Los Angeles Times

Vaping faces same fate as tobacco

Propositio­n 56’s rate increase could force vape shops out of business, owners say.

- By Liam Dillon liam.dillon@latimes.com

E-cigarettes are in line for a big tax increase if Propositio­n 56 passes.

SACRAMENTO — Most of the attention on the Propositio­n 56 tobacco tax has focused on the potential $2per-pack increase in the price of cigarettes.

Less examined is a provision under which the booming e-cigarette market would be taxed in California for the first time — and the increase will be huge.

E-cigarette liquid containing nicotine could be taxed at a rate as high as 67%, according to state estimates, an amount that an ecigarette trade group believes would boost the price consumers pay for a typical 30-milliliter bottle to about $30 from around $20 today.

Proponents of Propositio­n 56 argue the new taxes on e-cigarettes befit the danger cited by state public health officials and other experts that the product encourages youth tobacco use and creates other health risks.

But e-cigarette retailers are worried that the new tax could force them out of business and contend that the high tax rate is unfair given that even supporters of Propositio­n 56 concede that ecigarette­s are probably less harmful than traditiona­l cigarettes.

“For us to be taxed as an equivalent to tobacco or cigarettes doesn’t make sense,” said Kari Hess, who owns a vape shop in Redding and is co-president of the Northern California branch of the Smoke-Free Alternativ­es Trade Assn.

The e-cigarette industry has grown exponentia­lly since the products were first introduced in the United States about a decade ago. Research has shown that more teenagers are now using e-cigarettes than traditiona­l ones. A 2014 estimate showed that 12.6% of adults nationwide had tried the product, in which a batterypow­ered device turns a liquid containing nicotine into inhalable vapor.

E-cigarette regulation­s have been slow to catch up, but they’re now coming in force. This year, the federal Food and Drug Administra­tion began formal oversight over e-cigarettes, banning sales to minors and requiring new marketing restrictio­ns and health warnings. California lawmakers approved major legislatio­n in the spring to set the minimum age to buy e-cigarettes at 21 and prohibit their use in restaurant­s, theaters, schools and public places where smoking already isn’t allowed.

What these new regulation­s haven’t done, however, is tax e-cigarettes as if they were tobacco. Propositio­n 56 would subject e-cigarettes to the same tax that smokeless tobacco and similar products currently face in California and raise that rate in line with the $2-per-pack increase on traditiona­l cigarettes.

Supporters of Propositio­n 56 said the decision to include e-cigarettes in their measure was simple: The state considers them like tobacco products so the measure does too.

“If you’ve got nicotine, you’re a tobacco product,” said Jim Knox, vice president of California government relations at the American Cancer Society.

Research isn’t definitive about the long-term effects of e-cigarettes, but many experts believe that they’re not as bad for your health as traditiona­l cigarettes. However, studies have raised concerns that e-cigarettes could serve as a gateway to other tobacco products among young people and continue to leave users at greater risk of heart attacks and other health problems than using no tobacco at all.

“While nobody knows for sure, and it’ll be years before we do, my best guess is that they’re about a third to as half as dangerous as cigarettes,” said Stanton A. Glantz, a professor of medicine at UC San Francisco and supporter of Propositio­n 56. “It’s like jumping out of the fifth story of a building instead of the 15th story.”

Supporters of e-cigarettes counter with studies showing that the products are much safer than tobacco and could even serve as a means to help people stop smoking. This year, the Royal College of Physicians in Britain said the products appear to be effective in that goal and should be promoted as a less harmful alternativ­e. Propositio­n 56 backers counter that if ecigarette­s are certified in the United States as a tobaccoces­sation device, they won’t be taxed under the measure.

Still, vape store owners see the initiative as heavyhande­d. Hess said she’s OK with a tax increase that’s in line with e-cigarettes’ health effects compared with traditiona­l cigarettes. But the increase anticipate­d under Propositio­n 56 could have irreversib­le consequenc­es for her store and the other 1,200 to 1,500 vape shops across the state, she said.

“It would essentiall­y put me out of business,” Hess said.

Debate over e-cigarettes has been mostly absent from the Propositio­n 56 campaign. Supporters, including doctor and hospital groups and insurance companies, have raised more than $27 million and are focusing on the health effects of traditiona­l cigarettes.

Tobacco companies, some of which are invested in the e-cigarette business as well, have poured in more than $66 million to fight the measure. Their advertisem­ents have attempted to poke holes in the initiative, pointing out that the industries funding the measure will benefit from a large portion of the revenue going toward California’s MediCal healthcare program for low-income residents.

The e-cigarette trade associatio­n, whose membership is largely mom-and-pop vape shops around the state, has raised only $3,600 in opposition, according to state campaign filings.

 ?? Gary Friedman Los Angeles Times ?? PROPONENTS of e-cigarettes, devices that turn liquid containing nicotine into inhalable vapor, say they’re less harmful than traditiona­l cigarettes.
Gary Friedman Los Angeles Times PROPONENTS of e-cigarettes, devices that turn liquid containing nicotine into inhalable vapor, say they’re less harmful than traditiona­l cigarettes.

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