Measure Taxing E Cigarettes, Tobacco Will go to Voters

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The burgeoning electronic cigarette industry is on the defensive in California this year as the debate over the devices moves to the November ballot.

If approved by the voters, Prop 56 would levy hefty taxes on so-called vaping devices and add $2 per pack to the price of traditional tobacco burning cigarettes.

E-cigarette makers estimate the tax would raise the price of so-called cig-alikes, one of the most common vaping products, from about $10 to $15 or $20.

“It’s a blind lumping of our product into tobacco,” said Joshua Krane of the Smoke Free Alternatives Trade Association and an online retailer in Southern California. Krane argued that e-cigarettes help smokers quit, and are therefore a harm-reduction product.

“That’s our biggest fear that ultimately these cost increases will make our product less desirable to adult smokers,” Krane said.

But, anti-smoking activists won a recent legislative fight –in part by arguing that the state had an obligation to protect young people from e-cigarettes.

Last month, Gov. Jerry Brown handed a defeat to tobacco giants Altria and R J Reynolds, which also own e-cigarette companies MarkTen and Vuse respectively, along with SFATA, which represents independent E-cigarette makers and sellers when he signed a package of bills that regulate e-cigarettes like tobacco products. The legislation raises the age for purchasing both tobacco and electronic cigarettes from 18 to 21, and specifies where e-cigarettes can be used and sold.

The FDA also released its first e-cigarette regulations last month, deeming them tobacco products. The nicotine used in them is derived from tobacco. The new rules prohibit manufacturers from making health claims about their products, and require e-cigarette makers to disclose their ingredients, and place warning labels on packages.

E-cigarettes were invented in China in 2003, and appeared on the U.S. market several years later.

They come in various shapes and sizes and many look just like traditional cigarettes. But, instead of tobacco, the devices heat a nicotine-laced liquid that’s heated, vaporized and inhaled.

At Monster Vape in LA’s Echo Park neighborhood, 39-year old Ron Mencer took a hit from a device that looks like a flask and blew out a prodigious cloud of vapor that smelled like freshly baked sugar cookies.

The shop is spotless, and features an exposed brick wall, low lights, a pool table and comfy sofas and chairs. Hundreds of small bottles full of flavored liquids, called e-juices and capped with eyedroppers sit on a high shelf.

On a recent Sunday afternoon, Mencer stood at the counter browsing the shop’s catalog, which reads something like a wine list.

City of Angels juice, for example, is described as creamy vanilla custard with sweet melon and banana.

Mencer, a 15-year smoker who works in TV production, said he quit last year by starting to vape. Nothing else – including patches and gums – worked.

“That’s crazy,” he said of the initiative. “Cigarettes are proven to cause cancer. This (vaping) should be encouraged.”

Like Mencer, the e-cigarette industry casts its products as more healthful alternatives to smoking for already addicted tobacco users.

An industry spokesman noted that its market consists of the 40 million adults who currently use tobacco, not teenagers.

But the industry’s critics counter that e-cigarette use has skyrocketed among young people, tripling from 2013 to 2015, according to a 2016 study by the Centers for Disease Control and Prevention.

Robert Jackler, a physician and professor at the Stanford University School of Medicine said e-cigarette makers specifically target underage users with flavors like bubble gum and cocoa krispies and with games and cartoon characters on online platforms like Instagram, Twitter and Facebook.

Unicorns, a staple of children’s literature and television appear especially often in e-cigarette advertising, Jackler said. He said the ads often tout unicorn-themed flavors, even unicorn poop and unicorn puke, which ads say taste like ice cream and candy.

Jackler, who is also principal researcher at the medical school’s Stanford Research Into the Impact of Tobacco Advertising, has amassed a historical archive of 30,000 cigarette ads that is housed at the National Museum of American History of the Smithsonian Institution. Most of the collection is also available online.

Jenny McCarthy, Courtney Love, Jack Nicholson, Kathryn Heigl and Leonardo DiCaprio along with singers Christina Milian, and Avril Lavigne, and Miss Universe 2013, Natalie Korneitsik of Estonia are among the celebrities that appear in the archive hawking e-cigarettes online.

“These products are a gateway for youth to get addicted to nicotine,” said Lindsey Freitas of the California Lung Association.

Jackler said young vapers can get hooked on nicotine, and eventually turn to traditional cigarettes because they crave more of it than e-cigarettes can deliver. While vaping is far less dangerous than smoking tobacco, it isn’t harmless, especially for teenagers, Jackler said.

The CDC study noted that nicotine might affect brain development. Other potential hazards are still unknown, Jackler said.

“There’s nothing natural about breathing propylene glycol,” he said of the chemical used in e-cigarette juices. He added that flavorings that are heated and inhaled may pose dangers as well. Those chemicals might have ill effects that won’t show up for decades, Jackler said.

“You still have to smoke (traditional tobacco-burning cigarettes) for 20 or 30 years before you develop chronic obstructive pulmonary disorder,” he said. “So we don’t know.”

Jackler said he’d like to see e-cigarette restrictions like those on traditional cigarettes: no celebrity endorsements, no youth-oriented flavors, bans on television and radio ads, event sponsorships and use of cartoon characters.

Under the new state laws, smoking bans in bars and restaurants also apply to vaping. State officials will monitor e-cigarette sales to enforce provisions that bar sales to minors and sellers must now be licensed. Big tobacco and SFATA spent more than a million dollars lobbying against them.

They’re likely to pour much more money into the campaign against this year’s ballot measure because the economic stakes are so high.

Four years ago, big tobacco shelled out more than $45 million to defeat a similar measure, Prop 29, and outspent anti-tobacco activists five to one.

Jackler argued the tax would put a significant dent in teen-age e-cigarette use.

The e-cigarette industry would take a major economic hit if the initiative passed, Krane said.

Currently consumers pay only sales tax on vaping products.

California currently has one of the lowest cigarette taxes in the nation. New York state smokers pay roughly double the price that Californians do for a pack of cigarettes because of the Golden State’s lower tax rate, which ranks 35th in the nation.

Backers of the initiative include the American Cancer Society, the California Medical Association, California Dental Association and the Service Employees International Union.

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