Can ‘21’ Keep The Vaping Industry From Running Afoul Of The Regulators?

May you live in interesting times.

That’s supposedly a curse as much as a blessing, but no matter what, it certainly applies to the online sales of eCigarettes and vaping supplies, where regulations haven’t caught up to retail reality, and where legitimate businesses worry about keeping on the right side of the law.

Karen Webster of PYMNTS recently caught up with Matt Fields, vice president of AgeChecker.net, an age and ID verification authentication service that is a player in this new and emerging space of retail. The conversation took place at a time of more pressure on eCigarettes and vaping — as one recent report noted, in fact, authorities in New York are taking about a dozen eCigarette merchants to court to enforce a ban on those retail sales until they adopt age-verification processes. Not only that, the report said, but some 18 deaths in the U.S. have been blamed on vaping, and the resulting headlines have led to even more political and regulatory pressure on this growing industry.

Too Late?

All that would seem to make it a good time to be in age-verification business, especially when those services apply to online sales. Fields acknowledged as much but also went further than that. “It’s a double-edged sword,” he told Webster. Sure, more businesses involved with vaping and eCigarettes are signing up for new or better age verification, but as that happens, he said, many of those merchants are also fighting and struggling to succeed in business. The complexities and vague nature of many regulations that apply to this area of retail sure don’t serve to make things better, he said.

Getting ahead of the game early on — having solid, clear regulations in place from the early days — could have gone a long way to having a better, less dramatic situation as 2020 approaches, he said. But hindsight can’t help now, of course. Webster, in fact, wondered if a big opportunity had passed for getting this industry right, including via regulation and better age verification.

“Is it too little, too late?” she asked Fields.

Fields said he didn’t think so, even as new negative headlines about vaping seem to come every other day. “It’s just a good opportunity to pause, and put some guidance in place,” Fields said.

Indeed, he made a strong case for why more guidance is needed. States, for one thing, have different age requirements for these types of retail purchases. That can mean enabling an 18-year-old consumer to legally buy, via the web or mobile, vaping products or eCigarettes from a state with an age limit of 18 — and then have it shipped to a state where the age limit stands at 21. Further confusion comes from military members who might be allowed to legally smoke in one state but not others.

Rise of Age Verification

Age-verification software providers can certainly inform merchant clients about all these contradictions, but it’s up to the business to set the rules within their technology, Fields told Webster. “I don’t offer legal advice” to businesses, he said, adding they should seek legal counsel if they need such guidance. But he described the situation as one with muddy waters. “You are seeing a product that is relatively new and on the rise under a lot of scrutiny,” he said. “For you to be selling blindly is completely irresponsible.”

As for Fields, he would make the legal age limit on such products 21, which would reduce those conflicting situations. Raising the age limit — or even deploying a robust age-verification system — will certainly lead to some business losses. He estimated those losses as modest — ranging between 3 percent and 4 percent. But merchants need to look at those losses in the right light, he argued. “You are better off getting rid of that 4 percent because that’s where most of the fraud comes from,” Fields said.

As a new decade approaches, you can bet on much activity when it comes this area of retail and age-verification in general. Not only will the retail and growing cannabis and CBD industries require robust age security systems, but CBD also looks like it might gain even more regulatory pressure before too long. Woe to the merchant that doesn’t get this right — fines and negative headlines are sure to follow.