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West Virginia Governor Wants 1000% Vapor Tax Increase
West Virginia Governor Jim Justice committed to phasing out the states income tax in his 2021 State of the State Address. His proposal, submitted days ago to the state legislature for review, includes a hike in the states e-cigarette tax from 7.5 cents per millimeter of e-liquid to 75 cents per milliliter.
Credit: Pasja1000 Under the proposal, a 100 milliliter bottle would carry a tax of $75, a 1000 percent increase. The bill also increases the tax on combustible cigarettes by 80 cents per pack, bringing the total to $2 per 20 cigarettes.
At 75 cents per ml, a standard 30ml bottle of e-liquid would carry a $22.50 tax, which is 12.5 percent higher than the proposed tax burden on a full carton of cigarettes (200 cigarettes) if taxed at $2 per pack.
In a story for Filtermag.com, many West Virginia vapers, vape shop owners, and tobacco harm reduction advocates—is that many will return to smoking or resort to a dangerous black market to save money.
“We won’t be able to stay in business,” said Cheryl Lockhart, the owner of Hazy Hollow Vapors in South Charleston, West Virginia. “Nobody is going to pay for that.” The tax on the bottle would be more than the cost of the bottle itself, and most of what Lockhart sells—she ballparked up to 90 percent—are 100 milliliter bottles of e-juice. “I don’t see any path around it,” she told Filter. “It’s just one more thing.”
Another concern is that West Virginia vapers may turn to neighboring states such as Kentucky and Ohio to make e-liquid purchases and denying the state any tax dollars from vapor products. This is what happened when Massachusetts increased its vapor tax.
“No other state has a one-size-fits all volume tax higher than 10 cents per milliliter, yet Governor Justice and his team concluded that 75 cents per milliliter is rational,” said Gregory Conley, the president of the American Vaping Association. “While they may see this tax hike as a ‘small’ part of their overall plan, this is going to anger a whole lot of voters and cause them to believe their elected officials would prefer they keep smoking cigarettes.”
Cerulean Launches Aerosol Measurement System
Cerulean has launched a new stand-alone Aerosol Temperature Measurement System (ATMS), the company announced on its website.
The ATMS is designed for research and quality assurance applications to measure the temperature of aerosol generated from e-cigarettes and heated-tobacco products.
The ATMS monitors and records aerosol temperature on a puff-by-puff basis in real time and is available in multiholder configurations of one, four, five, eight, 10 and 20 channels.
Comprising a supplied portable computer with an intuitive user interface and ISO-compliant Cambridge Filter Holders, the ATMS can be fitted to any vaping machine and will record and display in real time the aerosol temperate during the experiment.
County in Wales, UK Wants Public Vape Ban
Lawmakers in Ceredigion county, Wales want vaping and e-cigarettes to be treated the same as combustible cigarettes and be banned in public areas like schools, playgrounds and hospital grounds, according to reports.
Credit: Krystian Graba New legislation came into force from March 1 banning smoking from school grounds, hospitals and play areas, with Welsh Government leaving the decision on vaping up to local authorities, according to Nation CYMRU. Ceredigion county councilors recommended that the same new rules banning smoking be the same for those using alternatives such as vapes and e-cigarettes but added that the same level of enforcement would not be possible.
Chairman of the healthier communities overview and scrutiny committee said on Monday, March 8 that seeing people vaping in playgrounds, combined with the different flavors available, could be “drawing children in.” He added he was a “little disappointed” the current legislation did not go further in allowing enforcement of vaping restrictions.
Cllr Bryan Davies supported this and said that vaping should be treated the same as smoking. Questions were raised about how the legislation covered council land leased by community councils and how enforcement would be resourced.
The council will be the enforcement body for premises while the police will enforce the ban on smoking in cars with children. The committee approved the report, adding that consideration be given to including vaping on any signage indicating where smoking is banned.
It is recommended that “steps are taken to ensure all Local Authority smoke-free settings comply with the new legal requirements.” It also noted the additional enforcement requirements on public protection services and “further recommends necessary changes to the Constitution to reflect the implementation of the Smoke-free Premises and Vehicles (Wales) Regulations 2020.”
