Tips on avoiding legal trouble for your vape business
November 26, 2014
You knew the job was dangerous when you took it, right? We’re kidding, of course, but only a little.
In the vape industry, you gotta watch every step you take to avoid getting into hot water with banks and especially the law.
Mark Burton is a consultant at California Capital Partners with a passion for the vape industry. He himself used eCigarettes to quit smoking after a massive heart attack – causing him to take a deeper look at the industry, realize how cool it is, and use his legal superpower to help vape businesses grow and thrive.
Mark has a thing or two to say about preventing these legal problems BEFORE they become an issue. Notebooks ready? Good.
Have A Strict No Sale to Minors Policy
The legal age to vape is eighteen. Selling eCigarettes to a minor is considered a misdemeanor, which can result in fines, revocation of your business license, and even jail time. Minors should only be allowed in your store if accompanied by a parent or guardian.
To be extra safe, keep all vapor products in locked cases or far out of reach of minors. Keep good cameras on in the store at all times, but particularly during business hours and make sure the audio is always turned up. Not only will this help with theft prevention, but if someone tries to set you up as selling to a minor, you have the evidence of what happened clearly on tape.
Stay in Your Lane
Make sure that the products you are selling are authentic and don’t violate anyone’s intellectual property rights. For example, a client of Mark’s was caught selling counterfeit “Hello Kitty” drip tips. He had to pay the rightful owners a pretty penny!
You also need to market your products correctly. Don’t do stupid things like have liquids with cartoon characters as their logo or put anything out into social media that you would have a hard time defending to a jury.
Know Who You’re Getting into Bed With
Know your vendors and products; do your due diligence on them. You do not want to be held responsible for the errors of a shady company. Currently, vapor products fall under the same consumer product liability laws as most other products. Because of this, the retailer will be in what is called the “chain of distribution” and therfore will be liable along with the wholesaler and manufacturer.
“A retailer who gets a threat of litigation from any customer or alleged customer should prepare for the possibility of a lawsuit,” Mark says. “If this happens to you, cease communications with the accusing individual immediately and save all prior communications. Immediately contact your legal counsel.”
To safeguard against problems like this, only buy liquids from wholesalers and their manufacturers who you know and are clearly professional. If it is possible, it would be great for a retailer to be able to visit the facility of a manufacturer or wholesaler, however, this often isn’t practical. However, there are a couple of ways for vape store owners to determine whether the products they are purchasing are coming from reputable companies:
Look at the Packaging: Do the e-liquid bottles contain typical warnings, an ingredient list, a contact address, nicotine strength level (including 0 nic), lot number and expiration date and the like.
Assess Their Marketing: Is the company’s marketing done in a professional manner (i.e. not aimed at minors). “I wouldn’t go so far as to say that any popular character on a vape liquid label would mean it was counterfeit,” Mark advises. “But there is a very, very high chance it is. If the character is one that appeals to children, a reputable firm would not attempt to license its use anyway.”
Read Their Social Media Posts: Social media advertising should be respectful and informative, keeping in mind that the vapor products industry’s main marketing channels are social media sites such as Instagram, Facebook and Twitter.
We’re not legal experts here at Vape Payment Insider, but these tips should help prevent your business getting into hot water with the authorities. Need answers to serious issues? Contact Mark by emailing Markburton@genrichfo.com.