Though the FDA finalized the rule extending its regulatory authority over electronic cigarettes, many questions still remain.

By Anne Flint

As a long time buyer of tobacco products, Cumberland Farms finds the current state of electronic cigarettes to be very unsettling.

This has been an important segment for us that has enhanced category margins and allowed Cumberland Farms to further differentiate itself from its competitors.

Our philosophy has been to responsibly sell these products to adult consumers of legal smoking age. Now that the deeming regulations—instituted May 10 by the U.S. Food and Drug Administration (FDA) and which assert control over all tobacco products—have been released, we have significant concerns about how the market will be affected.

CHIEF CONCERNS
For products marketed before Aug. 8, 2016 and not “grandfathered,” the premarket authorization requirements are subject to certain “compliance periods.” Under an FDA compliance policy announced in the final rule, enforcement of the premarket authorization requirement will be delayed depending on the type of premarket authorization submitted. Then the following deadlines will apply:

• Aug. 8, 2017: Deadline for manufacturer to submit and FDA to accept an SE substantial equivalence exemption request.
• Aug. 8, 2018: Deadline for a manufacturer to submit and FDA to accept a Premarket Tobacco Application (PMTA).

If the manufacturer submits and FDA accepts one of the submissions by the deadline stated above, FDA will not take action against that product for one year.

Our number one concern is that it appears nothing substantive will be done for the next two years. This means that whether it is brick-and-mortar competitors or online sellers, those competing retailers can continue to act with impunity for the following 24 months.

Secondarily, it appears that after this two-year window, the process will be incredibly difficult to police online sellers of electronic cigarettes, therefore creating an unlevel playing field against responsible retailers such as Cumberland Farms. We find this odd since, currently, there are regulations restricting the shipment of combustible cigarettes through the mail.

Lastly, Cumberland Farms has a long standing position of working with manufacturers that work with us. By all estimates the cost, experience and timing uniquely benefit a small group of well-funded tobacco companies. This massive restriction in manufacturer options limits our choices, giving the big manufacturers all the power as it pertains to yet another tobacco category.

RESPONSIBLE ACTIONS
We remain committed to this category and consistently meeting our internal goals of responsibly selling tobacco products to adult consumers.

The final regulations are projected to have a significant impact on the electronic cigarettes industry, thanks to a mandate that requires any nicotine delivery devices that hit stores after Feb. 15, 2007, which is the predicate date, to apply retroactively for approval, a costly and lengthy PMTA process.

While it’s hard to be sure, it does appear that the regulations make it harder for open systems to remain on the market. That being said, Cumberland Farms will only partner with manufacturers that can successfully navigate the FDA approval process.

Our company’s overriding concern is that other methods of sale, particularly online sales, will not be effectively policed and the open system consumer will migrate to non-compliant online options.

That said, we believe that retailers such as Cumberland Farms play a critical role in the responsible sales of products intended for adults. Beyond our proven history with age verification we conduct many critical activities. These range from training all new employees on tobacco products to the responsible marketing of these products within our stores.

Finally, we select manufacturers, product lines and importantly specific SKUs that mirror these values.

Our company has been very vocal on these points and encourages all retailers to share their comments or concerns at the local, state and federal regulatory levels.

Anne Flint is the senior category manager of tobacco at Cumberland Farms Inc., one of the first convenience stores to integrate e-cigarettes into its OTP offerings. She is also vice president of National Association of Tobacco Outlets’ Board of Officers.