By Timothy S. Donahue
Top Takeaways:
- Exclusive Tobacco faces more than $12.4 million in fines, with an additional $431,000 penalty also issued.
- Wisconsin’s 2023 vape directory law is currently under appeal, with arguments before the Seventh Circuit Court on Dec. 10.
- Retail impacts are significant, with at least one store closing and others clearing large portions of inventory to comply.
Wisconsin revenue officials have issued some of the largest vape-related penalties in state history, fining one retailer nearly $13 million and another $450,000 for violating a new law restricting the sale of electronic nicotine products. The statute, which took effect Sept. 1 and is now under federal appellate review, limits retailers to selling only items listed on the state’s approved product directory.
Exclusive Tobacco, a four-store chain with a location in Oshkosh, was fined twice in October after the Wisconsin Department of Revenue (DOR) discovered it was selling products not included among the 303 authorized brands, such as Juul, Blu, Vuse, and Crossbar. According to the Milwaukee Journal Sentinel, DOR received complaints that the store was selling illegal products and operating with an expired municipal license.
During the inspection, DOR seized all tobacco and vape products, including 1,244 illegal vaping devices. The new law imposes a $1,000 daily fine for each unauthorized device, which initially totaled $1,244,000. A copy of the fine reviewed by the Journal Sentinel showed that the penalty was multiplied over 10 days between the department’s warning and its return visit, resulting in a final assessment of more than $12.4 million.
After a follow-up complaint that Exclusive Tobacco continued selling banned vapes, DOR conducted a second inspection and imposed an additional $431,000 fine. The retailer is appealing both penalties, DOR spokeswoman Jennifer Bacon said.
A second retailer, Dave’z Smoke N Vape LLC in Green Bay, was fined $450,000 for selling without a municipal license and selling unauthorized vape products. Neither business made any public comment.
DOR stated that it has also issued 42 orders to remove illegal inventory across the state and conducted 27 product seizures, including two cases involving retailers without proper licensing. Bacon mentioned that expired licenses did not influence fine calculations but did require the removal of all cigarettes, tobacco, and vape products from the premises.
State officials initially held back from issuing fines during the first weeks after the law took effect to give retailers time to comply. Enforcement now follows the procedures set in the 2023 law, which established Wisconsin’s vape product directory.
The legality of that directory is still being challenged. In September, U.S. District Judge William Conley refused a request to stop the law from taking effect. The industry plaintiff—Wisconsinites for Alternatives to Smoking and Tobacco (WiscoFAST)—has appealed, and the Seventh Circuit Court of Appeals was set to hear arguments on Dec. 10. A decision is expected in late January, WiscoFAST president Tyler Hall said.
Similar litigation has yielded mixed results in other states: a federal court blocked Iowa’s vape directory law earlier this year, while Utah’s was upheld.
Retailers told the Journal Sentinel that many shops have adapted by removing non-compliant products, though some stores have not survived the transition. Xtreme Vape in Antigo closed after the district court allowed the law to stay in effect, with owner George Packard saying his business relied on vapes for 90% of sales.
“We had six employees, and every one of them lost his job,” Packard said, adding that he is now left with $40,000 in unsellable inventory. Even if the appeal succeeds, Packard said he does not plan to reopen.
