Arkansas ACT 1235 (SB978) Shuts Down Online Sales

[sjrily]

In reading over the bill and from a few out of state vendors on reddit it looks like out of state eliquid manufactures have to obtain a permit in order to sell to Arkansas licensed retailers/wholesalers and it is unlawful for them to sell directly to end consumers. So basically it is unlawful for anyone to ship from out of state to consumers in Arkansas. Retail permits in Arkansas require a B&M and only allow over the counter sales, so no online sales for Arkansas shops either.

Retail permits will not be issued to residential addresses, there's nothing requiring an open-to-the-public B&M location.

Wholesalers CAN sell to consumers, but they need to obtain a retail permit in addition to their wholesale permit.

The "over-the-counter" phrase really doesn't contribute to the meaning of anything, but that's legalese for you.

I've brought up the Commerce Clause to several attorneys - no one is interested. Guess the money trail isn't there yet.

 

[YoursTruli]

Retail permits will not be issued to residential addresses, there's nothing requiring an open-to-the-public B&M location.

Wholesalers CAN sell to consumers, but they need to obtain a retail permit in addition to their wholesale permit.

The "over-the-counter" phrase really doesn't contribute to the meaning of anything, but that's legalese for you.

I've brought up the Commerce Clause to several attorneys - no one is interested. Guess the money trail isn't there yet.

I don't believe you are correct in any of your statements

From the Bill:

SECTION 7. Arkansas Code § 26-57-228. Purchases from unregistered, unlicensed dealers unlawful.
7 (a) It is unlawful for a retailer of tobacco products, vapor products,
8 alternative nicotine products, or e-liquid products to purchase tobacco
9 products, vapor products, alternative nicotine products, or e-liquid products
10 from a person other than a licensed manufacturer, licensed wholesaler, or
11 other licensed retailer.

SECTION 9. Arkansas Code § 26-57-232(a)(2), concerning wholesaler
13 restrictions and criminal violations of wholesalers, is amended to read as
14 follows:
15 (2) Except as otherwise provided herein, the wholesaler may sell
16 tobacco products, vapor products, alternative nicotine products, or e-liquid
17 products only to persons properly licensed under this subchapter


http://www.atc.ar.gov/forms/Documents/REVAPORBUSINESS.pdf

4) Proof of eligibility to operate a business at your location. If the location of the business is owned (or being purchased), a deed must be obtained to show the legal location of the business, and show that the property is owned by the person/persons/company that is attempting to open the business. If the property is leased/rented, a lease agreement must be obtained that shows the legal location of the business, and shows that the person/persons/company are legally renting the location, and show that the property owner has given their consent to operate a business at the location.

As far as the Commerce Clause goes I believe by making all vapor products tobacco products they fall outside of it.

 

[Racehorse]

Well it was fun while it lasted. Looks like I'll be having to pay $175.00 for an IPV4 and $23.00 for 30mL of juice, can't wait, thanks America!

I think you are over-reacting just a tad?


A "permit" to sell costs $50......"All NEW Retail Cigarette, Tobacco, Vapor Product and Alternative Nicotine Product Permits issued on or after July 21, 2015 will be $50.00."

There are no taxes on anything (yet).

Here is the notice that came out on May 1st. Everyone in retail already knew about it:
http://www.atc.ar.gov/Documents/LCM.pdf


So, $50 to to run a business for a year. . About the same price as we pay to buy a chinese mod and a bottle of eliquid.


BTW, I wouldn't bash AR....since most of us already saw this coming, and knew things would eventually go this way, but believe me, it's only a matter of time until your state does that same thing.

 

[nicnik]

BTW, I wouldn't bash AR

I would. And any other state pulling crap like this.

 

[Lessifer]

I think you are over-reacting just a tad?


A "permit" to sell costs $50......"All NEW Retail Cigarette, Tobacco, Vapor Product and Alternative Nicotine Product Permits issued on or after July 21, 2015 will be $50.00."

There are no taxes on anything (yet).

Here is the notice that came out on May 1st. Everyone in retail already knew about it:
http://www.atc.ar.gov/Documents/LCM.pdf


So, $50 to to run a business for a year. . About the same price as we pay to buy a chinese mod and a bottle of eliquid.


BTW, I wouldn't bash AR....since most of us already saw this coming, and knew things would eventually go this way, but believe me, it's only a matter of time until your state does that same thing.

If you need a retail license to sell vapor products in Arkansas, and your business has to be physically located in Arkansas to obtain a retail license, that cuts out internet sales. I'm not positive that applies, but it looks like at least one vendor thinks it does. That means B&M pricing on all gear and liquid, prior to taxes being applied.

