Federal E-Cig Ruling Highlights Danger of Not Preparing for Sensible Cannabis Regulations

“FDA’s approach to nicotine vape approvals serves as a stark reminder of why we must have the right regulatory framework and oversight.”

By Douglas Fischer, ACTIVE™

A recent Fifth U.S. Circuit Court of Appeals opinion on vaping sheds light on why federal cannabis legalization must be accompanied by a sensible regulatory framework that is administered and enforced by the right agency.

The court’s opinion in Wages and White Lion Investment LLC v. Food and Drug Administration excoriates the U.S. Food and Drug Administration (FDA) for its handling of flavored e-cigarettes and underscores the dangers to the public and industry that result from ideological, rather than logical, regulation.

The threat of not plotting out a viable federal regulatory landscape—we know the feds already have their eye on this space—is worrisome for all cannabis businesses and consumers, and particularly the vape sector, which now makes up nearly 25 percent of the market. And the need to set the cannabis industry on a sensible federal regulatory path has only grown more urgent in light of the recent Department of Health and Human Services (HHS) recommendation to move marijuana to Schedule III, a move that increases the likelihood of new federal oversight.

What The Court Said

The court’s ruling arose from FDA’s denial of premarket tobacco product applications (PMTA) for certain flavored vape products. It determined that FDA “sent manufacturers of flavored e-cigarette products on a wild goose chase” by consistently shifting guidance on what would be required for approval of flavored vape products and ultimately raising those requirements to such a high level that the agency effectively imposed a ban.

The court’s decision denounced FDA’s arbitrary and capricious conduct, stating that the agency had not dealt fairly with applicants who “spent untold millions conforming their behavior and their applications to FDA’s say-so.” This ruling casts doubt on FDA’s mass denial of over 1 million PMTAs for flavored vapes, despite substantial evidence concerning those products’ benefit in aiding adult smoking cessation, and myriad steps taken by applicants to minimize the chances that minors could access the products.

Arbitrary And Crushing Regulation

The case exposes how inconsistent and debilitating FDA regulations have been on nicotine vapes. The agency’s constantly changing stance on approval requirements left the legitimate nicotine vape industry in disarray.

Initially, FDA implied that flavored vapes could gain approval with reasonable measures taken for safety and preventing youth access. Not closely bound by statute, the guidance evolved to reject the very types of support it initially said would allow for approval of those products. The result was not only a de facto ban on flavored vapes, but also the decimation of the legitimate nicotine vape industry and the growth of a massive unregulated gray market that is devoid of crucial safety guardrails.

Public Sentiment Against Federal Agencies

The ruling aligns with the current public and Supreme Court sentiment that puts federal agencies, including FDA, under increased scrutiny and skepticism. Recent Supreme Court decisions have dealt blows to federal agency powers, demonstrating that the courts are less inclined to defer to regulatory agencies. Meanwhile, the public’s trust of FDA has also diminished in part due to a number of factors including skepticism (even if not justified) about fast-tracked COVID-19 vaccines.

In light of recent criticisms of the agency, the zeitgeist presents an opportunity for cannabis operators to advocate for a different approach.

The Cost Of Delay

Once you’re in the wrong system, it’s too late. The plaintiffs in the case might have achieved an important victory, but it cannot undo the harm created by FDA’s mass denials. A substantial number of businesses suffered significant financial losses or were forced to shutter, and illegal products continue to proliferate across the market. Moreover, consumers have been funneled into an unregulated market of vapes that has expanded to satisfy consumer demand, which (as with cannabis) persists regardless of legality.

An Alternative To FDA Oversight

State cannabis regulatory systems already impose critical and mostly fair requirements on cannabis vapes that address product safety and prevent youth access. Any additional, arbitrary and burdensome FDA regulations are not only unnecessary but also detrimental because they will deny legitimate products a path to market, and encourage the spread of untested products through unregulated channels. To support the argument for sensible federal regulation, the regulated cannabis industry should also continue its commitment to responsible conduct and voluntarily adopting research-based safety standards.

A more suitable regulatory alternative to FDA, such as the Alcohol and Tobacco Tax and Trade Bureau (TTB), can complement state regulations instead of imposing arbitrary rules. Indeed, this model has been proven effective through TTB’s regulation of alcohol, which is primarily regulated at the state level. No one is concerned about the proliferation of dangerous bathtub gin, because regulations around alcohol are sufficient to ensure safety while not creating such a burden as to shift producers into an illicit market. In contrast, the example of flavored nicotine vapes clearly demonstrates the risks associated with arbitrary and illegal practices that effectively ban legitimate products and lead to a gray market where distinguishing good and bad actors becomes nearly impossible for consumers.

Cannabis Cannot Ignore Federal Regulation

The cannabis industry operates within an ever-changing state regulatory landscape and faces numerous unique challenges, but we cannot afford to ignore what’s soon to come. The Fifth Circuit’s decision highlighting FDA’s dangerous approach to regulation serves as a powerful reminder of the consequences of inaction. It’s time for the cannabis industry to shape its own regulatory destiny.

Douglas Fischer is general counsel for ACTIVE™ (ACTIVE), a vertically integrated manufacturer and distributor of cannabis vaporizer technology. ACTIVE is a founding member of VapeSAFER, the leading unified voice of the cannabis vaping industry.