One of the largest independent vaping businesses in the United States is selling off assets and closing the vape shops it hasn’t already sold. AVAIL Vapor, based in Richmond, VA, at one time owned over 100 branded vape shops, a regulatory compliance and consulting business, and a major wholesale distribution company.
The company’s founder and CEO blames the FDA’s chaotic attempt to regulate the vaping industry, along with the COVID-19 pandemic. “It’s completely just a mess with FDA policy making and policy strategy,” AVAIL CEO James Xu told Richmond BizSense. “It just did not make any sense from day one.”
AVAIL began in 2013 with a few vape shops and an e-liquid manufacturing business in Richmond, but Xu had big plans for the modest vape business. And even after the FDA laid out its blueprint in 2014 to cripple the independent industry by imposing burdensome and expensive requirements for market authorization, Xu and AVAIL expanded rapidly, apparently trusting that the FDA would reverse course.
“We believe that FDA regulations and e-vapor consumers’ interests are aligned in that consumers want to know what is in their e-juice,” Xu said in 2015.
“Avail Vapor made the mistake of wanting to dominate the market for products that were long marked for prohibition by the federal government,” American Vaping Association President Gregory Conley told Vaping360.
The small company grew rapidly during the years before the FDA finished its slow walk toward a shadow ban of flavored e-liquid. AVAIL Vapor expanded to over 100 vape shops by 2017, when it began a partnership with tobacco manufacturer Altria. The relationship with Altria soon ended, but AVAIL continued to grow.
AVAIL branched out to become a major contract manufacturer of e-liquid for other brands. It also launched a regulatory compliance business that offered lab services and consulting to vape businesses navigating the FDA’s complex Premarket Tobacco Application (PMTA) process.
In January 2020, AVAIL split into three separate companies:
- AVAIL Vapor, LLC: retail and manufacturing
- Blackbriar Regulatory Services, LLC: contract manufacturing, and FDA compliance consulting and laboratory services
- Blackship Technologies, LLC: research and development services
In April 2020, according to BizSense, AVAIL had 350 employees. In June 2020, the company bought Giant Vapes, a major online vape retailer, and its subsidiary Giant Distribution, a wholesale supplier of e-liquid and vaping products.
Xu told Richmond BizSense that sale of the Blackbriar lab and compliance business is close to being completed, and that Giant Vapes is no longer owned by AVAIL (although the company that owns it is incorporated at one of AVAIL’s addresses). AVAIL sold 30 of its vape shops to North Carolina-based competitor Madvapes in August, and the rest have been sold or closed since.
AVAIL’s own e-liquids are still sold through Giant Vapes. Although the company’s flavored product PMTAs received a Marketing Denial Order (MDO) from the FDA on Sept. 15, the FDA stayed enforcement of the MDO on Nov. 1, pending an administrative appeal. Xu says AVAIL has spent more than $10 million on its PMTAs since the Deeming Rule was implemented in 2016.
“In any other industry, their financial backing and regulatory consultants would have meant something,” says the AVA’s Conley. “But the FDA’s unannounced check-the-box PMTA review process doomed Avail and its employees to this fate.”