State approves seventh e-liquid manufacturer on deadline day

June 30, 2016

There’s now one more e-liquid manufacturer allowed to participate in Indiana’s vaping industry before the gate closes: California-based Cali Co-Packing.

Indiana’s Alcohol and Tobacco Commission unanimously approved the company's application on Thursday morning—the last day allowed by the state for e-liquid manufacturers to enter the market. Five other pending applications were denied unanimously.

ATC general counsel Jessica Allen said Cali Co-Packing submitted documents in time verifying that the firm met stringent security requirements.

The issue of meeting those requirements has flustered e-liquid manufacturers, who have claimed that Indiana's vaping laws were crafted so that a private Lafayette security firm, Mulhaupt's, would be the only company able to certify manufacturers. Thus, Mulhaupts essentially would have veto power over manufacturers, they said.

The security rules are the focus of an ongoing federal lawsuit. In a separate federal case, a judge on Thursday ruled that Indiana's vaping law was constitutional and could go into effect Friday.

Besides Cali Co-Packing, there are six other previously approved manufacturers, all of which use Mulhaupt’s as their required security firm. The California company in recent days scrambled to find a security firm for its application.

IBJ reported Thursday morning that Cali Co-Packing first tried to work with California-based Bay Alarm Co., which ended up not meeting the security firm requirements.

Bay Alarm told IBJ that Cali Co-Packing asked the company to stretch the truth and resubmit an application with overstated qualifications, which it wouldn’t do.

Ivan Loochkartt, chief operating officer of Cali Co-Packing sister firm One on One Flavors, denied to IBJ on Thursday morning that Cali Co-Packing asked Bay Alarm to lie on its application, and said it easily found another security firm that met the qualifications. That firm is Lock Up Inc., which is also doing business as San Marino Lock Key and Safe Co.

Loochkartt said he was surprised to learn the application was approved.

“The whole law, the way that it was written, is really weird,” Loochkartt said. “It’s not to the customer’s or the ATC’s benefit. We put the application out there and said if it happens, it happens. We don’t want to get into any issues with anybody.”

Shortly before the application was approved, ATC Commissioner Dale Grubb verified with Allen that “if [the application is] truthful, there’s no problem.”

“If it’s untruthful, they’re subject to penalty of perjury,” Grubb said.

The ATC and state lawmakers have caught flak in recent weeks after several news stories examined opponents' arguments that the law essentially created a monopoly for Mulhaupt's.

Democratic gubernatorial candidate John Gregg told IBJ it merited a do-over, and one of the crafters of the law, Sen. Ron Alting of Lafayette, recently told the Lafayette Journal & Courier that he “know(s) how this looks” and vowed to work with Senate leadership to “get that thing fixed.”

David Cohn, who owns Irvington-based World of Vapor Indy and attended Thursday’s meeting, said he believed the state approved the California company because they were eager to prove the law wasn’t a monopoly.

“It’s unbelievable,” Cohn said. “This is not for the greater good.”


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