NASHVILLE, Tenn. (WKRN) — A bipartisan bill aims to regulate the vape industry and protect children in Tennessee, but some vape retailers call it a “big tobacco bill” that would put them out of business.
The proposed legislation would create a universal carding requirement, a 10% tax on “open system” vape products where users add their own liquid to the cartridge, and a ban on products that aren’t FDA-approved or approval pending.
Sen. Ken Yager (R-Kingston), the bill’s Senate sponsor, told reporters several judges in his district are concerned about the youth vaping rate and the safety of the products.
“A lot of these products being sold in these containers are not FDA approved,” Yager said. “In fact, they’re being made in China and sent here, and I just don’t want to see our children poisoned by these toxins that are being imported by the communist Chinese government.”
The bill would also establish a state registry of products that can be sold in Tennessee, which would include the 34 FDA-approved vape products and the 400-some others in the FDA approval pipeline.
“The market is being flooded with illicit vapes that are overwhelmingly manufactured and exported from China,” Rep. David B. Hawk (R-Greeneville), the bill’s House sponsor said.
However, vape industry experts testified to lawmakers the bill would require them to pull 99% of the products they sell off the market and would put them out of business.
“An outright registry and a ban on our products is not proper,” Danny Gillis, president of the TN Smoke Free Association said. “It’s actually a prohibition, and it’s going to cause harm in our state—health harm.”
Gillis argued he has thousands of customers who have used vapes to quit smoking. He said the 34 products currently approved by the FDA are all owned by “big tobacco.” He’s concerned the bill would enable the big tobacco companies to take control of the vape industry, which is meant to reduce harm.
“When they implement such regulation or opposing tax structures, it drives people back to smoking or goes straight into a black market,” Gillis said.
During testimony in the House Government Operations Committee on Monday, March 3, the Tennessee Smoke Free Association (TSFA) argued the products they sell already go through a review process by the FDA.
“The FDA, if they ban products, which they do all the time, they’re taken off distribution. The labs are closed; they stop the imports,” Gillis said. “The FDA is already doing exactly what this registry is trying to accomplish. It is going to be a burden on this state, and it is going to be a burden on stores to try to know what is available to sell, and we’re going to strand our customers to the black market.”
TSFA Vice President Chris Lautz said states that have enacted similar registry legislation suffered negative financial consequences and saw increased smuggling rates.
“Massachusetts was one of the first ones back in 2020. They ended up seeing a $135 million loss in revenue; smuggling went from 19.9% to 37.6%; the state lost an additional $224 million annually,” Lautz said. “California did the same thing in 2023. They’re looking at a $150 to $200 million tax shortfall because of this bill. Alabama, Louisiana, Oklahoma, these are just some of the states that passed this, but every one of these states has had a massive negative impact, not only on taxes, but small business support; a lot of these businesses are closing.”
Lautz told lawmakers Louisiana saw 100-plus store closures after approving a similar registry bill, which represents 25% of vape retailers in the state.
However, Yager called the concern over businesses closing a “false issue.”
“That is not the intention of this bill to put anybody out of business, and under the terms of this bill, it will not put anybody out of business,” Yager said.
Lawmakers pointed out that while Lautz and Gillis are responsible vape retailers who “do it the right way,” that’s not the case for all vape stores in Tennessee.
“For everyone that’s doing it the right way, like these gentlemen, there’s thousands that aren’t doing it the right way, and it’s harming our kids,” Hawk said.
The House version of the bill was rolled to the next Government Operations Committee hearing due to timing issues. Hawk hopes proponents of the proposed legislation will testify at the next hearing, scheduled for March 10.
