New law gives FDA oversight of synthetic nicotine products
Update June 29, 2022: The FDA has banned Juul vape products; the court has ordered a temporary stay.
A new law that regulates the use of synthetic nicotine in smoking products will create new compliance hurdles for the industry.
The law gives the U.S. Food and Drug Administration (FDA) the power to regulate lab-created nicotine products. Since 2009, the FDA already had regulatory authority over products with nicotine derived from tobacco plants.
Humans have been using tobacco to get their nicotine fix for thousands of years, but synthetic nicotine is a much newer phenomenon. Researchers say the technology to create synthetic nicotine has existed since the 1940s, but the high cost of producing it limited its commercial use.
In the past few years, however, synthetic nicotine products have started to appear on the market — mostly as vape juice for e-cigarettes — at prices slightly above the cost of vape juice with nicotine derived from traditional tobacco.
Because synthetic nicotine is not a tobacco product, the advantage to sellers was that it didn’t fall under the FDA’s regulatory purview. This allowed manufacturers to produce popular flavored vaping products using synthetic nicotine, after the FDA had banned similar flavored products that had tobacco-derived nicotine.
Some manufacturers also made claims that synthetic nicotine products were less harmful because they had none of the impurities that are inevitable in nicotine derived from tobacco. There hasn’t been enough testing to prove or disprove that claim.
Opponents claimed flavored vape juice using synthetic nicotine was merely a way for producers to sidestep existing regulations and target teens, who prefer fruit-flavored smoke products to tobacco-flavored ones.
The opponents won the debate, Congress passed a measure giving the FDA authority over synthetic nicotine, and in March, President Biden signed the bill into law. It took effect April 14.
New law likely to mean new regulatory requirements
What happens next? A couple of things are likely.
For starters, the law will require all synthetic nicotine manufacturers to get FDA approval for their products. The FDA has rejected nearly one million proposals for flavored nicotine products derived from tobacco, so it doesn’t take a whole lot of expertise to project that it will probably reject flavored lab-created nicotine products as well.
The new law will also almost certainly add to registration requirements. Manufacturers will need to file for licenses and pay excise tax on their synthetic products, just as if they were a traditional tobacco or vape product.
Avalara has products that can help synthetic nicotine manufacturers and distributors adjust to this new registration and tax environment, which you can read about here. And for more information about the tax compliance challenges facing the industry, click here.
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