Earlier this month, we informed you that new regulations were imminent for the electronic cigarette (e-cigarette) industry.   The proposed regulations could be released as early as Monday, according to the Unified Agenda and Regulatory Plan issued by the White House in late December 2012.  While the Regulatory Plan did not specifically mention e-cigarettes as being a target industry, the Food and Drug Administration (FDA), which will be issuing and enforcing the regulations, has previously attempted to regulate the industry and not-too-subtly alluded to the fact that it would make another attempt in the near future.  Reinforcing the likelihood of new regulations affecting e-cigarettes is the fact that President Obama has made it known several times in the past few months that increasing tobacco related product regulations is a priority for his second term in office.  President Obama is not alone in this pursuit. Just last week, New York City Mayor Michael Bloomberg announced that convenience stores may soon be banned from openly displaying tobacco products and related paraphernalia.

953900_18128026Possible E-Cigarette Regulations

Using the FDA’s current regulatory framework for tobacco products, implemented under the Family Smoking Prevention and Tobacco Control Act, there are some areas of the e-cigarette industry that may face regulation under current law.  The most damaging potential regulation would require e-cigarette companies to comply with the current substantial equivalence determinations governing cigarette companies.  Essentially, this regulation would require all e-cigarette companies that began operating after 2007 to have their products taken off the market until they demonstrate that they are in compliance with FDA regulations and are substantially equivalent to the other e-cigarette products offered in the marketplace.  Given that almost every e-cigarette company entered the market after 2007, and the notoriously slow process of obtaining equivalency status, complying with this requirement could result in a large time gap in which many e-cigarette brands would not be available to the public.  If any kind of equivalency regulation is enforced or proposed, e-cigarette companies should retain experienced counsel to begin the regulatory compliance and equivalency process as soon as possible.

It is also likely that the FDA will propose advertising and marketing restrictions on e-cigarette companies.  As of right now, e-cigarette companies face little-to-no regulations governing how they market their product(s).  Some of the larger e-cigarette companies are even starting to run major celebrity-endorsed television commercials reminiscent of the cigarette commercials that aired in the 1970s and 1980s, before these practices came under governmental regulation.  E-cigarette companies must become intimately familiar with the advertising and marketing laws regulating their industry or risk facing potential class action lawsuits and investigations by the Federal Trade Commission and state attorneys general.

It should be noted that the announcement of proposed regulations does not necessarily mean that such regulations will be immediately passed into law, as-is.  There will likely be a lengthy public discussion and comment period, which will delay the final draft of the bill from being presented to Congress for a vote.  The foregoing notwithstanding, it is a best practice to plan a course of action early and retain experienced counsel to help navigate the murky regulatory climate.

The development of the FDA’s new e-cigarette regulations should be of interest to anyone involved in the e-cigarette industry and those interested in online or digital marketing in general.

If you are interested in learning more about this topic or pursuing a venture in this area, please e-mail us at info@kleinmoynihan.com, or call us at (212) 246-0900.

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