US Research: Revisiting the Vape Market in Los Angeles
Reporter from Los Angeles: How Has California's Vape Market Evolved After the Flavors Ban?
TPE24 is approaching, and our reporter has sent field personnel to explore the offline vape market in the U.S. What changes have occurred in California's vape market in 2024, the largest state economy and a major vape consumption hub? One year after the flavors ban, what role do disposable vapes still play in the market? Which vape products have stood out? How has the legalization of cannabis products affected the market ecosystem?
Policy Background: California’s Vape Flavors Ban
On December 21, 2022, California officially implemented a ban on flavored tobacco products. The ban requires retailers to stop selling all tobacco products containing flavored additives, including flavored vapes, e-liquids, pods, and other related accessories. The goal of the ban is to reduce youth smoking rates and decrease health risks associated with smoking. However, the ban has been controversial, with many businesses and consumers arguing that the measure is too harsh and has had a profound impact on the market.
In a state like California, where the vape market is well-established, the ban has undoubtedly altered consumer purchasing habits and business strategies. Especially in Los Angeles, one of the largest vape-consuming cities in the U.S., businesses have come up with a variety of responses. Amid market pressures and policy restrictions, California's vape industry has undergone a significant reshuffling.
A Year After the Flavor Ban: Market Observations
In January 2024, the reporter visited several vape wholesalers near Los Angeles City Hall. These wholesalers typically serve business customers and offer a wide range of vape products from various brands and types. During a conversation with one wholesaler, the staff revealed that due to customs delays, they could only sell existing inventory, which primarily consisted of the Flum Pebble series, with top-selling flavors like Berrymelon Ice, Blueberry Mint, and Greenapple Watermelon.
Although the flavor ban restricted the sale of fruity and sweet-flavored tobacco products, the merchants did not feel powerless. In fact, the challenges posed by the ban have prompted them to seek new opportunities in product naming and sales strategies. One store owner shared with the reporter, “Although the flavor ban has impacted our business, we always find ways to work around it. For example, we can name our products in Spanish or use numerical naming to bypass the ban’s restrictions.” He added, “No matter the policy, there are always loopholes to exploit.”
Store owners also mentioned that, while there have been some enforcement actions since the ban was implemented, the enforcement intensity has not been strong. In most cases, authorities have simply confiscated the related products without imposing additional fines on the businesses. Therefore, the losses for merchants are mainly tied to the cost of the confiscated goods, rather than additional economic penalties.
Market Strategy Adjustments and Transformation
As the flavor ban has progressed, more and more businesses have adjusted their strategies. Some have opted to abandon disposable vapes in favor of open or refillable vapes, which are generally unaffected by the flavor ban. Others have chosen to sell only the devices, ceasing to offer e-liquids or disposable products. During the reporter's visit, one store had even decided to exit the vape business entirely, focusing instead on selling hookah and other tobacco products.
A store owner specializing in hookahs explained, “Since the flavor ban was enacted, our vape sales have significantly dropped. But we’re not discouraged because we don’t rely solely on vapes—hookahs, cigarettes, and other tobacco-related products still have strong market demand.”
In fact, the market’s diversity has provided more options for these businesses. Despite the restrictions, some have seized the opportunity to expand sales channels for other tobacco-related products, minimizing the impact of the ban.
The Rise of the Cannabis Market and Competition with Vapes
In addition to vapes, cannabis has also rapidly gained market share in California. Since the state legalized medical cannabis in 1996 and recreational cannabis in November 2016, the cannabis industry has become a significant part of California's economy. According to a report from the California Department of Tax and Fee Administration (CDTFA), cannabis tax revenue for the third quarter of 2023 reached $269.3 million, with $156.9 million coming from cannabis consumption taxes, demonstrating the enormous potential of this market.
This trend has also affected the vape industry. As the cannabis market expands, many vape retailers have started shifting their focus to cannabis-related products, particularly e-liquids containing CBD (cannabidiol) and THC (tetrahydrocannabinol). Several business owners interviewed by the reporter stated that while the regulatory environment for vapes has become increasingly stringent, the legalization and broad acceptance of cannabis products have provided a more lenient operating space.
