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E-liquid retailer license revoked amid Indiana vaping laws scandal

Posted by Matt Rowland on

When Indiana recently passed new statewide e-cig regulations, the Indiana Alcohol and Tobacco Commission (ATC) was named as the official “gatekeeper” for the related approval process.  Local vape shop owners almost immediately began claiming that the ATV was showing preferential treatment to certain high-powered retailers while the smaller “Mom and Pop Shops” were being left out in the cold.  But when one recent application was unanimously approved by the ATV after the related company was later found to be non-compliant, the Indiana vaping laws fell under further scrutiny.

The California-based manufacturer named the Cali Co-Packing LLC company was originally granted a license to become the seventh Indiana retailer of e-liquid.  But when the hired security firm of Lock-Up Inc. discovered that the application had been approved, its CEO Frank Khonsari was shocked.  According to Lock-up information, Cali Co-Packing LLC lacked the proper credentials to gain state approval, and this information was clearly noted on the application.  Or was it?

"(The Cali Co-Packing Company) hired us to do the certified locks for him…There are boxes checked on that form that I did not check. The signature is mine, but I did not check those boxes because I don't even know what they are, and they did not hire us to do that work."
-Frank Khonsari, CEO Lock-Up Inc.

Khonsari states that after his team checked the boxes for the appropriate certifications on the ATC application, the form was then sent back to the Cali Co-Packing for future submission to the Indiana ATC.  Somewhere along the line, new boxes were checked for three, very important, state-required credentials which the company lacked, including those for the International Door Association and the Door and Hardware Institute.  The company also lacked certification by a national locksmith group.  With these three boxes now mysteriously checked, the ATC approved the application, apparently without verifying that the credentials were indeed accurate.

Indiana vaping laws: More questionable practices

It was also later discovered by the Indianapolis Business Journal (IBJ) that the Cali Co-Packing Company had previously tried to hire another security firm named the Bay Alarm Company, which also did not meet the state requirements.  According to IBJ, representatives of the e-juice retailer asked the Bay Alarm Company to “stretch the truth and resubmit an application with overstated qualifications, which it wouldn’t do.”

This latest series of events only seems to underscore the claims by several Indiana vape shop owners that the ATC approval process is already highly corrupt.  Some even say that the regulations, which require manufacturers to sign a five-year agreement with a qualified security firm, are essentially written to favor a single firm.

That firm is Mulhaupt’s of Lafayette, and it appears to be the only company in the state that currently holds all of the state-required certifications and credentials.  While Indiana Senator Ron Alting promises to ensure that the Indiana vaping laws are rewritten to avoid the creation of such monopolies in the future, dozens of Indiana e-juice manufacturers are worried that they may go out of business in the meantime.



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  • It just absolutely boggles my mide, how a state can (Indian) can require such things. This is just killing small businesses, and creating more chaos than anything els. I’m not sure what they are trying to accomplish. But it all seems super sketchy to me. I know what state I will never be visiting.

    Matthew on

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