Unregulated vaping business booming

admin March 4, 2015 Comments Off on Unregulated vaping business booming
Unregulated vaping business booming

A man dressed as a gorilla stood on the corner of College Avenue and Broad Street in Regina a few weeks ago.

He held a sign pointing rush-hour drivers to one of the city’s e-cigarette shops.

The gorilla suit is novel enough, but what’s more of a marvel is how many stores selling e-cigarettes, which electronically vaporizes liquid nicotine for inhalation and is also known as vaping, exist in the city.

“They’re popping up all over,” said Brett Bostick, who opened Planet of the Vapes 9 months ago.

A few years ago, there wasn’t a single store in the city selling e-cigarettes. Now, there are at least five, with many more vaping entrepreneurs operating out of their homes. Most opened within the last year.

Thomas Maier operates Vaping the Way, which opened in the fall.

At first, he was importing the products and selling them to his friends. Then he got busier and busier. Before he knew it, he was looking for a storefront.

“We’re looking at opening up a second store now,” he said.

Much has been made about the health arguments of vaping. Those who advocate on behalf of the e-cigarette are relentless and the stories of how it helps you quit smoking are endless. Research, because of the industry’s infancy, is slim.

Maier isn’t an oddity in the business of vaping. Many of his counterparts got into the business in the same way he did. They used the product, recognized benefits, started selling them to friends, business grew, shops were opened.

Bostick was 21 years old and studying engineering at the University of Regina when he did opened up shop. Business started booming, keeping up with studies got harder, and so he dropped out. Like Maier, he’s making enough money to consider expanding: a second shop is planned to open this spring in Moose Jaw.

One shop owner said he makes about $60,000 in sales every month off of e-cigarettes. A starter kit can be had for as low as $50, but most average out closer to $100.

It’s clear the times are good for vape shops, but it’s less clear how long the good times will roll for the shopkeepers.

Health Canada is pondering regulation, but for now e-cigarettes fall into a grey area. Until that happens, the market is wide open.

“There (are) usually profit opportunities in unregulated markets,” said George Hartner, a University of Regina political scientist.

For now — even as the market in Regina gets saturated with retailers — it’s a relatively low-risk market to enter. That could change when — and at this point, it seems inevitable — regulation comes in.

Most retailers are — and this could be a first — hoping that happens sooner rather than later.

“We want regulation. We want to look more toward the regulations that shops can’t sell to minors, that the juice be regulated. We want to know exactly what’s going into (the products) and that it’s made in a safe environment, clean rooms, things like that,” said Maier.

For now, the industry is self-regulated. While selling e-cigarettes and importing product might get harder with regulation, it will also make it a much more difficult market to enter.

“Regulation does create a barrier to entry and essentially makes it more costly to start that business,” said Hartner. “Once you’re in the industry and you’re selling, you want as many barriers to entry at that point because that helps to ensure you maintain market power.”

For now, that market power appears to rest in the hands of the overnight entrepreneurs who opened up shops in the city before everyone — including regulators — could say “gorilla.”

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