Now Open: Securience Merging With VapinDirect
In an effort to secure its commercial customers, Securience, LLC is merging with VapinDirect, an online vaping wholesaler. The parent to the DuraSmoke, Forge, AmericaneLiquidStore, and VapeMoar brands will officially become a part of VapinDirect beginning March 31, 2021, according to an email to its customers.
Credit: VapinDirect Last month, Securience announced it would be shuttering its business. In a letter to its partners, the company stated that the recent amendment of the Prevent All Cigarette Trafficking (PACT) Act to include vaping products, which prohibits the shipping of vapor products through the U.S. Postal Service (USPS), was the catalyst for the decision to close the company’s doors.
“A top priority of ours has always been to ensure guidelines and legal rules are held to the utmost standards. PACT Act raises these standards, and we want to ensure all our customers that they will be maintained,” the email stated. “This merger will allow us to continue to distribute products business to business
Based in Green Bay, Wisconssin, VapinDirect will add Securience’s manufacturing capabilities in Wauwatosa. VapinDirect will also be adding another 14,0000 products to Securience’s existing catalog.
“VapinDirect is larger and thus more financially stable, having about [five times] our employment level, and thus better able to manage growth and change in the industry,” the email states. “Our existing employees will be added to their team and will continue to use the same ISO-certified processes and equipment in the same Wauwatosa location.”
The email states that the company will be contacting its wholesale customers over the coming weeks to introduce VapinDirect. The company will also be clarifying its procedures regarding shipping. “There are many other challenges within the industry concerning PACT and this merger is one of the many ways we will continue to find a way,” the email states.
2 Cases Ask SCOTUS to Take Away FDA’s Vapor Rules
The litigants in two lawsuits challenging the constitutionality of the the U.S. Food and Drug Administration’s (FDA) Deeming Rule for vapor products have asked the Supreme Court of the United States (SCOTUS) to take up the cases.
The cases are Big Time Vapes, Inc., et al. v. FDA, and Moose Jooce, et al. v. FDA.
Attorneys for the plaintiffs in the Moose Jooce case filed a petition for writ of certiorari, a request to have the U.S. Supreme Court consider the case. On February 26, 2021, the Moose Jooce challengers filed their petition asking the Supreme Court to take up questions related to their challenge to the Deeming Rule under the “Appointments Clause” in Article II, § 2 of the Constitution.
The plaintiffs claim that FDA acted improperly because the person that issued the deeming regulations was not qualified to do so per the Appointments Clause. In this case, the rule was issued by Leslie Kux, the associate commissioner for policy, and not the commissioner himself, according to an attorney for Troutman Pepper.
FDA has argued that the commissioner—in both 2016 and 2019—ratified the regulations. Both the U.S. District Court for the District of Columbia and the U.S. Court of Appeals for the District of Columbia have ruled against plaintiffs in the Moose Jooce case. The district court and court of appeals held that these circumstances did not render the Deeming Rule invalid. The plaintiffs are represented by the Pacific Legal Foundation.
In the Big Time Vapes case, the challengers petitioned the Supreme Court for a writ of certiorari on December 18, 2020. The case involves the claim that the statute purportedly authorizing the Deeming Rule is an unconstitutional delegation of Congress’ legislative power.
The challengers in the Big Time suit initiated their case in the U.S. District Court for the Southern District of Mississippi. The court granted the FDA’s motion to dismiss and denied the challengers’ motion for preliminary injunction and the Fifth Circuit affirmed the decision.
There is no guarantee that the Supreme Court will take up these cases. According to the Administrative Office of the U.S. Courts, the court accepts 100-150 of the more than 7,000 requests it receives each year.
The FDA will have the opportunity to respond to the challengers’ petitions before the Supreme Court acts on them. Review “is not a matter of right, but of judicial discretion,” and the petitions “will be granted only for compelling reasons.”
Currently, vapor businesses are still subject to the Deeming Rule.
U.S. Vapor Mail Ban Reverberates Internationally
Photo courtesy of UKVIA The impact of the pending U.S. restrictions on shipping vapor products is being felt internationally. The U.K. Vaping Industry Association (UKVIA), for example, has expressed “deep concern” about the measures, saying that U.K. business are affected.