One shop owner, formerly focused on selling vapes, told the reporter, “We can now legally sell CBD and THC vapes, which attract more customers than traditional vapes.” He explained that cannabis products, especially CBD, have become their store's primary focus, while vapes are now relegated to the back corner of the store.
Chinese Manufacturers Compete for the California Market
In California’s vape market, Chinese vape brands are undoubtedly one of the main competitors. During visits to several wholesalers, the reporter found that many of the businesses frequently hosted Chinese vape sales representatives. One store owner shared, “Just the other day, we had three groups of Chinese vendors pitch different vape brands to us, and this morning, another group walked through.” These sales reps brought a wide variety of vape products, including disposable vapes and refillable vapes, which filled nearly all the store's shelves.
According to a report from the well-known market research firm WSPM, in the second quarter of 2023, the top five vape brands in California were FLUM, ELFBAR, LOST MARY, FUNKY REPUBLIC, and EB DESIGN. These brands captured significant market share, with best-sellers like FLUM and ELFBAR focusing on disposable vape lines, while FUNKY REPUBLIC and EB DESIGN stood out through innovative designs and more flexible product strategies.
As one of the largest economies in the U.S. and a key global consumer market, California is a strategically important location for Chinese vape manufacturers. Several wholesalers visited by the reporter noted that, despite regulatory restrictions in California's vape market, Chinese manufacturers are still investing heavily in product development and marketing. Whether it's changing flavors or innovating product designs, Chinese manufacturers are actively adapting to local market demands.
Looking Ahead: Opportunities and Challenges for California's Vape Market
With TPE24 around the corner, industry attention is increasingly focused on the future of California's vape market. Although California’s vape market has gone through a turbulent period due to regulatory pressures, the industry’s ongoing adjustments and the emergence of new products suggest that California will remain one of the world's most important vape markets.
Some industry experts believe that while the flavor ban has had a negative impact on the vape market in the short term, demand still exists. By adjusting strategies, such as shifting focus to open-system vapes, refillable products, and cannabis-related items, businesses have found new pathways. Moreover, as the cannabis market continues to develop, the rise of CBD and THC vapes may become a new growth point.
Regardless, the future of California’s vape market remains uncertain. As TPE24 approaches, industry experts will share more insights on product trends, policy directions, and market dynamics, helping stakeholders navigate the upcoming challenges.
Conclusion:
Since California implemented the vape flavor ban, the changes in the market have had a profound impact on the entire industry. Some businesses have shifted their focus to open-system or refillable vapes, which are not directly affected by the ban. However, other businesses have turned their attention to cannabis-related products, especially CBD and THC vapes, leveraging the legalization of cannabis to expand their product lines. For these businesses, the rise of the cannabis market has provided greater operating space, especially as the regulatory environment for vapes tightens. Moving toward cannabis products has become a viable strategy.
As a major global market for both vapes and cannabis, California’s market shifts have a direct impact on the U.S. and global vape industries. Despite increasingly stringent policies, businesses continue to innovate and adjust their strategies, finding ways to survive in an intensely competitive market. Moving forward, with further legalization of cannabis products and continuous upgrades in vape technology, California will undoubtedly remain a critical barometer for the global vape industry.
At the same time, Chinese vape brands are becoming increasingly competitive in California’s market. Many store owners say that Chinese manufacturers are not only investing heavily in product development but also quickly adapting to market demands through innovative designs and flexible product strategies. Particularly in the disposable vape sector, brands like FLUM and ELFBAR dominate, with their strong sales and market acceptance, firmly capturing the attention of California consumers.
Despite facing challenges like the flavor ban and other policy pressures, overall, California's vape market remains dynamic. Merchants are continuously adjusting their strategies and finding new growth opportunities. Furthermore, with the continued expansion of the cannabis market, CBD and THC vapes could become a new highlight, further driving the industry's diversification.