E-Cig Stores Struggle To Survive With 67 Percent Tax

E-Cig Stores Struggle To Survive With 67 Percent Tax

You know the old adage: it ain’t over til the light-up “VAPE” sign is sold on Craigslist. Well, that means it’s really over for D.C. Vape Joint, the first e-cigarette store in the District.

Co-owner Erik Miller says the new 67 percent tax on e-cig products forced his hand. “We ran the numbers and it just didn’t make sense” to stay open, he says. “We would have had to invest in other products. It’s not like we were making a ton of money. We didn’t want to risk it.”

The tax, first introduced in Mayor Muriel Bowser’s budget back in June and effective October 1, lumps “vapor products” in the category of “other tobacco product.” A committee report estimated the change would garner an additional $380,000 in revenue. The Park Service followed suit, subjecting e-cigarettes to the same restrictions as regular cigarettes.

Sean Robinson, who owns District Vape Electronic Cigarette Vapor Boutique on H Street NE, finds it ironic that vapes are considered a tobacco product.

“My whole goal in opening the store is to get people to stop smoking,” he says. “The 67 percent tax is really debilitating for business. We’re basically just trying to survive. I believe that people of lower socio-economic backgrounds deserve the same opportunity to quit. That’s why I opened my store where I did.”

Robinson is opening another vape shop in District Heights, Maryland. “It’s definitely designed to absorb the loss,” from the tax, he says. He has also started selling pipes and other glassware, which aren’t susceptible to that 67 percent.

But Miller didn’t want to expand into glassware or into Maryland. D.C. Vape Joint opened on 18th Street in Adams Morgan in late March 2014. In a little more than a year of business, the shop was able to pay back its investment (Miller’s brother and sister-in-law provided the funding).

Now, after closing, Miller is selling all of the remaining inventory and furniture, including the light-up sign that had been visible from the window. He sold the sign for $50 on Craigslist. (Full disclosure: my friend bought the sign, and I accompanied him on the purchase to interview Miller.)

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He says that the store was bringing people to the neighborhood. “People would tell me they hadn’t been to Adams Morgan in years,” he says. “People go to vape shops to hang out. It’s this whole subculture. We had a lounge—we did movie nights and book signings.”

By the time D.C. Vape Joint shut its doors, it was employing four people. Because they learned about the tax in June, “everyone knew in the back of their mind (closing) was a possibility,” says Miller. “But we didn’t think they’d actually go through with it. We thought it would get amended.”

“The 67 percent is meant to shut you down. It’s not meant to generate revenue,” he says. “If you’re really trying to make revenue, tax it at 20 or 30 percent. That’d be annoying, but we could survive.”

“The e-cig industry used to be all small businesses and now corporations are hopping on,” Miller says. “When (the government) regulates, it’s only the corporations who can weather the regulations.”

The Mayor’s office has not returned a request for comment on the tax.

Miller may be out of the brick-and-mortar business, but he’s not out of the e-cig market. Now he sells vapor products on his website 37 Tons, which is described as “a collaboration of experts in the fields of addiction, vaping, health, and wellness.”

But is vaping healthy? The technology is so new, there are no long-term studies. That doesn’t concern Miller. “You know what cigarettes are. Cigarettes kill you,” he says. “We don’t know what e-cigs do long-term, but how can it be worse than that?”

Robinson agrees. “I don’t think (vaping) is harmless,” he says. “But it’s a quantum leap in terms of body harm, in terms of harm reduction.”

Robinson also questions the idea that the D.C. government is taxing his business in the name of public health. “One thing I think is ironic is that there’s no law saying I can’t sell e-cigs to minors, but they tax me first. That’s telling.”

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