Kansas lawmakers are considering a proposal that’s intended to combat an illegal and unregulated flow of Chinese electronic cigarette products into the United States.
The Senate Federal and State Affairs Committee on Tuesday took up a bill imposing new licensing requirements for electronic cigarette manufacturers that sell products in Kansas, either directly or through intermediaries.
The bill, backed by tobacco giant Altria and a large nonprofit trade association representing more than 2,000 independent fuel retailers, would require e-cigarette manufacturers to apply for a license from the state for $500.
David Sylvia, senior director of public policy for Altria, told lawmakers Tuesday that Kansas and many other states are facing a surge of “illegal” and “unregulated” e-vapor products manufactured in China and shipped into the United States without oversight.
“These illicit products undermine state law, undercut responsible retailers, make excise tax collection more difficult and contribute to youth access concerns,” Sylvia said.
“We don’t know what’s in these products, the conditions they are made in, or in many cases, how they were sold into the state and whether or not state excise taxes were collected,” Sylvia said.
He said the products come into the country through “gray‑market import channels and flow through a minority of noncompliant retail outlets.”
He said the “illicit” e-cigarette market is estimated to generate more than $5 billion a year for China.
Byron McNary, who represented himself and his Derby-based e-cigarette business, appeared before the committee to testify against the bill.
He predicted the bill would end the electronic cigarette business in Kansas and shut down several businesses similar to his.
“This bill is being pushed by large tobacco to effectively kill any competition they may have from small businesses like mine.”
Brian Posler, executive director of Fuel True Independent Energy and Convenience, said the bill would help strengthen the state’s regulatory framework for e-cigarettes.
He said it would ensure that only licensed manufacturers and wholesalers conduct business in Kansas.
“This will help Kansas shut the door on unsafe, illicit, unregulated Chinese products that are currently flooding our marketplace,” Posler said.
“Those products are illegal to sell within China, so they export them to us and they sell them to us,” he said.
Posler said that when retailers import the products directly from China, they can charge less and gain an upper hand on other retailers that are subject to regulation.
“Because you import them yourself directly, you can sell them in your store, you can do it at a cheaper price than the other retailers…that have to work with the system that we have in place for all the other products,” Posler told the committee.
E-cigarette retailers are now licensed in Kansas. In order to get a license to sell e-cigarettes in Kansas, a person or business must apply for a retailer dealer’s license. The license requires an application and a fee of $25 every two years.
To sell consumable materials – the liquid inside the e-cigarette – there is a different license, tax and application.
The new registration bill is backed by Attorney General Kris Kobach, whose office two weeks ago issued a consumer alert warning Kansans about “smart vapes” imported from China that he said were designed to target and addict children.
“These devices disguise vaping as smart gadgets, allowing access to games, social media, Bluetooth, music, and more,” Kobach said in written testimony.
“Protecting Kansas kids from harmful products is one of my highest priorities as attorney general, and these devices are designed to entice kids,” he said.
Kobach said more than 90% of disposable vaping devices on the market originate from China and remain largely unregulated by the federal government.
“My consumer alert underscores the urgent need for action,” Kobach said.
“These products not only pose severe health risks — such as exposure to cancer-causing substances like lead and nickel, or lung illnesses from ingredients like vitamin E acetate — but also introduce privacy and security threats through Wi-Fi and Bluetooth connectivity, potentially leading to data breaches and malware,” he said.
Scott Zaremba, owner the grocery store CheckersXtra in Lawrence, asked lawmakers to pass the bill in order to protect fair competition and promote “a healthy retail environment.”
“I am the last guy for more regulation. I think we’re regulated more than a nuclear power plant,” Zaremba said.
“But it’s something that we need, especially in this category,” he said.
“We look for an even playing field,” he said. “Part of that is making sure all those products are licensed and we know that they’re a safe product to have in our retail location.”
Republican state Sen. Tory Marie Blew of Great Bend asked what kind of ingredients might be included in unregulated e-cigarette products coming from China.
“I’ve never trusted China in anything,” she said.
“With that being said, you don’t know what’s in these products,” she said. “Could there be drugs in these products and we don’t know about that?
“Could they have fentanyl? Could they have marijuana in these and they’re being sold and the person buys them has no idea?”
Another owner of e-cigarette shop in Derby, Scott Mchargue, submitted written testimony opposing the legislation.
“This bill will indefinitely shut down all small electronic cigarette stores across Kansas. This bill will make it impossible to run a small e-cigarette business in Kansas,” he said.
“Asking every e-cigarette manufacturer or distributor to obtain a special license to
sell products in Kansas is not realistic,” he said in his written testimony.
“The products that are sold in these small e-cigarette businesses are made all over the country and world, from several different sources.
“Most of these products go through two or more distributors before making them on the retail shelf. Being able to persuade all these manufacturers to comply with Kansas law would be an undeniable impossible task,” he said.
