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Vermont Fights Youth E-Cigarette Trends with New Laws and Taxes

Cindy Kleh
Cindy Kleh 22 Jun 2019

Purchase Age Will Rise to 21 for All Vaping Products

Consumers of vaping products and e-cigarettes may want to stock up on supplies this week. On July 1, two new Vermont laws will go into effect: H.57 will tax all e-cigarettes and vaping products 92%, and H.26 will restrict their sales over the internet.

On September 1, S.86 will raise the legal age to buy those products to 21. There will be no grandfather clause for those who are 18-20 and have been purchasing the products legally. The tax and age requirements will include all CBD cartridges and all related paraphernalia, including batteries. Medical-use products sold through dispensaries will not be taxed.

The impetus behind the passage of these three bills is an alarming increase in adolescent e-cigarette use in the past few years. According to a CDC report, use among high school students almost doubled in just one year – from 2017 to 2018 – with middle-school use rising 50%.

“I sponsored the bills in part from the concern that I heard from school administrators as a School Board member,” said Representative Martin Lalonde, Democrat from South Burlington. “(South Burlington High School Principal) Patrick Burke, in particular, explained how students were obtaining e-cigarettes via the internet or from seniors who had turned 18. Addressing those two issues was the intent of the bill.”

Vermont Youth Risk Behavior Surveys reflect national smokeless-cigarette trends, while adolescent use of drugs such as alcohol, traditional cigarettes, opioids, psychedelics, and other recreational substances have been on the decline.

It’s not hard to understand why teens are attracted to vaping. Flavors, like cherry and green apple, plus the smoothness of a smokeless puff can be potent draws. They are also cool-looking, easy to conceal, and the user doesn’t smell like smoke afterward.

But perhaps the most disturbing statistic is a poll of teens on what substances are actually in e-cartridges. Only 13.2% answered, “Nicotine,” while 66% responded, “Just flavoring.”

According to the Surgeon General’s Advisory on ENDS (Electronic Nicotine Delivery Systems), nicotine exposure during adolescence can harm the developing brain and put youth at a greater risk of addiction. Considering the fact that nearly 90 percent of adult smokers began smoking before the age of 18, and only 1% took up the habit after the age of 25, nipping this exploding problem in the bud has become a priority for schools, parents, and law makers.

According to the National Institute on Drug Abuse, adolescent e-cigarette users are 30.7% more likely to start smoking cigarettes, and boys are twice as likely as girls to start. But perhaps the most disturbing statistic is a poll of teens on what substances are actually in e-cartridges. Only 13.2% answered, “Nicotine,” while 66% responded, “Just flavoring.”

If education was so successful in decreasing youth cigarette smoking over the past two decades, wouldn’t it discourage ENDS use if teens understood what they were doing to their health? Jay Nichols, Executive Director of Vermont Principals, agrees. “Education turns things around. There are many schools in Vermont who already have some type of e-cigarette educational program in place.” Those programs are in the form of a “school-by-school approach” of assemblies, short videos, and health educators incorporating it into their curriculum.

How Juuls Have Compounded the Problem

One problem that educators, legislators, and retail shops have been able to agree on is that one brand, Juul, is causing most of the teen problems, partly because of its high nicotine content. In three years, Juul Labs has taken control of the e-cigarette market share to the tune of 72%. Fifteen to 17 year-olds are 16 times more likely to use Juul products compared to those aged 25 to 34. Teens love their sleek design that can be “stealthed” as a pen or USB port. They also prefer the “rush” of “Juuling,” though many of them don’t know that the rush is nicotine.

“Fifty mg was all they offered, with no way to downgrade the amount of nicotine. They were designed to hook people.”

When Juuls first came on the market, the Juul pods were 5% nicotine, while other e-cigarettes contained 1-2.4%. Juul’s blend of nicotine salts also increases the delivery and rate of absorption of nicotine into the bloodstream, and this could lead to nicotine addiction even faster than with combustible cigarettes.

Many stores that sell vaping and tobacco products are not thrilled with Juul products. “I personally feel that Juul caused this issue (with teen vaping),” said Mike Salvaty  V.P. of Sales and Marketing at Good Stuff stores. “Fifty mg was all they offered, with no way to downgrade the amount of nicotine. They were designed to hook people.”

“Kids starting posting Instagram photos of themselves Juuling in prohibited places, like the school bus or in class. I didn’t want to sell Juul, but my customers asked for it. I carried it one time, but then the reports came out (about teen use). I didn’t reorder it. I took it off my shelves!”

“I carry very little Juul,” said Alex Morano, owner of Valley Vapes in Essex. “It has the highest amount of nicotine of any product in my shop, and I try to educate people and steer them away from that brand. I also give them advice on switching over from Juul to another brand of e-cigarette.”

Steve Sclafani, who owns Full Tank CBD in Burlington, also blames Juul for much of the underage nicotine abuse. He witnessed a product that was originally marketed to youth and became a status symbol among high school students. Freshmen saw the cool kids in upper classes using them, and they figured out a way to get them. Getting away with something illegal was even more fun than the product itself.

“Kids starting posting Instagram photos of themselves Juuling in prohibited places, like the school bus or in class. I didn’t want to sell Juul, but my customers asked for it. I carried it one time, but then the reports came out (about teen use). I didn’t reorder it. I took it off my shelves!”

Way to Quit Smoking or Onramp to Teen Addiction?

One of the many reasons e-cigarettes have caught on so quickly is that a smoker can indulge without the visible stigma and odor of cigarette smoking while reducing the harm that combustible cigarettes cause to lungs. Tobacco smoke remains the leading cause of preventable deaths in the U.S. and the world.