 

[sjrily]

I don't believe you are correct in any of your statements

From the Bill:

It's certainly is confusing. Even if it HAD been well-written, it still gets all jumbled up. It's easy to miss the the full context and what the section is addressing:

26-57-214. Registration and licensing required prior to doing business....
(d)(1) Any person licensed as a wholesaler shall not operate as a retailer unless a retailer’s license is first secured.
(2) Any person licensed as a retailer shall not operate as a wholesaler unless a wholesaler’s license is first secured.

(The otherwise provided from above):
26-57-216. Permits and licenses—Number and location—Background check required.
(B) However, a retail, wholesale, or manufacturer license or permit shall not be issued to a residential address or for an address not zoned appropriately for the business seeking to secure the permit; and...

(We're in a commercial zone, one of the items we provided for our permits was a copy of the lease, showing we are legally renting the building.)

26-57-232(a)(2) deals with criminal violations, and that clause is basically saying it's unlawful for a wholesaler to sell to an unlicensed business . Section 7 says it's illegal for retail shops to buy from unlicensed companies, and Section 9 is saying it's illegal for wholesalers to sell to unlicensed companies.

 

[Racehorse]

The reason for all this is the same as when they stopped selling cigarettes over the internet in 2004 here in AR.

There is no way to verify the age requirement. Tobacco and nicotine containing products must not be shipped or sold to anyone under 18. clicking a box on a website that says you are of legal age to purchase a product is not going to ensure that.

They also want to make sure that somebody mixing in their bathroom isn't selling eliquid out of a Facebook page.

Basically, even though this comes as a shock to some people, it really doesn't to me. Its not that I'm happy about it, but the side of me that lives in reality knew it was only a matter of time.

IF vaping wants to continue, and not be banned outright, there are controls that are going to be required. Some are based on age restrictions, some based on the safety of the eliquid product itself. In that sense, I suspect most states will start adopting these requirements, and then later, once all those ducks are in a row, FDA approval will be easier because some of the outstanding checkmarks will be checked. And yet, this will eventually include being taxed, I'm sure.......but I don't see that happening quite yet.

When I started vaping in 2012 I really never expected it to remain a free for all. So maybe I don't feel as blindsided as some people do. I do consider myself a realist.

Now, back to my other forum, where poor working parents are complaining about having to buy school supplies and clothing for their children to go back to school and being taxed about 9% on their purchases. The kids have to have shoes to wear to school, plastic flip flop season is soon coming to an end here in AR. I am worried about these people being able to buy clothing and still pay their electric and air conditioning bills. Plan to stay home on Aug. 2nd as that is the yearly "tax free day" in arkansas, and it will be pretty busy out there.

 

[nicnik]

Now, back to my other forum, where poor working parents are complaining about having to buy school supplies and clothing for their children to go back to school and being taxed about 9% on their purchases. The kids have to have shoes to wear to school, plastic flip flop season is soon coming to an end here in AR. I am worried about these people being able to buy clothing and still pay their electric and air conditioning bills. Plan to stay home on Aug. 2nd as that is the yearly "tax free day" in arkansas, and it will be pretty busy out there.

Sales taxes are way too regressive. So are vaping taxes. Cigarette taxes are even more regressive.

 

[Lessifer]

The reason for all this is the same as when they stopped selling cigarettes over the internet in 2004 here in AR.

There is no way to verify the age requirement. Tobacco and nicotine containing products must not be shipped or sold to anyone under 18. clicking a box on a website that says you are of legal age to purchase a product is not going to ensure that.

They also want to make sure that somebody mixing in their bathroom isn't selling eliquid out of a Facebook page.

Basically, even though this comes as a shock to some people, it really doesn't to me. Its not that I'm happy about it, but the side of me that lives in reality knew it was only a matter of time.

IF vaping wants to continue, and not be banned outright, there are controls that are going to be required. Some are based on age restrictions, some based on the safety of the eliquid product itself. In that sense, I suspect most states will start adopting these requirements, and then later, once all those ducks are in a row, FDA approval will be easier because some of the outstanding checkmarks will be checked. And yet, this will eventually include being taxed, I'm sure.......but I don't see that happening quite yet.

When I started vaping in 2012 I really never expected it to remain a free for all. So maybe I don't feel as blindsided as some people do. I do consider myself a realist.

Now, back to my other forum, where poor working parents are complaining about having to buy school supplies and clothing for their children to go back to school and being taxed about 9% on their purchases. The kids have to have shoes to wear to school, plastic flip flop season is soon coming to an end here in AR. I am worried about these people being able to buy clothing and still pay their electric and air conditioning bills. Plan to stay home on Aug. 2nd as that is the yearly "tax free day" in arkansas, and it will be pretty busy out there.

