The Story of Vermont Vapor
This is how it all began, and how it all ended.
Vermont Vapor, Inc., was formed in the summer of 2009. I was just a poor law student home for the summer. I'd owned an e-cigarette for a couple of years, but it wasn't until my mother, Linda, quit smoking after forty plus years that I truly saw what e-cigarettes were capable of. I had only used mine to survive law school exams, but when Linda quit smoking and her friends started quitting smoking, I knew there was something there. I quit smoking that spring with my new “top-of-the-line” model – the DSE901. Before that, I used one that was called the “mini” - because at the time, there were only three styles: the mini, the penstyle, and the cigar. They were not the greatest, but they worked. The real problem was the e-liquid. It all, with the exception of Johnson Creek, came from China and it all tasted like crap. We had little to no idea what was in it, and, when tests were done, we had little knowledge of why it had so many things in it. I resolved at that point to figure out how to make an e-liquid with the bare minimum of ingredients. Linda had already started importing e-cigarette equipment for herself and her friends, so it was a no brainer to start the company.
Of course, figuring out how to actually make e-liquid wasn't so easy. There was information on the message board (ECF was the only message board about e-cigarettes at the time) from people who had experimented with using glycerin, but there was also concern that glycerin was too thick and, if heated to much, would decompose into acrolein. Through research, however, I discovered that adding distilled water would solve both these problems. A solution of 20% water and 80% glycerol decreased the boiling point to safe levels and lowered the viscosity to where it behaved much the same as propylene glycol at room temperature. With that knowledge, the time had come to actually purchase supplies and start testing.
The first test was almost the end of Vermont Vapor. I had ordered a small amount (less than four ounces) of l-nicotine from a large research chemical supplier. I had built a glove-box with polycarbonate and felt as prepared as I could be. The first batch of e-liquid “base” was mixed and bottled inside the glove box and I brought it to Linda's place for testing. It was perfect – only three ingredients: glycerin, water, and nicotine. It smelled horrible. Now it seems silly, but at the time we were sure that the whole batch was a failure and we would never be able to produce e-liquid. I'd searched online and there was nothing to help. However, on a lark I decided to visit our local college. There in the chemistry section, in a very old book, I found a discussion on the odor of nicotine and how it could be neutralized with acid. Armed with this, I proceeded to our local “natural foods” store and, sure enough, they sold bulk citric acid. With that and some ph testing supplies, I was able to bring the e-liquid to a neutral ph. Just for your information, what this did was to create a salt – nicotine citrate – that is one of the primary natural forms of nicotine in the tobacco plant. While it didn't eliminate all the odor and taste, it significantly reduced it and we were left with a usable product.
We tested flavors for about a week and when I was sure we had a good product, I filed our corporate paperwork, started designing our website, and started building our first lab. We got our approval from the state during the first week of June and opened the business to customers. Everything was going smoothly and orders started pouring in from across the country and the world. We had decided on using PayPal in the beginning as neither of us had any experience with merchant accounts – the accounts that let a business accept credit cards. We had no real problems until September.
I had gone back to Philadelphia for my final year of law school and planned on traveling back every weekend to make e-liquid. I remember sitting in my apartment looking at the website. One day there would be 5 people browsing the site, the next day, ten. At the beginning of September, we were getting about two hundred dollars a day in orders. By mid September, we were getting about two thousand. Business was booming and it seemed we were entering the big time. Until PayPal in its infinite wisdom decided to crack down on the e-cigarette market. PayPal froze our accounts and for two weeks we were unable to process any orders. It was a disaster. By the time we had a new merchant account set up and could take orders again, sales had dropped back down below two hundred a day. It was almost six months before orders had almost returned to pre-PayPal disaster levels.
