What’s next?

| August 30, 2017

An interview with Pamela Gorman, executive director of SFATA

By Maria Verven

Pamela Gorman

Pamela Gorman

The largest and leading trade association in the vapor industry, SFATA—the Smoke-Free Alternatives Trade Association—represents vapor manufacturers, online retailers, brick-and-mortar vape stores, distributors, importers and wholesalers.

Appointed head of SFATA last fall, Pamela Gorman is president of US Vapor, a boutique public affairs firm, and was previously head of government relations for NJoy. She also served as an Arizona state legislator from 2005–2010.

As executive director, Gorman is responsible for all of SFATA’s operations, including communications (internal and external), compliance, vendor management, budgeting, and state and federal government relations.

She spoke to Tobacco Reporter about the most pressing challenges currently facing the industry.

Tobacco Reporter: You’ve been head of SFATA since last fall. What have been your key challenges so far? 

Gorman: The biggest challenge was probably stepping into a role that had been vacant pretty much since the FDA [U.S. Food and Drug Administration] put out their deeming regulations. Basically, I entered into a whirlwind at this point in history for the industry, and so I was trying to correct some deficiencies I saw in our processes while also inspiring our members to help us get the regulations changed. Oh, and I was learning my way around a new company while all of this was happening!

I’m happy with what I’ve been able to accomplish in a relatively short time, though. SFATA had grown by such leaps and bounds that the infrastructure just couldn’t keep up, and it was beginning to cause added frustration to an already stressed-out membership. So I set about to get processes and tools in place to allow our tiny staff to better accommodate the membership, which grew more than tenfold while the staffing levels had actually been reduced. I also made regular and meaningful communication with the members a core activity. Our members are giving us good feedback on all of our recent improvements, as well as the new communication plan, and it is wonderful to see folks increasingly satisfied with our services.

Building the new website and formulating an entirely reinvented membership system so they could both roll out simultaneously was a huge undertaking, but I’m proud of the results. The new True Value Memberships program now lets our members select the level of benefits that best suits their needs and choose a membership type accordingly. Members can also now find more of what they are looking for, manage their own membership accounts and keep up with the latest happenings on a website that actually works!

So, you could basically say that my first several months at SFATA have been about identifying what’s broken, finding a solution that is doable within our financial and staff time constraints, and then carrying out an overhaul of all things SFATA. I’m excited to see how these corrections will make this a better-running trade association going forward.

With less of our time eaten up by chasing data through an archaic manual system, we are now able to turn our attentions toward developing additional value for members through enhanced programming and a dependable level of communication from SFATA so they know where their dues are going each year.

What are your key priorities for the rest of 2017?

Key priorities for the remaining months in 2017 are to get the best possible training information to our members about their options and responsibilities in the new regulatory environment, while also executing on new strategies to get the federal government onto a more reasonable regulatory path for our products.

What effect are the impending FDA regulations having on your members?

Our last survey to shop owners demonstrated an effect that is more about the psychology of what is going on than the actual regulatory impact. People are working on their exit strategies in many cases, not their business plans for the future. It is sad to see this happening to good people who were lead innovators before the FDA regulations became a realistic threat to their livelihoods.

I’ve also seen more and more companies looking to expand to foreign markets, which is probably a good idea if you are able. This will allow these companies to continue to have a revenue stream while we claw back our rights to function as responsible businesses under a federal regulation that actually makes sense.

Do you think the more regulated environment will affect future SFATA membership?

I imagine it will. If there are fewer companies overall, because some simply choose not to continue to try to comply, it would follow that there would also be fewer companies involved in a trade association.

How will the change in membership ranks affect your organization and your ability to be effective?

Like any company faced with a financial strain and commitment to continuing to deliver the highest-caliber services, I’ve had to find ways to do more with less money and less staff than ever before. We are on good footing with our new technology now, such that I can do more in less time. Beyond that, we have also built partnerships that allow me to stretch our operations budget and offer even more value to our members at all levels.

Naturally, with [fewer] members paying dues, there will be less revenue coming into the organization if all else stays the same. This would limit our ability to do all that we would like as a trade association, if we don’t make other changes. So, we are working hard to demonstrate value to those member companies who are investing more to keep SFATA’s operational costs covered, while also providing evidence of value to members (and potential members) of all sizes.

One of the important priorities in reinventing our membership structure was to create a clear return on investment such that those who provide the financial resources needed to sustain the association also have a greater input and engagement in terms of the direction the organization heads in this new reality.