Cigarette smoke contains some 7,000 chemicals compared to e-cigarettes (about 60). There is substantial evidence that using e-cigarettes is healthier than smoking cigarettes. Sixty-eight percent of adult smokers say they want to quit, and many have been able to switch to e-cigarettes. The American Heart Association has conceded that e-cigarettes have the potential to benefit adult smokers’ health if used as a complete substitute for combustible cigarettes and other smoked tobacco products.

Recent studies have shown that e-cigarettes are twice as effective in helping smokers quit as alternative nicotine-replacements methods such as patches or gum. However, whether those smokers ultimately quit nicotine altogether is not so clear.

Ben Anthony, a 23-year-old Burlington resident, said that he picked up the smoking habit in college. He decided to switch to e-cigarettes to improve his lung health and help him perform better in sports.

“It’s helped me to drastically cut down on nicotine. My father smoked from the age of 14 until he had double-bypass surgery at 62. Three weeks after the surgery, he quit cigarettes completely by switching to e-cigarettes. He now has a better enjoyment of life and is spending a whole lot less money on it. He also uses less nicotine. I never thought I’d see the day!” But he conceded that not enough testing has been done on vaping’s long-term effects.

Who Ends Up Paying the Price?

Governor Scott, who pledged not to raise taxes, threw his support behind the bills, stressing the importance of acting quickly on the issue to stop this “threat to public health.” But many small businesses that depend heavily on vaping products are crying foul, complaining that they have been targeted to shoulder this “sin tax.”

They feel that forcing “mom-and-pop brick-and-mortar” stores to raise prices will cost them business to lower prices in nearby states, especially when American businesses are bracing for trade tariffs and a slowing economy. Those stores located in the heart of college towns will feel the sting of the 21+ law even more.

“The law won’t change consumption much. The bottom line – Vermont will lose money and other states will take that profit.”

H.47 levies a 92% tax on e-cigarettes at the wholesale level, which means that the retail businesses will pay upfront and decide how much they will raise the price for their customers. H.26 prohibits anyone from “selling electronic cigarettes or tobacco paraphernalia in Vermont unless that person is a licensed wholesale dealer.” It also “prohibits shipping these items to anyone in Vermont other than a licensed wholesale dealer.” This was enacted to control online sales and reduce the black market activity of ENDS.

Mike Salvaty of Good Stuff said that bigger chains like his would be better able to absorb the 92% hike because they have many more products from which to make up the tax loss. Good Stuff also has six stores in Vermont and New York, and besides pipes, bongs, vaping paraphernalia, and tobacco products, they offer adult gag gifts, clothing, and other merchandise.

“It won’t make any difference to us,” said Salvaty. “We don’t mind the tax. There won’t be any prices changing; we will keep it affordable. Unfortunately, some of the smaller companies can’t do that.”

“I will go bankrupt before I abandon my customers who have been able to stop smoking (using e-cigarettes).”

Good Times has invested in new ID scanners and training for all employees on the new 21+ law. He added that he was concerned about the many “gray areas” of online sales and how Vermont will effectively enforce the new law.

Garcia’s on Church Street sees “mostly college-student customers,” but manager Robert Roncy doesn’t foresee a drastic impact. “We’ve been in the business for 30 years and have seen lots of different tax laws. The consumer won’t see the same rate of increase because the stores pay up front. The state will generate money, but we will make less. The law won’t change consumption much. The bottom line – Vermont will lose money and other states will take that profit.”

“It’s a lot of money that we’re talking about! These new laws stopped me in my tracks! What do I do other than invest in diversifying my products with very few resources to do that? I’ve got to adapt to survive, and they didn’t give me much time.”

Roncy wondered if the lost tax revenue from the 18-21 crowd is being compensated for with the new 92% tax. He also wondered why there is no tax increase on unhealthy food, when obesity is a proven killer.

Some smaller stores, like Valley Vapes in Essex Junction, have been voicing their concerns that the new laws will negatively impact their business. Alex Morano has written dozens of letters to legislators and even paid for a radio ad to inform Vermonters who use ENDS of the consequences of the laws.

Morano fears that the black market will increase, especially for 18-20 year-olds who are already using e-cigarettes. She feels the tax is “reactionary,” and has been hastily thrown together to “sweep the problem under the rug.” She also wonders if people who are hooked on the nicotine in e-cigarettes will switch to conventional cigarettes when cost becomes a factor.

Because her business is located in Essex, she sees fewer college kids and more adults who want to quit smoking. “I will go bankrupt before I abandon my customers who have been able to stop smoking (using e-cigarettes).”

Steve Sclafani of Full Tank CBD is frustrated about the hurried manner in which the new tax and age restrictions have been enacted. His shop is located on Church Street, where a big portion of his business depends on the 18-21 year-old crowd, and he calculates that a third of his products will be affected.

“People are still going to smoke. Why don’t they tax the manufacturers of these products?”

“It’s a lot of money that we’re talking about! These new laws stopped me in my tracks! What do I do other than invest in diversifying my products with very few resources to do that? I’ve got to adapt to survive, and they didn’t give me much time. I don’t think it was well thought out. I’ve called the tax office with questions, but they don’t seem to be too sure about details. I still haven’t received a letter from them explaining it, and we’re less than two weeks away!”

“I support the age restrictions. It was inevitable – the whole country will end up doing it,” he explained, “but I don’t think it’s going to help much. People are still going to smoke. Why don’t they tax the manufacturers of these products?”

Regardless of who pays what, the laws have been passed and will start going into effect on July 1. Only years of research on these relatively new products will answer the questions of the laws’ impact on curbing teen nicotine use, the possible health hazards of long-term use of ENDS, and their effectiveness in helping cigarette smokers quit the habit.

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