That's not to say everything was smooth. The FDA was still seizing peoples e-cigarette shipments at the border. We'd been lucky, but our luck almost ran out. While we pooled resources, I was running Vermont Vapor, Inc., as the e-liquid business and Linda ran the equipment end of the business separately. One day, when she was expecting to see a rather large shipment from China she instead got a phone call. The customs agent on the other end wanted to verify that the shipment was e-cigarette components. Thinking on her feet, Linda told them that they were not e-cigarettes, but instead mini heaters and humidifiers that were intended to keep her gerbils from freezing their little noses off during cold Vermont winters. Indeed, she said, if customs didn't release the package soon, she feared tht they would all turn into little furry popsicles. I have no idea if the customs agent believed her, or merely gave in to Linda's superior ingenuity, but she didn't lose the shipment and the "gerbils" (and our customers) were happy.
Vermont Vapor's lab in Rutland, Vermont, was engulfed in flames. My office, all the lab equipment, supplies, wholesale orders waiting to be shipped... Everything gone. Luckily, we had just opened a retail store a week and a half earlier, so we had some stock and assets remaining. But it wasn't much. And we weren't insured. When we started, no insurance company we contacted was willing to write a policy for us – even a “non-liabilty” policy. Because I was away finishing my final year of law school, it wouldn't be until the end of May when we would have the time and money to open our second lab.
The retail store was wonderful, however. Before we opened the retail store, we almost never saw other vapers. With the store open, we not only got to meet customers who would drive down from Canada or up from Pennsylvania, we finally started getting some Vermont and Northern New York customers. They saved us. Even after our lab reopened, the fire had brought our online and wholesale sales back down to dismal levels. But our retail sales slowly rose and by the end of 2011 things were looking up. We had even fought our first battle against the Vermont State Legislature and won – no tax on e-cigarette products. And, you know what that means...
It's frivolous lawsuit time. You see, we were not the only tenant in the building that burned down. The tenant who had the other side of the building ran a staining business. I know. Staining business, fire, seems pretty cut and dry. Except he sued us. With no evidence and no real legal theory he managed to drag the lawsuit all the way through to a trial where the judge refused to let the case proceed to the jury (for those of you legal eagles out there, we won on a motion for Judgment as a Matter of Law). So, another year and a hundred thousand dollars in legal fees down the tubes. But we persevered and in July of 2013 we moved our retail store, manufacturing and warehouse all under one roof.
We were still having to battle the Vermont Legislature every year, but at least we kept winning. But every year there were more threats from the State. It was 2015 I believe where there were no less than seven e-cigarette bills introduced. A couple of tax bills. A bill to raise the purchase age. A bill or two to ban vaping. a bill to restrict e-liquid flavors to menthol and unflavored. And a bill to require all e-liquid to be in “child-resistant packaging”. We won most, but they passed the child-resistant packaging bill. How you put a child-resistant cap on a five gallon bucket or a 55 gallon drum is beyond me. But who said politicians were bright.
It was last year, 2016, where it appeared the tide was turning. We again won most of our battles with the legislature, but we also lost big. They enacted an e-cigarette ban. It was at that point that I knew it was time to get out. Hell if I was going to continue to pay taxes into a state that was actively seeking to destroy my livelihood. I listed the corporation for sale and spent a month and a half in Ecuador considering my retirement. Linda had convinced me to hold out and hang on, so we kept the business running.
And the business was still running on December 31st, 2016 when I received a demand letter from the Vermont Attorney General's office. They asked for everything under the sun and it was a clear shot across the bow. Every customer's identity and purchase history. Every advertisement or document we ever distributed. They even wanted us to provide evidence that customers quit smoking while demanding we do so without referencing the fact that the customers quit smoking. It was impossible and it became clear we would have to close. We announced on January 31st that the business would close on February 28th.
We didn't give the Attorney General customer names or purchase histories. We didn't give them the fifty-thousand dollar fine/bribe they asked for. We didn't give them pretty much anything. Matter of fact, as I sit here writing this, I'm giving them all that's left to give: the finger. Because of the Vermont Attorney General, the corporation cannot be sold, and we cannot afford to fight them. So I quit. If the State of Vermont is so hell bent on keeping people smoking, they can do so without my money and without my help.
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