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SB 918

Business Regulation - Electronic Smoking Devices Manufacturers - Certifications

2025 Regular Session Introduced by Dawn Gile

SB 918 tightens ESD oversight with annual AG certifications, a public directory, escrow funds, new licenses, and limits on direct-to-consumer sales to curb uncertified products.

Hearing 2/27 at 1:00 p.m.
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Bill Summary · SB 918

SB 918 — Business Regulation: Electronic Smoking Devices (ESD) Manufacturers — Certifications

Status: Hearing scheduled Feb 27 at 1:00 p.m. (Introduced Jan 24–28, 2025)
Primary sponsor (in provided text): Senator Gile. Companion: HB 1441.

Purpose / Intent

SB 918 creates a new, tighter regulatory framework for electronic smoking devices (ESDs) in the state by (1) requiring annual certifications and an Attorney General-maintained public directory of ESD manufacturers, (2) imposing escrow/financial obligations on certain manufacturers, (3) changing licensing and distribution pathways for manufacturers, wholesalers, importers, retailers and vape shops, and (4) increasing penalties and civil enforcement tools for noncompliance. The bill aims to better track manufacturers and brands, limit unregulated ESDs in the market, and strengthen enforcement.

Key provisions

  • Definitions: Clarifies “electronic smoking device” to explicitly include nicotine salts, cartridges and tanks but exclude FDA-authorized nicotine-replacement drug/device products and separately sold batteries/chargers.
  • Certification & Directory:
    • Requires each ESD manufacturer to execute and deliver an annual certification to the Attorney General (similar in concept to tobacco escrow/certification schemes).
    • Requires the Attorney General to create and publish a public directory listing manufacturers and associated brand families that have complied with certification requirements.
  • Escrow / Financial obligation:
    • Requires ESD manufacturers to place specified funds into a qualified escrow account under certain circumstances (modeled after Maryland’s tobacco escrow requirements for nonparticipating manufacturers).
  • Licensing and distribution changes:
    • Requires separate ESD licenses for persons who also hold cigarette or other tobacco product (OTP) licenses and wish to manufacture/distribute/sell ESDs.
    • Raises application fees: ESD manufacturer application fee increases from $25 to $300; ESD wholesaler distributor/importer fees increase (from $150 to $300 for certain licenses).
    • Restricts distribution channels:
    • ESD manufacturers may no longer ship directly to consumers; they must sell to licensed ESD wholesaler distributors or licensed ESD wholesaler importers. (Manufacturers that also hold retailer/vape-shop licenses may transfer inventory for on‑site retail sale.)
    • ESD retailers and vape shops generally must obtain product from licensed wholesalers or importers (not directly from manufacturers), except where the retailer or vape shop also holds a manufacturer license.
    • Wholesaler importers must obtain at least 70% of their ESD from licensed ESD manufacturers located abroad.
  • Enforcement & penalties:
    • Sale, possession, or importation of any ESD produced by a manufacturer not listed in the Attorney General’s directory (or an ESD/brand not in the directory) is a misdemeanor punishable by up to $5,000 and/or up to 1 year imprisonment.
    • Such violations are declared unfair, abusive, or deceptive trade practices under the state Consumer Protection Act, subjecting violators to civil remedies, administrative penalties, and possible license suspension or revocation.
    • The Alcohol, Tobacco, and Cannabis Commission (ATCC) may conduct unannounced inspections to ensure compliance.

Who is affected

  • Directly: ESD manufacturers, ESD wholesaler-distributors, ESD wholesaler-importers, retailers, vape shop vendors, and related licensees.
  • Indirectly: Consumers, importers, state enforcement agencies (ATCC, Attorney General), and small businesses in the vaping supply chain.
  • Financially: Small businesses and out-of-state manufacturers may face increased compliance costs (licensing fees, escrow deposits, administrative certification) and altered distribution business models.

Fiscal and policy impacts

  • Fiscal note estimates at least modest revenue increases beginning FY2026 from higher fees (general fund + special fund amounts cited), and indeterminate general fund increases for enforcement costs. The bill is expected to meaningfully affect small businesses in the ESD industry.
  • By limiting direct-to-consumer manufacturer sales and restricting products to those certified and listed, the bill may reduce supply of uncertified ESD products and shift transaction flows through licensed wholesalers/importers.

Procedural / Timeline notes

  • Introduced in late Jan 2025; hearing scheduled Feb 27 (per provided status). In the provided fiscal/readers’ materials, the bill was assigned to Finance. (Documents also show sponsor and drafting materials; procedural histories across sources were inconsistent—this summary relies on the Maryland-text materials supplied.)

If you want, I can:
- Produce a one-page summary tailored for affected small businesses (licenses, compliance checklist, timeline), or
- Draft the specific compliance steps ESD manufacturers would need to meet the certification/escrow requirements.

Compiled from official sources — confirm details with the bill’s official record.

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