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Chinese E-cigarette Maker, iMiracle, Exploits Regulatory Loopholes , Propelling Global Vaping Backlash

by Anna

In just two years, the small and colorful Elf Bar vaping device by Chinese company Shenzhen iMiracle has become the most popular disposable e-cigarette globally, generating billions in sales. However, the company, along with other Chinese e-cigarette makers, has been accused of importing products worth hundreds of millions of dollars while evading customs, taxes, and import fees. Records reveal that makers of disposable vapes routinely mislabel their shipments as “battery chargers,” “flashlights,” and other items to hinder efforts to block products that are contributing to teen vaping in the U.S.

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Last week, U.S. authorities publicly announced the seizure of 1.4 million illegal, flavored e-cigarettes from China, including Elf Bar products, estimated at $18 million in value. Elf Bar and other iMiracle brands, such as Lost Mary, are expected to generate $3.5 billion to $4 billion globally in 2023. The company has faced trademark disputes and efforts by regulators to seize its imports. To comply with regulators, iMiracle rebranded Elf Bar as EB Create in the U.S. with flavors like watermelon ice and frozen creamsicle.

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iMiracle’s parent company, Heaven Gifts, has been accused of helping customers evade import fees and taxes, promoting “discreet” shipping methods and marking lower values to avoid taxes. Although iMiracle’s spokesman claimed they stopped shipping Elf Bar to the U.S. earlier this year, records show that the company, along with other disposable makers like Esco Bars and Magellan Technology, has been mislabeling shipments and using third-party shippers to obscure identities and products.

The global backlash against disposable e-cigarettes could lead vaping entrepreneurs to focus more on the U.S., where loopholes and lax enforcement make it easy to disguise e-cigarettes among the thousands of daily shipments arriving by sea and air.

The rise of disposable e-cigarettes in the U.S. can be linked to regulatory actions by Chinese authorities. While encouraging exports, China drastically curtailed its domestic vaping business, bringing it under the control of the state-run tobacco administration. The flavor ban on e-cigarettes, which had seen significant sales increases, was perceived as a move to protect traditional cigarette sales, generating $200 billion annually for China’s state-run tobacco monopoly.

As countries worldwide consider measures to ban disposable e-cigarettes, citing underage use and environmental concerns, the global backlash may lead vaping entrepreneurs to focus more on the U.S. where regulatory loopholes facilitate their entry.

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