Vape ban smokes out local businesses

David Mamaril Horowitz

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San Francisco’s ban on the sale of electronic cigarettes forced one of its last vaping shops to close Sept. 9 after six years in the business.

“They regulated me out of business,” said Chris Chin, who previously owned the Tenderloin vape shop Gone With The Smoke. “My foot traffic has gone through the floor.”

Chin opened shop to help people who smoke tobacco make the switch to e-cigarettes, he said. Numerous health agencies, like the U.S. Centers for Disease Control and Prevention, have classified e-cigarettes as the lesser of two evils.

But his sales took a 30% dive when San Francisco banned flavored e-cigarettes from shops last year. Then, this July, the San Francisco Board of Supervisors voted to ban e-cigarette sales altogether by early 2020, cutting his sales as much as another 20%.

7/11 employee David Singh holds a box of Juul pods on Sept. 8. (Photo by Sandy Scarpa / Golden Gate Xpress)

San Francisco approved both bans as part of its campaign against underage vaping — over 20% of high school students vaped last year, compared with 1.5% in 2011, according to the 2018 National Youth Tobacco Survey. Adding to the city’s concerns over underage vaping, the CDC is currently investigating 360 cases of lung illnesses and six deaths considered likely related to vaping. 

“Banning vaping products that target young people and push them towards addiction to nicotine and tobacco is the only way to ensure the safety of our youth,” San Francisco Supervisor Shamann Walton said in a statement when the ban was announced in July. 

But for shop owners, the daunting financial blow of local regulations is met with frustration. Many believe that regulating shops does little to address the crux of the issue: social exchange.

“(Children) are going to their friends, who are going to buy for them,” Ashbury Tobacco Center manager Ahmid Salib said. “You cannot tell people what to do or what not to do with their lives.”

About 86% of high school students who reported using e-cigarettes in 2017 did not buy their devices from stores, according to a California high school survey. And less than 3% of San Francisco’s 738 tobacco retailers failed to verify a customer’s age in 2018, according to the city’s Department of Public Health.

Meanwhile, at least 700 small, independently owned corner stores and grocers in San Francisco could lose revenue from the ban, according to a legislative review by the city’s Small Business Commission.

The flavored e-cigarette ban imposed a loss of potentially $50 million in e-cigarette sales citywide, according to a 2017 Office of Economic Analysis report. The city has not completed a study on the implications of San Francisco’s blanket ban.

Regulating e-cigarettes during a high demand could also incentivize a black market, according to the commission.

 

Nonetheless, as part of the “Regulate, Don’t Ban” campaign, San Francisco-based vaping giant Juul has imposed its own regulation. By May 2021, businesses selling Juul products must install a new software that scans IDs and limits the number of Juul products individuals can buy.

Touting its stringent age-verification standards, Juul committed $100 million in financial incentives Aug. 29 for businesses that install the software. However, merchants have shown skepticism surrounding its usefulness.

“The ID system doesn’t check the ID’s validity against a database like voter registration or DMVs, so it doesn’t take the burden off the clerk,” stated Jeff Lenard, vice president of the National Association of Convenience Stores.

When asked to verify if that was true, Juul spokesperson Ted Kwong emailed a press release that did not address the question.

Salib said that he believed Juul created the regulation to improve its public image. A Stanford study this year found that Juul had directed advertising toward children in its first six months on the market.

“(Juul) has to show the families that they are doing something about it,” Salib said.

Meanwhile, the Small Business Commission is creating a group to mitigate the economic effects of San Francisco’s blanket ban. It will aim to find alternative sources of revenue for small merchants and grocers, such as diversifying inventory, fast-tracking permitting processes and offering other support for vulnerable corner stores.

Regina Dick-Endrizzi, the executive director of San Francisco’s Office of Small Business, said the mitigation group will be ready by October.

But for Gone With The Smoke, it’s too little too late.

Chin transitioned to selling CBD to pay his lease, which continues until next summer. Once it runs out, he’s selling shop for good.

He could sell products remotely, he said. Recalling the red tape he dealt with as a small business owner, one thing seemed certain.

“I don’t see myself living in the city anymore,” Chin said.