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Man smoking a vape, surrounded by smoke, on black background wearing black baseball cap.

2023 Tobacco + Vaping Report: Vaping

A key category in flux.

Of its 133 locations in Ontario, Hasty Market operates about a dozen of them with a specialty vaping store—complete with a separate entrance and age verification system.

An “adults only” store-within-a-store has been the only way a convenience retailer in Ontario has been legally permitted to sell flavoured e-cigarettes since 2020. Non-fruity flavours, menthol, mint and tobacco, can still be sold at convenience store counters.

However, Hasty Market’s vape stores are offering fewer e-cigarette options these days.

“We’ve seen brands and companies eliminated because it would cost a fortune for them to meet the new mandate of the government,” says Peter Lombardi, senior vice-president, merchandising and procurement, Hasty Market Corp. “They’ve just dropped from the picture.”

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Multiple vapes

That mandate? On Oct. 1, 2022, vape manufacturers had to start paying an excise duty similar in cost to tobacco duty. Any new product being packaged and shipped to stores would also have to be labeled with a vaping excise stamp as proof of payment.

  • Retailers could keep selling unstamped merchandise until Dec. 31, 2022.
  • Unsold merchandise without the excise stamp is now being returned to manufacturers for credit towards stamped product.

That has been a massive undertaking and challenge for one-time market leader, Juul, from Juul Labs, as they had so much inventory in the marketplace.

In fact, Juul Labs used to have 80 employees in Canada. Now it has eight, according to multiple sources, and (as of press time) there is talk of the brand being sold to one of the big tobacco companies.

Despite growing pains, the category could find itself in growth mode again.

Health Canada plans to resume a review later this year of the five-year-old Tobacco and Vaping Products Act (TVPA).

Smoke on a black background

Regulation of the sector, which was once likened to the Wild Wild West, aimed to make vaping products less attractive, affordable and accessible to youth. However, critics say regulatory decisions have also treated vaping as equally harmful to adults as smoking cigarettes, despite stakeholder wide agreement that it is in fact less harmful.

The Convenience Industry Council of Canada is reaching out to politicians to “discuss the role for c-stores in communicating health benefits of vaping.”

That comes on the heels of a government report of the first legislative review of the TVPA in December 2022, acknowledging, “the majority of adults who currently smoke are not aware that vaping products are less harmful than using tobacco products. Work could be undertaken to communicate the relative risk of smoking, in comparison to vaping, to people who smoke.

“These measures could include assessing the merits of developing relative risk statements and requiring the tobacco industry to use prescribed messages in cigarette packages and updating website materials,” reads the report.

The CICC is also lobbying for convenience stores to be separated from specialty vape shops in the reporting of youth access, given no other retail channel manages age compliance as well as convenience, it contends.

C-stores also say there is still lots of innovation going on in the sector, even if there are fewer players. 

vape pen vector

“We have recently added new products to our vaping category,” says Muhammad Zeeshan, category manager – tobacco, for MacEwen/Quickie.

That includes expanded choice in the disposable vape category, including brands STLTH and Waka Mini and Waka Solo. The latter comes in flavours like blueberry, cherry-lime, pineapple and yogurt. However, the flavoured options can only be sold at counters in Quickie’s Quebec c-stores.

“We will continue to add throughout 2023 to ensure that we can meet consumer demand,” adds Zeeshan.

Marc Goodman, VP and GM of 7-Eleven Canada, also sees lots of potential for vaping-type products.

“It is still an underdeveloped category compared to places like Europe, and we are all supportive of people moving from cigarettes to a harm- and risk-reduced category like vape,” says Goodman. “There is lots of room to grow, but the difficulty has been retailers can’t advertise that they carry these products and the companies that make harm-reduced products can’t really talk about them, either.”

“And so, it has been challenging to help move people from the traditional combustible cigarette to a harm-reduced product,” he adds.

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