In late December, Congress voted into law a $2.3 trillion coronavirus relief and government funding bill that contains a provision banning the U.S. Postal Service (USPS) from delivering vapor products.
The USPS was already prohibited from delivering cigarettes and smokeless tobacco products to consumers under the PACT Act. The law passed in December extends the act’s original definition of “cigarette” to include electronic nicotine-delivery systems.
Tobacco and vapor companies may use private services to ship their products to consumers, but the PACT Act requires them to register with the Bureau of Alcohol, Tobacco, Firearms and Explosives and the tobacco tax administrators of the states into which a shipment is made. Delivery sellers are further required to verify the age and identity of the customer at purchase and maintain records of delivery sales for a period of four years after the date of sale, creating substantial administrative burdens.
Critically for the vapor industry, the most popular carriers, Federal Express and United Parcel Service, have recently announced that they would cease all deliveries of vapor products.
“We have had orders not being collected, and our own shops not receiving stock in a reliable manner, all of which impacts customers,” said Joe Bevan, director of UKVIA member Celtic Vapours. “As the majority of our business is currently online, we need efficient delivery of stock to provide the quickest service.”
“At a time when many vapers are unfortunately unable to visit their local vape store, this is making it even more difficult for them to receive the consumable products they rely upon,” said Richard Russell, operations manager Vape Distribution. “Certain carriers perhaps don’t realize that this action could lead vapers to revert back to smoking.”
“The vaping supply chain is a global one, bringing together resources and expertise from around the world,” said John Dunne, director general at UKVIA. “It is bitterly disappointing to see these American restrictions having a negative impact in the U.K., but the nature of the supply chain makes it inevitable. In the EU too we are hearing of vaping businesses being turned away from major carriers.
“The potential impact on public health is grave, as so many people are relying on shipped goods as a lifeline during the pandemic. Without proper access to harm-reduction products we know people can revert to smoking cigarettes, today in the U.S. but perhaps tomorrow in the U.K. With businesses already struggling through lockdown, and our health services under great strain, supply chain issues really are the last thing we need.
“I call on the distribution industry, many of whom have been partners of the vaping industry for many years, to do all they can to support their U.K. customers, and to avoid the blanket implementation of U.S. restrictions worldwide.
“Furthermore, I call on the U.K. government, to ensure that carriers in this country are free to continue to deliver vaping products to retailers and direct to consumers, and to resist any urge to follow the U.S. down this regressive route.”
VPR Files 3 More Suits for Auto-Draw IP Infringement
VPR Brands has filed lawsuits against three more vapor companies for violating its “auto draw” patent. The company filed a lawsuit against three previous companies in February. The company owns intellectual property rights for one of the original patents filed for electronic cigarette technology.
Credit: VPR The patent dates back to 2009 and includes independent claims covering vaping products containing an electric airflow sensor, including a sensor comprised of a diaphragm microphone. The sensor turns the battery on and off, and covers auto-draw, button less e-cigarettes, cigalikes, pod devices and vaporizers using an airflow sensor.
“Just this week we have filed three additional lawsuits which brings the total to six with many more expected and likely as almost every company in the vape space has at least one product which uses the Patented “auto draw” technology.” said Kevin Frija, CEO of VPR Brands. “We will be aggressively pursuing every company infringing on our patent no matter how small or how large they maybe.”
VPR Brands along with SRIPLAW has started to identify and notify over 50 of the leading companies. These companies were prioritized, based on sales volume and popularity. Most recently VPR Brands LP and its legal team, headed by Joel B Rothman of SRIPLAW, have filed litigation against Mong LLC, B&G Trading LLC, and Lightfire Holding LLC. The three previous suits were filed against Jupiter Research, Cool Clouds Distribution and XL Vape.
“We want to make sure VPR Brands Patent which is valid until 2030 is enforced and our Intellectual property rights are protected,” said Frija. “We intend to send a clear message to the industry that we mean business and of course, as they say, “business is business” it’s nothing personal, in the end its just business.”
