Recreational nitrous oxide is a $400 million to $1 billion unregulated market in the United States. A 3.3-liter canister costs $15 at the factory in China and retails for $160 at an American smoke shop — a 967% markup. Under South Carolina's proposed S.751, the maximum first-offense fine for selling to a minor is $1,000, escalating to $10,000 for third or subsequent offenses. The first-offense fine is recovered in approximately 13 canister sales.
$1,000
S.751 FIRST-OFFENSE FINE — RECOVERED IN ~13 CANISTER SALES
The first-offense fine equals 0.73% of annual estimated profit per smoke shop; third-offense ($10,000) equals 7.3%
UNIT ECONOMICS
$15
CHINA FACTORY COST
$160
GALAXY GAS MSRP (3.3L)
967%
FACTORY-TO-RETAIL MARKUP
$1
GALAXY GAS TRADEMARK SALE PRICE
MARKET SCALE
$399M
CONSERVATIVE ESTIMATE
$1.09B
MODERATE ESTIMATE
13M
LIFETIME US USERS (NSDUH)
904
SC TOBACCO/SMOKE SHOPS
PENALTY COMPARISON
South Carolina (S.751, amended): $1,000 first-offense / $5,000 second / $10,000 third+. Purchase limits: 24 cartridges (8g) per day. No license required. Louisiana: $25,000 maximum fine. Florida: $5,000 maximum fine (canisters >16g). Georgia: $10,000 maximum fine (sale to minors). New York: Civil penalties, age verification, signage requirements.
At $375/day in gross profit from N₂O sales, a moderate-volume smoke shop earns the S.751 first-offense fine amount ($1,000) in under 3 days of operation. A third-offense fine ($10,000) requires approximately 27 days. The escalating structure provides increasing deterrence for repeat offenders.
FINANCIAL ANALYSIS
Complete market size estimates, unit economics breakdown, penalty-vs-profit analysis, and comparison to analogous regulated markets (e-cigarettes, CBD, kratom). Includes South Carolina and Georgia market projections.
