Imagine the Indiana General Assembly told carmakers across the world that they had until the end of the year to get licensed to do business in Indiana—and if they didn’t, they were out. Forever. It would be illegal not just to manufacture their vehicles in the state but for dealers to sell their cars anywhere in Indiana anytime in the future.
New manufacturers would be out of luck, too. If a company didn’t exist before Dec. 31, it could never, ever sell cars in Indiana.
And, oh, to get licensed, manufacturers would all have to buy their doors from one designated company—a company that didn’t have enough doors to go around.
Sound far-fetched? Outlandish? Absolutely. But it’s what lawmakers have done to the e-liquid industry in Indiana.
All manufacturers of the liquids used in e-cigarettes and vaping pens must have state permits on July 1 or their products will be stripped from store shelves.
So far, only six companies have gained a permit. It’s a list that doesn’t include national players like Swisher and Intrepid Brands that have been selling e-liquids in Indiana for years. Neither does it include a number of mom-and-pop shops that have been manufacturing their own products.
That’s because manufacturers big and small were allowed to work only with a security firm that met a list of bizarre qualifications set out by lawmakers—a list that includes, for example, a certification for working on rolling doors, a kind of door manufacturers are not required to have. And security firms had to meet those qualifications by July 1, 2015—a year ago, meaning no one that didn’t already meet the rules could take steps to come into compliance.
In fact, only one firm appears to be qualified. And that firm—Lafayette-based Mulhaupt’s—chose to do business with only a handful of manufacturers.
In a story by IBJ’s Hayleigh Colombo in our June 20 issue, owner Doug Mulhaupt—who hired a lobbyist to persuade legislators to tweak the law so his firm complied—said “it’s not my problem” no other security firm is qualified.
He’s right. It’s not his fault.
The blame belongs with the Legislature for passing the flawed bill and to Gov. Mike Pence for signing it into law.
The Legislature started with a worthy goal. When the vaping industry emerged, it faced no real regulation. Retailers could sell the products to kids, there was no requirement that e-liquid makers list their ingredients, and no one was testing the liquids to make sure they were safe. Common-sense regulations were certainly in order.
But lawmakers went far beyond common sense. They created a system that essentially made one private firm—a company with no obligation to provide information to the public—the gatekeeper for e-liquid sales in Indiana.
That might not seem like a big deal. We aren’t actually talking about cars, an industry that affects almost everyone. A small minority of Hoosiers vape, although the numbers appear to be growing.
But the state’s action should concern every business owner in Indiana and every consumer who wants competition in the marketplace. Pence should find a way to postpone the law’s implementation and the General Assembly should rewrite the legislation to ensure it’s fair to all—consumers and business owners alike.•
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