I am employed at a retail store of e-liquid vaporizers and accessories.
Whether you have read the FDA's 500 page proposal or not, they may or may not pass harsh nationwide regulations on our products within a year or two.
When/if that happens our owner wants to turn said store into a membership club where persons pay a membership fee to get in.
This is not an easy question to answer here, but I can tell you the factors implicated and that, if you care about the future of your business, you should make an investment in legal representation to know where your business and the legal landscape is headed.
Federal law touches virtually every aspect of business. Where it hasn't decided to regulate, the State has. And even where the State has regulated, the Fed can come in and preempt if the business or products are involved in "interstate commerce" (marketing, production, transportation, etc.)
It appears the Feds have decided to regulate even the retail sale and distribution of e-cigs now. That said, once the Fed has laid down the base line of regulation, your best case scenario is that the state doesn't come in and raise the standard even higher. States can always require more, but never less than what the state does.
Making your business a "membership" model may or may not matter. On the one hand, you are not marketing to the public. However, that which you are selling even to your members are products obtain through interstate commerce. Therefore, if you want to sell them, even to your members, you have to comply with the legal requirements for sale of such items.
Either way, get a lawyer, a good one. Your business is like your baby, and a good lawyer is like its Doctor. Your business deserves at least that much.
This is not advice but a statements of a general nature and not meant in any way to form an attorney/ client relationship. This advice is not to be relied upon legally operative, and not to be construed as advice for any particular matter. Seek a formal relationship with an attorney in your area who can address your concerns and your matter.
Turning your business into a membership club is not going to avoid regulations by the FDA. For example, Costco and Sam's Club are both membership clubs that make products available for purchase to its members. However, this does not prevent them from having meat that is FDA approved in its butcher shop. The same will be true here. Just because you charge a membership fee will not mean that you can avoid or ignore FDA regulations on e-liquid vaporizers and accessories.
No one can avoid the FDA regulations by such plan. A qualified regulations lawyer’s advice will be instrumental. The information presented herein is for general purposes only. It is not intended to, and may not be construed as legal, tax or accounting advice. For specific advice, please consult a local counsel. Good luck. Zaher Fallahi, Business and Tax Attorney, CPA, MBA, MS, JD.
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