FDA Issues Draft Guidance on Free Tobacco Samples and Vape Shops

The documents may be applicable to NACS members who engage in tobacco sales.

January 19, 2017

WASHINGTON – In recent days, the U.S. Food and Drug Administration (FDA) issued draft guidance documents with respect to certain prohibitions on free tobacco samples and on the application of certain tobacco regulations on Vape Shops. The draft guidance documents may be applicable to NACS members who engage in tobacco sales, including sales of e-cigarettes and other recently deemed tobacco products.

As a reminder, in August 2016, the FDA’s final rule extending the agency’s regulatory authority to products such as e-cigarettes, cigars, hookah (waterpipe) and pipe tobacco, certain dissolvables, and nicotine gels, went into effect. NACS counsel has prepared a memo for NACS members summarizing the major provisions of the rule for tobacco retailers.

Prohibition on Free Samples
Under FDA’s tobacco regulations, retailers are prohibited from giving out free samples of any tobacco products, including e-cigarettes, vape pens, other electronic nicotine delivery systems (ENDS), cigars, hookah tobacco, pipe tobacco, nicotine gels, dissolvable tobacco, or components or parts of these items. This prohibition applies even to those components or parts that are not made from tobacco.

FDA’s draft guidance states that, in general, retailers may only distribute tobacco products to consumers through sales transactions and only in exchange for money (cannot be provided solely in exchange for a consumer’s contact information or signing up for a mailing list). However, the agency does note that certain practices may not violate the prohibition on free samples, and thus would be permissible under certain conditions. Those scenarios, with various restrictions noted in the draft guidance, include certain coupons and discounts, membership and reward programs, and contests and games of choice. The draft guidance document contains more specific information regarding permitted and prohibited activities.

With these potential exceptions, the FDA notes that it intends to “consider the specific facts of potential violations on a case-by-case basis” to determine whether a certain practice would violate the ban on free samples.

Vape Shops
While this particular draft guidance is not applicable to much of the convenience store industry, some convenience store retail outlets may be considered a “tobacco product manufacturer” if that outlet mixes and/or prepares e-liquids or assemble vaporizers – much like the activities of Vape Shops. These outlets, due to these activities, must comply with additional FDA regulations, including registration requirements, submitting lists of products and ingredients to the FDA, and submitting pre-market tobacco product applications to the FDA for review and authorization. Failure to comply with these requirements could subject retailers to fines and enforcement action from the FDA.

The draft guidance is intended to assist retailers who sell newly deemed products (such as e-cigarettes) by explaining whether engaging in certain activities subjects such establishments to additional requirements of the Federal Food, Drug, and Cosmetic (FD&C) Act and the limited circumstances under which FDA does not intend to enforce compliance.

For instance, if not already covered by a marketing authorization order, refilling an open system electronic nicotine delivery systems (ENDS) product would generally result in a new tobacco product for which the vape shop/retailer is required to seek premarket authorization. Under the draft guidance, however, “if the vape shop does not make any further modifications to the device or to the e-liquid before, during, or after the refill … then FDA does not intend to enforce these requirements,” meaning simply refilling an open system ENDS (those designed to be refilled with e-liquid) would not subject a retailer to additional regulatory requirements. Other activities that do not modify the product, such as demonstrating/explaining the use of an ENDS product without assembling the product and cleaning/tightening fixtures of an ENDS product would also not subject a retailer to additional requirements at this time.

In addition, the FDA does include instances in which a retailer would be subject to additional FDA requirements and/or enforcement activity. For instance, modifying a product outside the marketing authorization order would generally result in a new tobacco product for which the vape shop/retailer is required to seek premarket authorization. Refilling a closed system ENDS (those not designed to be refilled and that come prefilled with e-liquid or with cartridges with e-liquids that are not re-fillable) would subject a retailer to additional requirements.

Further, under the FD&C Act, a tobacco product in package form is misbranded if its label does not include an accurate statement of the percentage of foreign and domestic grown tobacco used in the product. FDA interprets this provision as applying only to tobacco products that are made or derived from tobacco, which includes such products as tobacco-derived liquid nicotine and e-liquid made or derived from tobacco. Those products also include products that contain tobacco, such as cigars, smokeless tobacco, and waterpipe tobacco. According to the draft guidance, at this time, FDA does not intend to enforce this section for those products made or derived from tobacco.

Both draft guidance documents are open for public comment for sixty days. NACS will update its members with any further developments on the guidance documents.