords, insurance companies, banks and payment processors still aren’t quite sure what to make of the e-cigarette business, which, like medical marijuana, is in a legal vacuum.

The nicotine juices used in vaporizers are not approved for sale by Health Canada. Governments and regulators have, to date, taken a hands-off approach while federal authorities try to come up with new regulations for the industry, which has been booming over the last few years.

“More and more people are switching to vape every day, so the industry is growing so rapidly,” White said. “Absolutely we want regulations.”

One of the first hurdles White and Darby faced when they opened one year ago was finding a landlord who would rent to them. They also had problems finding 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 added. “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 problem the vaping industry faces is the conflicting claims about both health benefits and potential hazards.

“The problem we’re having is a lot of noise,” said Vincent Hornby, 23, one of three partners who co-founded Lucky 8 Vapes in Richmond about a year ago.

In the absence of any long-term studies on the effect on human health, the jury is still out on whether vaping poses a health hazard or is a healthier alternative to smoking.

Some public health and medical organizations have taken a cautionary approach. The Canadian Medical Association wants e-cigarettes banned, pending better scientific data on health effects.

Britain’s public health counterpart, by contrast, recently published a study that is generally favourable towards vaping. Public Health England cited studies that found vaping to be 95% less harmful than smoking cigarettes, and recommended vaping as an effective smoking cessation or harm reduction tool.

The anti-tobacco lobby, meanwhile, has been trying to place vaping in the same camp as smoking.

The one known health concern about vaping is that a child, attracted by candy-scented juices, might drink vape juice containing enough nicotine to cause poisoning. A number of poisonings have been reported in Canada and the U.S. Regulators are therefore considering requiring warning labels on e-juice bottles and childproof caps.

Because many vapers are in their late teens or early 20s, the anti-tobacco lobby warns that vaping could become a gateway to cigarettes.

Older smokers who have taken up vaping see it more as an exit. Many ex-smokers who take up vaping say their smoker’s cough cleared up in days and that they can exercise without getting winded.

The difference between vaping and smoking is that cigarettes contain tobacco and involve combustion, which delivers tar and a whole cocktail of carcinogens to smokers’ lungs. E-cigarettes, however, contain no tobacco and do not involve combustion. Liquids containing water, flavourings, nicotine and a glycerol or propylene glycol base are turned into a vapour through an electrical charge.

At least one Canadian doctor thinks the health benefits of vaping, when compared to smoking, far outweigh any known risks. A recent episode of White Coat, Black Art – a CBC Radio health program hosted by Dr. Brian Goldman – featured an interview with Gopal Bhatnagar, a Canadian cardiac surgeon who co-founded 180 Smoke, a vape shop in Toronto.

After studying all the available medical evidence he could find on e-cigarettes, Bhatnagar became convinced that vaping could be an effective smoking cessation or harm reduction tool for smokers. As far as Bhatnagar is concerned, the jury may still be out on the health effects of vaping, but it is unequivocal on tobacco: it kills his patients.

Although e-cigarettes have been around for about a decade, vaping has really taken off only in the last three or four years, thanks to improved vaping device technology and the quality of e-juice, Hornby said.

So far, the vaping business has been dominated by young entrepreneurs in their 20s and 30s, like Hornby – not surprising given that millennials comprise the biggest market for vaping. But Samuel Boucher, who owns Vancouver e-juice maker Premium Liquid Labs, believes that will change once the e-cigarette industry becomes regulated.

“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 founded Premium Liquid Labs a year ago when he got fed up with what he said is a lot of poor-quality e-juices on the market.

He now employs 29 people in his Vancouver shop and sells his e-juice to 1,500 vape stores in eight countries.

Boucher estimates there are about 1,100 vape stores in Canada, and the numbers continue to grow. At some point, the market may become saturated. But so far, Hornby said business is booming.

“We’ve had a very successful year,” he said. “We’re getting inquiries all the time about people wanting to franchise.”

According to Research and Markets, the global e-cigarette industry is expected to grow to $50 billion over the next 10 years.

Boucher said it’s only a matter of time before the industry becomes regulated, and he estimates that when it does, it could cost e-juice makers $50,000 to $100,000 to have a single line of e-juice pass all the testing needed for U.S. Food and Drug Administration approval.

He thinks that will be good for the e-juice makers in Canada who are already following self-imposed guidelines, which include having their product tested every six months.

“It’s going to weed out a lot of these guys who are making this crappy juice,” Boucher said. “They’re not following any guidelines. People are still getting away with crappy product on the market. Those guys are going to go away eventually.”