Even though I don't agree with the age restriction on nicotine products, this goes beyond that. They've expanded the definition of vapor products to include hardware and 0mg liquids. If you're okay with that, fine, I'm not.

 

[Racehorse]

If you need a retail license to sell vapor products in Arkansas, and your business has to be physically located in Arkansas to obtain a retail license, that cuts out internet sales. I'm not positive that applies, but it looks like at least one vendor thinks it does. That means B&M pricing on all gear and liquid, prior to taxes being applied.

Not sure Lessifer, but basically, any company making eliquid will just buy a $50 permit to be able to ship to states that require permits. I expect that pretty soon, everybody will have permits for every state. All of this will become rather clearly ho-hum SOP and the way business will be done and probably start happening everywhere.

I think that FDA approval is not going to happen at all until these things happen like making sure eliquid isn't being sold to underage kids, etc. And like I said, that somebody isn't mixing up stuff that is contaminated and shipping/selling off facebook pages, etc.

i have always felt that these things would happen, because if they don't/didn't, like child proof caps, etc. then the FDA would have just BANNED so much stuff that is the vaping industry.

It would not be much different than if i started making vitamins in my kitchen, grinding up medicinal herbs I grow and putting them into gelatin capsules........and started selling them on a facebook page or internet site.

In some ways although no vapers are technically "for" regulation, I would venture to guess that some consumers might feel a certain relief that things might have lot numbers on them, and that they will be made in a manufacturing facility with a permit, etc. who also won't be shipping to your 13 year old kid on the internet. etc. I just never thought these things wouldn't happen because I know how things are.......they are not as we wish them to be.

Not sure what you mean by hardware.......there are no provisions in the AR bill that cover devices.

Anyway, the way I look at it, it was either that the FDA was going to ban vaping and vape products, OR, some things along the way were going to be "snugged up." I really anticipated the latter happening for at least 2 years now. The "golden days of vaping" ended sometime in 2012.....

 

[puffon]

There is no way to verify the age requirement. Tobacco and nicotine containing products must not be shipped or sold to anyone under 18. clicking a box on a website that says you are of legal age to purchase a product is not going to ensure that.

Requiring an adult signature before delivery could be an option.
It would be a pain for many, but would be a better alternative, than just banning online sales.

 

[Lessifer]

Not sure Lessifer, but basically, any company making eliquid will just buy a $50 permit to be able to ship to states that require permits. I expect that pretty soon, everybody will have permits for every state. All of this will become rather clearly ho-hum SOP and the way business will be done and probably start happening everywhere.

I think that FDA approval is not going to happen at all until these things happen like making sure eliquid isn't being sold to underage kids, etc. And like I said, that somebody isn't mixing up stuff that is contaminated and shipping/selling off facebook pages, etc.

i have always felt that these things would happen, because if they don't/didn't, like child proof caps, etc. then the FDA would have just BANNED so much stuff that is the vaping industry.

It would not be much different than if i started making vitamins in my kitchen, grinding up medicinal herbs I grow and putting them into gelatin capsules........and started selling them on a facebook page or internet site.

In some ways although no vapers are technically "for" regulation, I would venture to guess that some consumers might feel a certain relief that things might have lot numbers on them, and that they will be made in a manufacturing facility with a permit, etc. who also won't be shipping to your 13 year old kid on the internet. etc. I just never thought these things wouldn't happen because I know how things are.......they are not as we wish them to be.

Not sure what you mean by hardware.......there are no provisions in the AR bill that cover devices.

Anyway, the way I look at it, it was either that the FDA was going to ban vaping and vape products, OR, some things along the way were going to be "snugged up." I really anticipated the latter happening for at least 2 years now. The "golden days of vaping" ended sometime in 2012.....

Hardware:
13 (38) "Vapor product" means an electronic oral device of any size
14 or shape that contains a vapor of nicotine, e-liquid, or any another
15 substance that when used or inhaled simulates smoking, regardless of whether
16 a visible vapor is produced, including without limitation a device that:
17 (A) Is composed of a heating element, battery, electronic
18 circuit, chemical process, mechanical device or a combination of heating
19 element, battery, electronic circuit, chemical process or mechanical device;
20 (B) Works in combination with a cartridge, other container
21 or liquid delivery device containing nicotine or any other substance and
22 manufactured for use with vapor products;
23 (C) Is manufactured, distributed, marketed, or sold as any
24 type or derivation of a vapor product, e-cigarette, e-cigar, e-pipe, or any
25 other product name or descriptor; and
26 (D) Does not include a product regulated as a drug or
27 device by the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 301 et seq.,
28 as it existed on January 1, 2015;

Any company wanting to sell products in Arkansas will have to obtain a wholesale license for Arkansas, which will be $50 and will have to establish a relationship with a retailer in Arkansas who has a retail license who will be able to actually sell the product to a person living in Arkansas.

