We have previously written about the increasingly important distinction between FDA compliance and state-level market access requirements. A product may have a federal regulatory posture, but that does not necessarily mean the product can lawfully be sold in every state. Wisconsin’s recent enforcement action against Maduro Distributors, Inc., the Minnesota-based company behind the Loon vape brand, serves as a prime example of this, as well as a significant financial warning to nicotine product manufacturers nationwide.
State directories are a condition of market access and, at least according to Wisconsin regulators, a manufacturer may face substantial exposure even when it did not sell the products directly into the state. These directories apply to different products in different states – some to all nicotine products, some to vapes and e-liquids only, some to tobacco-derived products, and some to synthetic nicotine.
The issue here arises from Wisconsin’s Electronic Vaping Device Directory, which requires covered products to be listed before they may lawfully be sold in the state.[1] Beginning September 1, 2025, Wisconsin authorized a $1,000-per-day forfeiture for each unlisted vaping device sold or offered for sale in the state.[2] The stakes became concrete when Wisconsin imposed a $630,000 penalty against Maduro after regulators spotted unlisted Loon products at two Wisconsin smoke shops.[3]
Loon’s Challenge: “We Didn’t Sell These Products in Wisconsin”
Maduro challenged the fine in federal court, alleging facts that make the enforcement action particularly notable. According to the complaint,[4] Loon products were not added to Wisconsin’s approved directory until October 28, 2025. When Wisconsin found the products for sale in-state prior to that date and fined Maduro, the company maintained that it had never sold directly to either of the two retailers, even providing the Department of Revenue with invoices showing that its first in-state sales occurred on October 31, 2025. However, Wisconsin’s statute expressly addresses products sold through intermediaries, including distributors, wholesalers, and retailers.
A Manufacturer May Not Be Able to Point to Its Distribution Records and Walk Away
A manufacturer might reasonably assume that if its invoices demonstrate that it did not sell a particular product into a state, it has established that it should not be responsible for a third party doing so. Wisconsin’s position suggests that assumption may be wrong. For manufacturers, then, the practical question is more complicated than simply asking whether the company made a direct sale. Manufacturers using distributors, wholesalers, brokers, or other third parties should have procedures designed to prevent products from reaching a state before all applicable requirements have been satisfied. For example:
- identifying every state that maintains a directory or similar product approval regime;
- confirming that every appliable SKU is properly listed before distribution;
- tracking annual certification and renewal requirements;
- monitoring changes to directory status;
- understanding where distributors and wholesalers are sending products;
- holding DTC sales until directory obligations are fulfilled, even without the products on retail shelves;
- maintaining documentation demonstrating where and when products were sold; and
- establishing procedures for immediately addressing products that are removed from a state directory.
The Loon matter also demonstrates why distribution controls and state directory compliance cannot be viewed in isolation. Even if a manufacturer has strong records showing where it sold its products, like Loon they may find themselves on the other end of a state’s position that those records alone do not resolve their obligations if their products are nonetheless discovered.
The Cost of Getting it Wrong
Wisconsin’s $1,000-per-day, per-product forfeiture creates the potential for significant exposure very quickly. The Loon assessment is therefore a useful and quantifiable warning: the cost of taking steps to delay introduction into a state before directory listing can be exponentially less than the cost of ongoing penalties.
State directory status should be treated as a core market access issue independent of federal compliance posture, with controls designed not only to get products listed, but to ensure that products do not reach a state – through any channels – before they are legally eligible for sale there.
Vedder’s nicotine practice tracks federal and state regulatory requirements for modern oral nicotine products and continually monitors evolving legislation. We stand ready to assist stakeholders in understanding and complying with all applicable regulations.
[1] Wis. Stat. § 995.15 (2025). https://docs.legis.wisconsin.gov/statutes/statutes/995/15
[4] Maduro Distributors, Inc. v. Casey, No. 3:26-cv-00727 (W.D. Wis. filed Aug. 7, 2026). https://www.law360.com/articles/2512074/attachments/0
