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Whatcom County vapor manufacturer moving to Arizona

Mt. Baker Vapor store manager Tim Lee vapes in the store south of Lynden on Wednesday, June 10, 2015. The company is moving its production facility to Arizona because of the possibility of new Washington state laws that would restrict online sales and impose new taxes on e-liquid. The store will remain in Whatcom County.
Mt. Baker Vapor store manager Tim Lee vapes in the store south of Lynden on Wednesday, June 10, 2015. The company is moving its production facility to Arizona because of the possibility of new Washington state laws that would restrict online sales and impose new taxes on e-liquid. The store will remain in Whatcom County. The Bellingham Herald

A Whatcom County company has decided to move to Arizona partly because of proposed state legislation that the owners say would cripple operations.

Mt. Baker Vapor will move its manufacturing/warehouse division, a transition that’s expected to be completed by October, according to a news release from the company. The retail store, which is at 7159 Guide Meridian Road near Lynden, will remain in place, said Kenny Spotz, a spokesman for the company.

Mt Baker Vapor sells a variety of products, from e-cigarette starter kits to nicotine juice, selling much of it online at mtbakervapor.com.

The company employs 130 people, most of whom work in the manufacturing division that’s moving to Mesa, Ariz., Spotz said.

The co-owners, James Thompson and Jess Webb, are concerned that Washington state Legislature is on the verge of enacting rules that they believe would cripple the business. Current proposals in the legislature would impose a 45 percent excise tax on wholesale sales of e-cigarette cartridges and liquid nicotine bottles, and an online ban of liquid nicotine and other vapor products, according to the Associated Press.

Earlier versions of the bills included a higher excise tax and across-the-board ban of online sales of the products. Spotz said those were reduced after public hearings drew large crowds against the bills. With the reintroduction of the excise tax, the owners came to the conclusion that the legislative climate was not good for the industry.

“While we have enjoyed our time building this company in Washington, it has become clear to us through continued proposals by the legislature that our company and those it employs are not welcome in this State,” Thompson said in the news release. The company was founded in March 2011.

While there also has been discussions of excise taxes on vapor products in Arizona, Spotz said the governor there has said that state has no plans to raise taxes.

“Arizona appears to offer a significantly more inviting political climate,” Spotz said.

Others in the industry are concerned that this legislation would do more than drive companies in this industry out of the state.

Ken Karnath, who owns Puffin E-Juice in Edgewood, said he got into this business because he wanted to help people stop smoking cigarettes. That’s something he said he’s seen happen, although many medical experts are unsure about how much e-cigarettes help smokers quit. Karnath is concerned that the higher tax rate will cause e-cigarette users to switch back to regular cigarettes or hamper the industry to the point that a black market e-cigarette industry emerges.

“If the tax goes through, the (lost) jobs at Mt. Baker Vapor will be just the beginning,” Karnath said.

Washington House leaders have said the goal is to keep high school students from getting addicted to nicotine, according to a recent Associated Press article. Along with an excise tax, part of the proposed legislation would raise the smoking age of vapor and tobacco-burning cigarettes to 19.

“The fundamental goal of everybody at the table has been to get e-cigarettes and all tobacco-related products out of the high schools,” said state Rep. Reuven Carlyle, D-Seattle, to the Associated Press. “There’s a general agreement that this a sensible way to go forward on that.”

Reach Dave Gallagher at 360-715-2269 or dave.gallagher@bellinghamherald.com. Follow him on Twitter at @BhamHeraldBiz and on Facebook at BellinghamHeraldBusiness.

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