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60 Day Extension Policy

From the beginning, June 2015, ATC has maintained that ALL non-compliant eliquid would be banned from sale in Indiana on July 1st, 2016. Even though the law has a gray area, that creates a gap or loophole for eliquids made between July 1st, 2015 and June 30th, 2016. Over the past 18 months, this has been pointed out to ATC by numerous groups and lobbyists. But the ATC had maintained a solid position that it wasn’t a gap.

In early June, lawyers for Hoosier Vapers, after several attempts by myself to get an answer via phone and email, sent a letter to ATC seeking a final written policy on this. They responded again that it was not a gap in compliance dates and their policy would stand.

Since then, we’ve heard from two different groups that during a private meeting with ATC, on Friday June 24th, there was a deal brokered to allow product made between July 1st 2015 and July 1st 2016 to be sold by stores. I have been critical of this deal because it wasn’t in writing and wasn’t coming from ATC. ATC wouldn’t even verbally confirm it to us. I maintained my recommendation to continue the course, as it would be a gamble to continue to sell non-complaint eliquids in this hostile environment. After all, it’s not like we have ever been treated fairly or honestly in this process.

But as of late last night, based off of conversations with trusted sources, reevaluation and analysis of the law, and the scrutiny that legislators now find themselves under… I believe this may be an option for some. I cannot fully endorse it as it is still a gamble. If ATC suddenly decides to enforce the gap…you could be fined and potentially lose your tobacco sales certificate. While the fines are low, there could be hidden fines and punishments as well as each fine can be used to block a certificate’s renewal.

It has also become clear that under the statute, permit holders could not bring a lawsuit against retailers for selling under this gap or non-enforcement policy. BUT, you likely can only sell the stock you currently hold and not reorder additional gap period inventory. Also, the gap does not protect manufacturers from litigation by the permit holders.

This is something that each shop owner will have to weigh for themselves. It is a gamble. You may have to defend yourself at ATC hearings and you could lose. But…the law does have a clear gap period.

 

Evan McMahon, Chairman

Hoosier Vapers Inc.

 

Original Facebook post on “Gap Deal”

Original rebuttal points to “gap deal”:

Here are some of our points of concern:

  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 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 compliant 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.

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