P.E.I. Lawmaker: Flavor Ban Could Boost Cigarette Sales
A Green MLA on Canada’s Prince Edward Island (P.E.I.) who voted in favor of a private member’s bill to restrict the sale of flavored vaping products now says he believes vaping could be an important tool to get Islanders to quit smoking.
During question period on March 4, Green MLA Steve Howard said there is evidence that vaping could be considered a form of “harm reduction” for Islanders attempting to give up smoking. Smoking is often described by health officials as one of the leading causes of preventable deaths on P.E.I., according to a story in the Journal Pioneer.
Steve Howard / Credit: cbc.ca Howard suggested that a bill that came into effect at the beginning of March, which banned flavored vaping products, would encourage youth to seek out flavored products on the black market.
The bill, introduced by Progressive Conservative backbencher Cory Deagle in 2019, also increased the legal age for tobacco and vaping products from 19 to 21 and limited the sale of vaping products to tobacco shops. The bill did not restrict the sale of tobacco products to tobacco shops. It passed unanimously in fall 2019.
“Many of the severe vaping illnesses we saw last year and in 2019 were linked to black market products. These black market products most often appear and become commercially viable when governments introduced wide-ranging restrictions on legal products,” Howard said.
“Are you concerned your regulatory approach will increase the availability and use of dangerous black market products?” Howard asked Minister of Finance Darlene Compton.
The question drew a rebuke from Compton. “I would suggest the Opposition pick a lane – pick any lane – and they’re all paved,” Compton said. “You do not want regulated gambling but you’re happy with regulated cannabis and you’re happy with regulated liquor. And now, you want regulated vaping or you want people to use unregulated vaping. I mean, pick a lane.”
In an interview, Howard said he had initially voted for the 2019 bill because he agreed it was important to ban flavored vaping products that are marketed to youth, such as cotton candy. But Howard said the regulations put in place ended up banning all flavored products, except those that resembled tobacco products.
He said this effectively nullified any possibility Islanders could transition to vaping as a means of quitting smoking. “Of course, the best option is to not use vaping or smoking,” Howard said. “But as far as a harm reduction tool goes, vaping is a powerful tool that we should not be discouraging people from using. And the flavors are a key component to uptake.”
Howard pointed to a posting on the Health Canada website that suggested there is evidence vaping could help with smoking cessation. He said the regulations should be changed to target vaping flavors targeted to youth. But he also suggested schools have a role to play.
“We don’t have anything in our curriculum in the education system right now to do with vaping. We have tobacco use, we have opiates, we have cannabis, we have alcohol. But we don’t have any education in there on vaping itself,” Howard said.
TSFA Leader Says PACT Act Impacts Older Vapers More
When former President Donald Trump signed the amended Prevent All Cigarette Trafficking Act, or PACT Act, into law late last year, the goal was to stop teenagers from buying nicotine vape products online.
However, the Tennessee Smoke Free Association’s (TSFA) executive director Dimitris Agrafiotis cited the “Youth source of acquisition for E-Cigarettes” survey from 2019 that shows most teenagers don’t get their e-cigarette products online. Instead, the survey, published in Science Direct, found that most kids get them from friends.
Dimitris Agrafiotis Credit: TSFA A quarter of youth surveyed reported living with someone who uses e-cigarettes (26.1 percent). The most common location or source for getting e-cigarettes was a friend (51.5 percent), followed by a family member (16.4 percent), a vape shop (16.2 percent), and a retail location (12.3 percent).
Few of the survey participants reported getting e-cigarettes from another person that was not a family member or a friend (6.1 percent), the Internet (3.8 percent), or another place not listed (3.5 percent). The majority of adolescents reported getting e-cigarettes from one place (92 percent, data not shown), according to the survey data.
Agrafiotis says this law will do more harm to the older generation who rely on vape products to quit smoking cigarettes.
“The main point that I wanted to get across in this story is that in every corner of America you can buy cigarettes and a much less harmful product … [than] smoking is being squashed and eliminated,” Agrafiotis said.
If anyone wants to try to make a change, there are two things you can do, says Agrafiotis. First, call your representatives in Congress. Second, submit a comment to the U.S. Postal Service. Interested parties have until March 22nd to comment.
The PACT Act requires the Postal Service to begin enforcement starting on April 26, 2021.
