Around Thanksgiving 2019, two months after Governor Andrew Cuomo signed an executive order that banned sales of flavored vaping products in New York, Taobi Silva thought he’d give the vape business another shot.
Rob Ermolovich, the owner of a shop called Fluid Vapor and a local e-liquid manufacturing business, had given Silva a call, asking if he’d be interested in some kind of partnership. Silva and Ermolovich knew what was coming, as did many in the industry. Consumers, shop owners and manufacturers had already started to see prohibition as an inevitability, and had begun to prepare accordingly.
They weren’t wrong. Though a State Supreme Court justice eventually blocked Cuomo’s executive order months later, the governor soon managed to get what he wanted. On April 3, just past 3:30 am, the New York State Assembly passed a budget that included a flavor ban. It remains in effect.
But while everybody else was panicking, Silva was not. He felt, rather, the opposite. He is a member of the Shinnecock Nation, the 1,500-person tribe outside of South Hampton, Long Island. And he saw a distinct opportunity.
Because they are members of the tribe and conduct business on their sovereign land, the New York State flavor ban does not apply.
In March, on the reservation where his family has run a smoke shop for generations, Silva and his uncle, Jonathan Smith, opened up a brand-new, sister vape shop—to which, because they are members of the tribe and conduct business on their sovereign land, the New York State flavor ban does not apply.
Ermolovich had spotted this opening and had a proposal: He would close his storefront in Bohemia, about 40 miles west of the reservation, and set up his operations at Silva’s. So since the middle of March, that’s exactly what he has been doing—making his signature e-liquid in the back of the shop and selling it to his recurring customer base, which Silva estimated to be in the hundreds. Even during the COVID-19 shutdowns, their walk-up and drive-thru business remained steady. It also remains completely legal.
“Several smoke shops here, like mine, had tried vaping years ago, and the market was flooded with brands and flavors and strengths,” Silva told Filter. “To get into it, however, you’re talking about a five-figure investment into these products. And, before Juul, you didn’t even know who the leader was. Things, obviously, are different now.”
Because only Shinnecock tribe members can own property on tribal land, Silva had to hire Ermolovich and his wife, Kim, as 1099 subcontractors. The couple brought with them not only their loyal patrons, but also their e-liquids, registered with the Food and Drug Administration (FDA), which Silva hopes one day to put into disposables or pod-based cartridges compatible with Juul*—the latter of which are almost all currently banned under federal policy.
Silva said that he was unaware of any other Native American reservation in New York State where flavored e-liquids are being manufactured, and believed that he and Ermolovich could very well be the sole example of this sort of partnership.
As it turns out, that might not be the case. Filter later spoke with another e-liquid manufacturer in the state, who requested anonymity out of fear of reprisal.
“The best way to describe it,” he said, treading carefully as he outlined a similar scenario, “is that a manufacturer in New York State helped a Native American set up a new business to sell [the manufacturer’s] flavored e-liquid on sovereign land.”
There are plenty of rumors, too. Several vape shop owners around Buffalo and Niagara Falls, for instance, insisted off-the-record that rivals had packed up and somehow moved onto neighboring Native land, probably by partnering up as Silva and Ermolovich did.
It was less a question of if this would happen, and more of when.
It wasn’t possible to independently verify these claims, but they seem plausible when the scenario was not necessarily unfamiliar or unpredictable. Last fall, when Washington State issued a flavor ban that would later be reversed, local tribes were reportedly torn on whether or not to follow suit.
It was less a question of if this would happen, said Andrew Osborne, the vice president of the New York Vapor Association, and more of when—as the entire vape economy in New York and other restricted states has begun to shift to gray and illicit markets following the pandemic and a variety of prohibitive measures. (For manufacturers, there is also the anticipation of having to file what many claim to be exhaustive and expensive premarket tobacco product applications, or PMTAs, with the FDA in September.)
Flavors, much of the industry asserts, constitute a bulk of sales, and without them, most vape shops would simply shutter. Vape shop owners and e-liquid manufacturers have been forced to stop altogether, or to defy their state governments and get creative with workarounds.
“The reservations are certainly part of that gray market and will keep being so,” Osborne told Filter. “In the immediate days after the flavor ban, people were either calling or coming to my store, and telling me that reservations still had flavors available.”
“If I didn’t have a business partner,” he continued, “I’d have more seriously considered moving to the reservation myself somehow.”
It’s not just the ability to produce and sell flavors that’s appealing. New York State’s 20 percent excise tax on vapor products and nearly 9 percent sales tax also do not apply to the Shinnecock and other tribes. Essentially, Silva said, patrons can spend almost 30 percent less than they normally spend, and nobody has to worry about breaking the law.
The Shinnecock Nation’s Office of Tribal Tobacco Products (OTTP) regulates the industry on the reservation, and so far, there has not been much concern about vaping.
“The OTTP will continue to monitor the totality of the e-cig debate and will advise and recommend any necessary regulations or public-health concerns with the Council of Trustees,” Bryan Polite, the tribe’s chairman, wrote in an email to Filter. “The Shinnecock Nation takes great pride in our self-governance on our ancestral territory, but also has always understood the enormous responsibility.”
Yet the issue with tobacco has always been a contentious one. Native Americans and Native Alaskans have “the highest prevalence of cigarette smoking among all racial/ethnic groups” in the United States, according to the Centers for Disease Control and Prevention, and the Shinnecock and New York have often butt heads about it: They’ve long been engaged, especially, in back-and-forth litigation about the tribe’s right to sell untaxed cigarettes.
Flavored vapes, far safer than cigarettes, are nonetheless equally contentious in New York legislators’ eyes.
Most recently, however, the Shinneock Nation has made news after building a pair of massive billboards on their land, much to the chagrin of the wealthy Hamptonites who drive past them on the way to the beach. Over the last year, the Shinneock have been battling local and state governments in court for the right to construct them, and in May, the State Supreme Court sided with the tribe.
The members thought the billboards—which they refer to as “monuments”—could bolster their economy by attracting the Hamptons’ high-end clientele to purchase luxury brands on the reservation. They saw an opening, just as Silva did with flavored vaping products.
But like the builders of the billboard, Silva hasn’t had things all his own way.
“I’m going to speculate, but I think the black market is still so significant that we’re not seeing any spillover,” he said of his solid business so far. “You would figure that we’d be stampeded. That’s not been the case.”
“It’s not disappointing,” he continued, “but it’s not meeting my growth expectations.”