In 2015, the state of Indiana enacted a law that required e-liquid companies to go through a safety and approval process before they could continue doing business in the state. This law was later amended in 2016 with additional security requirements added.
The result was that only one of Indiana's security firms, Mulhaupt's, held all of the certificates needed to grand approval to e-liquid companies, giving them a monopoly over an industry of which they weren't directly a part.
Senate Bill 1
In order to qualify as an approved security firm for these purposes, companies needed to specialize in locksmith work, doors, and a number of other handyman type services unrelated to e-liquid manufacturing. Nevertheless, lawmakers insisted that the reason for the bill was product safety.
They limited the number of certificates available to 10, so once Mulhaupt's had their approval, they could pick and choose the handful of companies they wanted to support. All other manufacturers found themselves shut out of the market by a player that had no direct competition. Many people have called Mulhaupt's the "gatekeeper" in this scenario because they alone hold a key to market entry.
After the bill was enacted, dozens of vapor companies were forced out of business, prompting an FBI investigation. In addition, the cost of e-liquids in Indiana shot up, as the market reeled from the sudden lockdown.
This week, a new series of amendments was on the table, rolling back some of those restrictions and potentially paving a way forward for small business owners who were suddenly booted from the marketplace over the last two years.
The latest amendments would do away with many of the stringent requirements for e-liquid manufacturers to get licensure, but the security requirements are in the spotlight. By repealing this particular section of the law, Mulhaupt's would no longer be the only entry point for e-liquid manufacturers and the state’s market would have an opportunity to stabilize itself at a lower price point thanks to restored competition.
The Vote is In!
After two days in Committee, Indiana legislators voted 12-0 today in favor of the amendment. Further announcements will be forthcoming as they look at ways to roll back regulations and re-open the Indiana e-liquid market to manufacturers.
This marks the end of a tremulous two years for vapers and vapor companies alike in the state. Legislators will also be looking for more guidance from federal regulatory agencies about the enforcement of safety and security rules that are conducive to competition and fair market practices.
