Inside Louisiana’s new vape ban: Smoke shop revenue slashed as law takes effect

Mohamad Nofel spent one afternoon this month removing products from the shelves behind the counter at Deja Vu Smoke Shop on Government Street in Baton Rouge.

The state had just released a list of which vape products retailers were allowed to sell under legislation passed this year. In one corner of his business, which has several locations in the Baton Rouge area, Nofel had covered a wall of banned products with a blue tarp to keep them out of customers’ sight.

“Today I turned away like five, six customers,” Nofel said.

Smoke shop owners across Louisiana say the new restrictions have forced them to pull nearly all disposable vapes from their shelves and have threatened their businesses’ survival – cutting shop revenue by half in some cases.

“Our walls are empty,” said Omar Dawud, who owns the Shreveport-area vape store chain 318 Cloudz. “It’s really affecting me, to the point, right now, I’m thinking of actually moving out of this state…This (business) is what I built from ground zero.”

Some retailers have joined a group called the Louisiana Convenience and Vape Association that has asked the 19^th Judicial District Court in Baton Rouge to grant an injunction that would stop the law. Nofel and Dawud said they are part of the group pursuing the lawsuit. Their case remains pending.

Meanwhile, advocates for the new law, Act 414, have pitched it as a public health measure that would protect young Louisianans amid a nationwide teen vaping epidemic.

“It was designed to protect our youth from access to a product that has been deemed dangerous to their health,” said Ernest Legier, the head of the Office of Alcohol and Tobacco Control. “Flavorings and certain marketing attempts have had a detrimental effect with regard to that goal.”

The law requires vape products sold in Louisiana to have a marketing order from the Food and Drug Administration. Products that have been on the market since 2016 and are under FDA review and products with court-issued stay orders are exempt.

Legier expressed sympathy for impacted business owners; he described the ATC as “pro-business” but said public safety had to come first.

“While I’ve sympathized with businesses that are going to have to adjust…it is something that we’re going to have to live with as a community to be able to accomplish the state’s goal with regards to compliance with state law,” he said.

The registry

On Nov. 10, the Louisiana Office of Alcohol and Tobacco Control released the V.A.P.E. Directory – a registry of which products retailers can sell.

Though the 397-item list may seem long, smoke shop owners say most of the vaping products that they sell aren’t on it.

Dawud, of 318 Cloudz, had been selling 31 brands of vape juice – the liquid that refills rechargeable vaporizers – at his five stores, he said, but only two of them made the V.A.P.E. Directory.

“That’s almost $450,000. That’s a lot of money,” he said of the loss he faces by removing the products.

Dawud said his sales went down 60% after the regulations kicked in, and that he has already had to lay off employees.  

About one-third of the products on the registry are not vapor products, but alternative nicotine products including nicotine pouches, gum and lozenges.

The registry also lists dozens of variations of similar items, including 17 types of Vuse brand e-liquid pods that vary by flavor and nicotine concentration.

The new law was widely expected to result in a ban on flavored disposable vapes. While the registry does include six disposable vape brands, retailers say the handful of products allowed are outdated, hold less vaping liquid and don’t last as long as newer varieties that customers actually want to buy.

Overall, nine brands of vapes are on the registry, including rechargeable devices from JUUL, Vuse, Logic, NJOY and Blu. The latter two brands also had disposable vapes make the list, along with Bidi Sticks, Z Sticks and White Cloud Cigarettes.

The last throwaway vape brand that made the cut, Crossbar, is designed for incarcerated people.

Big tobacco companies own or have stakes in many of the products on the state’s list: Altria, the creator of Marlboro, owns NJOY, while R.J. Reynolds sells Vuse Both companies lobbied for Act 414.

“They want to tell you want to sell and what not to sell,” said Nofel. “It’s like a big, big monopoly.”

Nofel said that brands such as Elf Bars and Esco Bars are far more popular than the ones the state has chosen. But those brands have drawn the ire of regulators due to their kid-friendly, fruity flavors. Despite the FDA’s attempt to crack down on them, thousands are being imported into the U.S.

Impact on customers

The week after Louisiana released its V.A.P.E. Directory, Orese Alford walked into Deja Vu Smoke Shop, hoping to buy a vape.

But “the ones that I do normally use, none of them were on the shelves,” Alford said. He had forgotten about the new regulations, he said.

Alford smoked cigarettes for years, he said, and vaping helped him quit. The state’s crackdown on vape products will pose problems for him, he said, though he plans to adjust by switching to sugar-free candy.

The law will “cause quite a tizzy, and I think it’s going to make the sale prices for cigarettes go back up,” Alford said. “More people are going to start buying cigarettes again.”

On a recent afternoon at Fly High Smoke Shop, another Baton Rouge store, sales associate Phill Oso said he hardly had any customers all day.

“We’ve been open since 10 a.m. and I’ve had two customers who bought something,” he said, calling vapes “our main money source.”

In some cases, customers grew upset when the store wouldn’t sell them vapes, Oso said.

“I had a customer come in on camera and threaten to kill herself if I didn’t sell her a vape,” he said.

Oso wished lawmakers had considered alternatives to Act 414.

“I feel like there could have been other ways to regulate or keep the kids from getting them,” Oso said. “But Louisiana’s a drastic state.”

Questions about tax revenue

At the heart of the court case that could undo the new regulations is the question of whether they violate the Louisiana Constitution.

When lawmakers introduced Act 414, it did not include any restrictions on selling vape products. Instead, it simply raised the tax on them, earmarking the additional revenue for state troopers’ salaries.

Retailers argue the registry, which was added to the law through an amendment, eliminates that additional revenue by removing most taxable products from the shelves.

“To create the revenue volume you need for a dedicated tax…you can’t do it with these products,” said Tom Clark, an attorney representing the Louisiana Convenience and Vape Association, which is suing to stop the law.

Their lawsuit argues Act 414 violated a clause in the state constitution prohibiting amendments that are “not germane to the bill as introduced.”  

While he declined to comment directly on the lawsuit, Legier disputed the notion that the state will lose tax revenue.

Before the new law passed, the state likely only collected between 10 and 20 percent of the tax revenue vapor products generated, as most such products were sold by retailers who bought products online and who didn’t register those purchases with the state, convenience store and grocery wholesalers told state lawmakers in legislative committees earlier this year.

Louisiana is now able to collect 100 percent of the tax revenue because it can identify all the legal products coming into the state, Legier said. Act 414 also requires retailers to purchase vape products through a wholesaler with a stamping license.

“I suggest to you that 10% to 20% of an unknown and uncontrollable market is probably less than 100% of a known market,” Legier said.

A spokesperson for the Louisiana State Police, the largest beneficiary of the vape tax revenue stream, declined comment, citing the pending litigation over the vape law.