E-Cigarette Ban Could Fuel Black Market, Says Couche-Tard CEO
(Bloomberg) -- The head of convenience store giant Alimentation Couche-Tard Inc. cautioned policy makers against taking draconian measures against e-cigarettes after a wave of serious respiratory illness and deaths linked to vaping, saying it could end up feeding the black market.
“If there’s just outright bans and you’ve got clear consumer demand, grey and dark markets are going to dominate,” Couche-Tard Chief Executive Officer Brian Hannasch said in an interview after a shareholder meeting near Montreal. “Then you lose control over the quality of the supply chain.”
The U.S., where teenage vaping in on the rise, has seen an outbreak of a mysterious illness affecting users of cigarette alternatives. On Wednesday, Canada reported its first case of a youth diagnosed with a severe respiratory ailment linked to vaping. Michigan and New York have announced bans on most flavored vaping products and the White House said it would propose legislation aimed at cutting youth consumption.
Hannasch said it’s unclear yet what caused the illnesses. Open-source devices -- vaping pens that take refills from any source -- are said to pose a higher risk, and Couche-Tard won’t sell them, he said. The company also supports raising the legal age for e-cigarettes to 21.
Couche-Tard, which built a network of more than 16,000 stores and fuel station from Louisiana to Norway through waves of acquisitions, wants to double earnings in the next five years.
Co-founder and Chairman Alain Bouchard also envisions the company becoming a key player in the cannabis business in North America. After two agreements to grow a footprint in Canada, where recreational pot is legal, it’s started to sell a small range of CBD products in some stores in the U.S. and Ireland.
CBD, a cannabis compound, has been touted as a potential treatment for a number of ailments. Unlike the THC molecule, it doesn’t produce a buzz.
“We have no doubt that the business will be large. We have no doubt we can play well in that business,” Hannasch said. “But we’ll also need to make sure that the returns are there, the customer acceptance is there.”
Michael R. Bloomberg, the founder and majority owner of Bloomberg News parent Bloomberg LP, has campaigned and given money in support of a ban on flavored e-cigarettes and tobacco.
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