As R.J. Reynolds rolls out an e-cigarette, the company is lobbying to keep out small competitors, according to Matthew Bandyk at the Daily Caller:
Under the bill, any dealer of vapor products must obtain a license, carrying an annual fee of $250, and agree to purchase only from suppliers who hold wholesale tobacco licenses.
The wholesale license has its own fee but, more significantly, requires applicants to put up a $25,000 bond, according to [e-cigarette retailer Rob] Ragan. Because his VaporKings stores import their products from China, the legislation would require him to establish his own wholesale business just to legally supply his own retail businesses. ...
Small e-cigarette businesses in the state that can’t put up the cash for a wholesale license would be forced to buy from existing wholesalers, because the bill reclassifies vapor products as tobacco. As a result, the types of products they can put on their shelves could be severely limited.
On a related note, the 2009 Family Smoking Prevention and Tobacco Control Act — supported by Philip Morris, and known as the Marlboro Monopoly Act — is keeping new entrants out of the cigarette industry, reports Jacob Grier at the Atlantic.
This is what regulation is often about: protecting big incumbent businesses from competition by smaller guys or new entrants.