I learned a hard lesson with sweeping regulation during the financial meltdown. I was a partner in a mortgage banker/broker company from 1999 through 2010. We played by the rules and had a spotless history. The Dodd-Frank bill shut us down along with 90% of our peers. It was awful. The worst part for me wasn't losing the business. It was calling the staff into the room and telling them we were closing. Saddest day of my professional career.
The regulations seemed ominous in 2008 but we figured everything would work out. As they phased in over the next 2 years reality started setting in. Profitibility was out the window. Big banks won. They reclaimed the market share they were losing to the little guys.
It's not apples to apples with what is happening to the vape industry because the crisis was real and happening. Regulations were fast and furious across the entire financial sector. Banks won by default and not by design. But there are similarities and I fear the vape shop owners are doing exactly what I did. False sense of security because we were in business for a good while and it seems unthinkable that a swipe of a pen can shut it all down "just like that". Well...it happens just like that. Trust me.
The similarities are a little scary even though the circumstances are different. During the phase in process, business was still manageable but profits took a hit and doing business became more difficult. Then our available product line got squashed (mortgage business went from 31 flavors to just chocolate, vanilla, and a little bit of strawberry). With drastically less products available our margins shrank more and competition was fierce.
We had to close our credit line at our bank so we couldn't fund our own loans anymore and had to broker exclusively. We closed the line because strict Fed regulations about net worth requirements (among other things). Requirements that no small business could ever meet. So we were stuck only being able to sell other people's products for a measly commissions. My company along with thousands of others were gone in a blink. Big banks grabbed it all back and controlled the market again after steadily losing market share for a decade.
This FDA thing seems awful similar and complacent vape shop owners are in for it. There may be nothing they can do either way. The profit center is in juice by a wide margin. If juice consolidates to just a few manufacturers then all you can do is resell. If Walmart or any big box resells then you are done.
Sounds like the same period in which BankofAmerica bought Merryll Lynch. That was a shock.