LANSING (Great Lakes News) – Even as Michigan vape companies celebrate the freedom to sell their product, the economic damages caused by the governor’s ban on flavored e-liquid has caused irreversible damage to their bottom line.
Yesterday, Michigan Court of Claims Judge Cynthia Diane Stephens granted a preliminary injunction on Governor Gretchen Whitmer’s ban on the sale of flavored e-liquid products. The injunction came as part of Michigan vape companies A Clean Cigarette and 906 Vapor’s lawsuit challenging the governor’s order banning the sale of flavored e-liquid. Stephens found that the economic damage to companies like A Clean Cigarette justified allowing the sale of flavored e-liquid products until courts decide whether the governor’s order was constitutional.
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“Not only has plaintiff A Clean Cigarette lost a significant percentage of its sales and closed several stores due to the ban, the ban will force plaintiff to rebrand itself entirely,” Stephens wrote. “In essence, the emergency rules will destroy plaintiff A Clean Cigarette’s business as it currently exists.”
Companies selling vape products in Michigan are now allowed to continue selling their products. For some companies, that means a return to business as usual.
“We’ve been moving along, but business is obviously down,” said Mister-E-Liquid CEO Ronald Pease. “We have a lot of customers who are somewhere between mad, angry, scared, and worried. They don’t know where they are going to get their E-liquid that they use every day. Now it means that we can get product back in the hands of our customers. From a business perspective we can carry on and keep our stores open, and our staff employed.”
Mister-E-Liquid is a Grand Rapids based e-liquid production company with retail locations throughout Michigan and Illinois. Despite the ban, they managed to hold onto all of their locations and employees.
“I decided I was not going to lay off staff, as long as I could hold on to them,” Pease said. “We did have to reduce hours in our retail stores, but we haven’t laid anyone off. Hopefully we can come to a resolution before we come to that unfortunate decision. Not all of our manufacturers can say that same thing. There are several stores that we’ve heard from that have either already closed their doors or are in the process of closing their doors.”
On such manufacturer is Joost Vapor in Lansing, Michigan. Joost Vapor was Michigan’s largest independent vape retailer, with 17 retail locations throughout Michigan. Joost Vapor was hit especially hard by the ban, making it one of the many companies forced to shed personnel.
“Joost Vapor is pleased that today the court saw the ban of flavored vaping products for what it truly is: an overreach of government into the lives of adults,” said their Chief Administrative & Compliance Officer Michael Ames. “We also agree with Judge Stephens, that the rules should not be enforced at this time, and are thankful that she saw this. It is, however, unfortunate that the ramifications of this situation have affected thousands of lives, hundreds of employees, including our own.”
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The sudden nature of the ban forced Joost Vapor to layoff employees to make ends meet.
“We were once a company that employed over 150 employees,” Ames said. “Most of them full-time with benefits. We now have less than half of that.”
Joost Vapor has been a voice at the front of advocacy efforts to reverse the ban. They joined Mister-E-Liquid and other Michigan vape companies to form Defend MI Rights which is an organization dedicated to overturning the ban. While the injunction will allow Joost Vapor to return to selling their product in Michigan, the damage will be difficult to reverse.
“This is a bittersweet moment for our company,” Ames said.” No, it is not planned at this time to rehire the staff that we lost. The damage that was done regarding the ban is long-term. Because we were not going to leave our staff to suffer, and have always wanted them to succeed, we partnered up with an employment agency that specializes in permanent placement to aid those displaced employees to find employment elsewhere.”
As a manufacturer, Joost Vapor faces the added impact from out of state retailers being unable to purchase stock from Michigan businesses. And despite the victory the injunction represents, the eventual decision of the case could permanently ban the sale of flavored e-liquids. This possibility makes planning for the future nearly impossible.
“The confidence that was once there for the long term, mainly because our companies not only played by the rules but exceeded them, being drastically affected by this, no longer exists,” Ames said. “There is an opportunity for some recovery at the moment. The actual recovery most likely will not occur until the Governor and our Legislature come together and put on the book common-sense, effective policy. Which is the process that should have been approached from the beginning.”
Organizations like Defend MI Rights claim to offer solutions to the issue of underage vaping, but the elements in the Michigan government have proven unwilling to cooperate with vape companies.
“We are ready to work through the normal legislative process to arrive at a balanced solution that protects the rights of adults to use vaping products as an alternative to combustible cigarettes and at the same time get these products out of the children’s hands,” said Defend MI Rights spokeswoman Andrea Bitely.
The injunction caused a stir in the governor’s camp, with Whitmer, her Chief Medical Executive Dr. Joneigh Khaldun, and Attorney General Dana Nessel all offering comment on the injunction.
Whitmer was blunt in her condemnation of the decision.
“This decision is wrong. It misreads the law and sets a dangerous precedent of a court second-guessing the expert judgment of public health officials dealing with a crisis,” Whitmer said. “The explosive increase in youth vaping is a public health emergency, and we must do everything we can to protect our kids from its harmful effects. I plan to seek an immediate stay and go directly to the Supreme Court to request a quick and final ruling.”
Nessel echoed Whitmer’s Supreme Court focus, pledging her assistance in any effort to have the Michigan Supreme Court overturn the injunction.
“We are resolute in our efforts on behalf of Governor Whitmer and the Michigan Department of Health & Human Services to protect the health of Michigan’s children,” Nessel said. “The youth vaping crisis is an urgent public health matter that demands immediate action. To that end we are preparing to seek an immediate stay and will seek leave to appeal the judge’s decision directly to the Supreme Court.”
Dr. Khaldun stood by his diagnosis of vaping among children as a “public health crisis.”
“This ruling is deeply concerning and a threat to Michigan’s public health,” he said. “There is no question that youth vaping is a public health crisis. The data is overwhelming, and we’re getting new information every day that reinforces that the Governor and MDHHS were correct to take swift action to protect our kids from the harmful effects of vaping.”
Vape companies and the governor’s office await a decision regarding the injunction from the Supreme Court, as well as the original constitutionality case, with bated breath.