Remember that if there are 3 million vapers in the US, at least 50% of those people have never set foot in a "vape shop." Instead they use what they can get at c-stores and gas stations. Now, the other 50%, which is now a smaller pool, these are the potential B&M customers. Some B&M's have always followed the retail model, meaning they simply resell liquid in pre-packaged bottles. For the most part these businesses have been untouched for now, unless their states have passed legislation, like PA, or IN. The other stores, the ones who have had as their business model mixing liquid in house for pennies on the dollar and selling it, these are the ones who have been affected and these are the ones who would be the main wholesale customers of the vendor who sparked this thread.
Many shops have decided to stop mixing in house. Some have moved to outsourcing the manufacture of their liquid, and it is doubtful that they would be using the same suppliers. Some have chosen to switch over to the retail model, abandoning their liquid lines.
Perhaps what was meant by "sales have dropped 50%" is that "profits have dropped 50%" which would absolutely be expected if a B&M switched from mixing to retail only.