 

[Racehorse]

Hardware:

(B) "Alternative nicotine product" does not include a: (v) Product that is a device under 21 U.S.C. §

This doesn't cover hardware

 

[Lessifer]

(B) "Alternative nicotine product" does not include a: (v) Product that is a device under 21 U.S.C. §

This doesn't cover hardware

Granted, I could be wrong, but I believe 21 U.S.C. § 301 is the exemption for FDA approved drug delivery devices, which would not be covered under this law. So Quickmist can be sold directly from the manufacturer without a tobacco retail license.

I'm struggling to understand how the very detailed definition of Vapor Product does not include hardware.

Now, there is an exemption in some parts of the law for cartridges sealed by the manufacturer that are not intended to be opened by the consumer, those won't need CRP, so Vuse and Mark 10 dodged a bullet there

 

[sjrily]

Granted, I could be wrong, but I believe 21 U.S.C. § 301 is the exemption for FDA approved drug delivery devices, which would not be covered under this law. So Quickmist can be sold directly from the manufacturer without a tobacco retail license.

I'm struggling to understand how the very detailed definition of Vapor Product does not include hardware.

"They" (ATC) are VERBALLY telling us it doesn't include hardware - but you find yourself in court someday, a judge is going to decide what it means, and she's not going to be as concerned about he said, she said, but what the written law says. Plain (written) language is the first step in interpreting law.

Basically (IMO), we'd have to convince her a flashlight is not an electronic light-emitting device if it doesn't have batteries in it. Without batteries, it's just a ...non-light-emitting device?

 

[Utsuru]

The more I read into this the more it hurts, I'm trying not to even think about the ramifications right now, it's too crushing.

 

[sofarsogood]

I asked some retired police friends a question I could already answer, had they ever written a ticket to a minor for posession of tobacco. The answer is no and they couldn't remember even hearing about that. Why does the government ask for restrictions on child access to ecigs when existing laws related to tobacco possession are never ever enforced anywhere--because you don't arrest a taxpayer for being a taxpayer even if it is a kid. Going after the kids on tobacco with tickets would work, especially if ecigs were tolerated as an althernative. The big government drug dealer wants the kids to smoke, when they say otherwise they are liars and we all know they are liars. We are all hypocrits.

"The more I read into this the more it hurts, I'm trying not to even think about the ramifications right now, it's too crushing." I see you've been vaping for a couple of months. I felt pretty vulnerable at that point. In due course I'm planning to put 2 liters of 10% nic in the freezer. That will cost me about $100 and keep me vaping for 7-8 years and more if I can reduce my 12mg nic level without increasing how much I vape and assuming it will keep that long. I love temp control but I mean to learn how to live with mechanical power in case it's necessary. Vaping is harder to control than smoking because vaping inputs are harder to control. A small brief case full of soon-to-be vaping contraband can make you self sufficient for years.

 

[Utsuru]

A small brief case full of soon-to-be vaping contraband can make you self sufficient for years.

Which I don't have. I didn't even know this legislation was about to go into effect otherwise I would have made it a priority to acquire DIY supplies. If this was any other state instead of Arkansas this would be huge news, but because we're the little rinky-dink state we are this isn't garnering much attention.

 

[Utsuru]

Just talked to someone on another forum from Arkansas that had their package stopped/refunded. This is so messed up.

I won an Innokin Disrupter here on ECF that's coming from China and 150ml from a contest on here from within the US. I hope they make it to me, especially the Disrupter. I only have two working mods.

If this was happening in, say, Texas, California, Colorado, Florida, etc. this thread would have 10x more pages and would likely be at the top of General Discussion.

I'm trying not to be angry about it but I'm not a Buddhist monk.

 

[BabyCrusher]

So what happens when an out of state manufacturer sells to an Arkansas wholesaler, and that manufacturer doesn't have the "privilege" to sell to that wholesaler? The in state wholesaler gets fined? The manufacturer gets a phone call?

When the ATC came and talked to shops, this was the main question. What about put of state wholesalers? As long as the retail location had a wholesale license it didn't matter where they bought from. Apparently that's changed now?

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