The vaping industry has followed the path of most new industries, which is first being championed by smaller producers, entrepreneurs and innovators, and once proven, to receive the financial backing of larger firms. 2018 was a banner year for the industry, which has seen positive guidance from the FDA, positive new legislation allowing commercial hemp production which will benefit producers of CBD oils, and big new investments from major tobacco companies in the vaping industry. Scientific reports pointing to the relative safety of vaping have been abundant this year. All in all, what this means is that 2018 was the year vaping entered the mainstream.
It’s about time. Misinformation about the relative safety of vaping has been widespread, but the science is now coming out – and being reinforced by the FDA, the National Institutes of Health and the American Cancer Society – that vaping is safer than smoking, does not contain the same harmful carcinogens as combustible smoking, and it is useful as a smoking cessation tool.
There is an interesting parallel between the emerging vape industry and the computer and dotcom industries. The tech industry was launched years ago mostly out of dorm rooms, garages and cheap office space by innovators with little backing, and they made something great and transformative to all of society. Today of course, the tech industry is dominated by massive corporations with tens of thousands of employees. And while those large corporations may be less innovative, they do possess the wherewithal to take the industry to the next level.
We’re seeing that same level of transformation today in the vape industry, and two major developments are bringing that industry to a major turning point.
Tobacco giant Altria has seen the handwriting on the wall. Combustible cigarette smoking is down, and people are looking for alternatives. The firm made two big announcements recently; first, they took a major stake in Canadian cannabis company Cronos. Altria also announced that it would take a 35 percent stake in Juul with a $12.8 billion investment. The move is highly strategic for Altria, which along with other Big Tobacco firms, has struggled with more regulatory challenges such as the recent move by the FDAto outlaw menthol cigarettes and flavored cigars.
In a statement from Altria on the investment, the firm said, “We are taking significant action to prepare for a future where adult smokers overwhelmingly choose non-combustible products over cigarettes.” According to the release, the move advances Altria’s goal of long-term tobacco harm reduction, noting that Altria was the first company in the industry to support FDA regulation of tobacco products, and reinforcing the fact that the FDA “distinguishes between the harm associated with combustible versus non-combustible products.”
Another major development in 2018 is the passage of the 2018 Farm Bill, complete with an amendment put forth by Sen. Mitch McConnell (R-Ky)which legalizes the commercial production of hemp. The move does two things: First, it paves the way for expansion of the production and use of hemp-derived CBD oil, and second, it gives a big boost to agriculture in the tobacco states (McConnell’s home state, by the way, produces a lot of tobacco). CBD oil has until now occupied a legal grey area, but the bill will push it into the mainstream. Domestically-produced, hemp-derived CBD oil, which does not contain the psychoactive ingredient THC, is widely acknowledged as a useful treatment for PTSD, alcohol use disorder, chronic pain, opioid addiction, and even Parkinson disease, according to the National Institutes of Health. With the legality of CBD clarified by the bill, major vendors of vaping products like Nug Republic will begin offering the product.
Finally, the FDA’s November 15 guidance acknowledged the importance of e-cigarettes as a smoking cessation tool, and noted that they are safer than combustible cigarettes. This too is a positive step for the vaping industry especially given that it was widely expected that the FDA would ban menthol and flavored vape liquids outright; instead, the guidance will allow stores to continue selling flavored vape products, so long as they are in closed-off areas that are age-restricted.
In all it has been a big year with Altria’s investments in Cronos and Juul, passage of the 2018 Farm Bill legalizing commercial production of hemp, and the FDA’s statement acknowledging the benefits of vaping overcombustible cigarette smoking. The industry is about to get a lot bigger.