SFATA has always been a broad organization made up of all sizes of companies but has had a particularly strong presence in the [small-business] and microbusiness segment of the industry. We know our “story” is about American small businesses, and we never forget this is our strength and that it is worth protecting. So we have worked to keep a low-priced “basic” membership in our mix of new offerings for those that just want to continue to have the same sort of membership benefits as always.

What do you think is the biggest value of being a member of SFATA?

Honestly, I’ve learned the answer to this is different for each member. I believe our seat at the table representing the broad vapor industry’s interests in important federal discussions is key. To be honest, my history in lawmaking, and then advocating for lawmaking, makes our time at “the table” more meaningful than perhaps many members even realize. But our members come in all sizes and all levels of business acumen. So, for some, the biggest value may have more to do with our trainings and information we share. For others, the networking with other companies to get ideas, leads on new business or even solutions to operational problems is huge.

SFATA membership is made up of both small-business owners and representatives from Big Tobacco. Is it possible to represent both? What conflicts do you run into? What are some of the ways these different members work together?

SFATA membership is varied, though Big Tobacco has not joined our organization. But I have an easy fix to any possible “conflicts” that might arise among our members that would work even if Big Tobacco were to become SFATA members someday.

All of our policy positions are published on our website, and all members are able to see what we are working to accomplish in public policy. In essence, we work on policy positions that keep the market open for competition and that keep these products attractive, accessible and affordable for consumers. These policies are the best for the growth of the marketplace, and those joining SFATA know this is where we are going to come down on policy debates.

If a company in our midst wants to redirect policy such that it would harm another company, or take a competitive advantage by way of government intrusion, they would need to hire a lobbyist and give it a go on their own. SFATA doesn’t choose winners and losers from among our membership companies.

We can and have found ways to work in healthy collaboration with representatives from “Big Tobacco” in the past and will continue to do so as long as the synergies are beneficial to SFATA member companies. While those companies have multimillion-dollar advocacy budgets and can provide resources on the ground, we have the real human story in our SFATA small businesses. Our small businesses matter to policymakers, and I’m sure tobacco folks see this value in working alongside us in battles to protect the market. There have been some instances, though, were we simply cannot work together because their policy agenda would not be in line with SFATA’s own. And that is OK. It is actually perfectly normal, as anyone who works in public policy professionally would tell you.

What do you think the key legislative challenges will be for the rest of 2017 and beyond?

While we have the current FDA deeming regulations in place, with the looming deadlines for the probably impossible PMTA [premarket tobacco product application], this is the “biggie” for now. If we change this, we will still have the ongoing multiple challenges at the state level. I expect those will continue to be taxation, raising the age of purchase, licensing, indoor vaping bans, etc. We must stay vigilant on protecting our marketplace at the state level so there is something left when we overcome the nationwide trouble with the current federal regulations.

There are lots of “what if” scenarios, but the biggest one is: What if the Cole-Bishop bill doesn’t proceed or pass? What next?

If the Cole-Bishop bill [H.R. 1136] doesn’t proceed or pass—incidentally, this is the most likely outcome—we will still have put dozens of lawmakers on the record in support of saving this industry. That is helpful for everything else we are working on at the federal level, which is why we continue to encourage our members to keep in regular contact to educate their own congressmen.

But, without the predicate date change that is the basis of the Cole-Bishop bill, the regulations will have to be changed in order to allow for innovation. Without going too deeply into my nerdy policy wonk explanation, here is why: There are no predicate products now, with the old predicate date cutoff, on which to make improvements and submit them for a “substantially equivalent” approval. Even if a company should manage to get a few SKUs through the onerous PMTA process, those products do not become predicate products that can then be further innovated easily.

So, regardless of what happens—or doesn’t happen—with the Cole-Bishop bill, SFATA is working hard to convince our federal government that the FDA rules are in need of change. There is a ton that can be done by the agencies without Congress taking a single vote. We work on those things alongside the efforts to change the predicate date because all of these things must work together for a sustainable industry marketplace to exist in a year.

There will soon likely be an appeal filed in the R2B/Nicopure case against the FDA [also see xx], and we are hopeful this—or one of the other lawsuits—will move the needle to give us the reprieve we need to continue to confidently plan our business futures.

It is important to remember that government affairs is a “long game” and [to] not lose faith or stop working on a change because you don’t get it the first time—or the 10th time—you try. That is how this system works in America—not even close to perfect, but I believe the best in the world by far.

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