Cheap Cigarettes

HB 950 has been referred to the Committee on Taxation, which is comprised of members of both the Maine Senate and House. No hearing has been scheduled. If you can attend the hearing or are in Maine and would like to offer your assistance in stopping this bill, please e mail board
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This bill will cause all tobacco products to be taxed at the same rate as cigarettes n

Item 7B (as it stands on April 3rd, 2013) which defines smokeless tobacco products will almost certainly include electronic cigarettes in this legislation. n

See also this ECF thread for a discussion of the issue. n

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E-cigarettes face first regulations

How to get cheap cigarettes? – film dailymotion

“It appears that the FDA is taking a science based approach,” Lorillard Chief Executive Murray Kessler said in a statement, praising the agency for treating e cigarettes differently than regular cigarettes.

While the initial rules appear to be good news for e cigarette makers and their growing number of customers, or “vapers,” they are likely to disappoint industry critics who view e cigarettes as a gateway to nicotine addiction and new smokers.

“The FDA’s proposal does nothing to rein in the wild west marketing of e cigarettes to kids,” Stanton Glantz, head of the Center for Tobacco Control Research and Education at the University of California, San Francisco, wrote early Thursday. Any forceful FDA action appears “years away,” he added.

The FDA published its proposed rules Thursday morning in the Federal Register.

The new regulations will also cover pipe tobacco, nicotine gels, water pipe tobacco and cigars. In the case of cigars, FDA officials said they await public comment before deciding to regulate all cigars or merely those critics say are aimed at children, such as flavored products.

E cigarettes are taxed less than regular cigarettes and typically cost less.

Under its new rules, the FDA will require manufacturers to provide scientific evidence to substantiate any claims they make that e cigarettes are safer than standard ones.

The FDA plans a 75 day comment period before the regulations become final. Some provisions, such as requiring evidence of health benefits, will go into effect at that point. The agency then will allow two years for all other provisions to be effective.

One of the biggest new requirements is that e cigarette makers will need to apply to the FDA within two years to keep existing products on the market. The agency then will rule on applications roughly as it does on other tobacco products.

That gives the FDA future leverage over what can be brought to market and be allowed to stay on the market and represents a major unknown for e cigarette makers who fear a slow review process could stifle innovation. E cigarettes first surfaced in the U.S. around 2007.

“New technology is critical for this category, much more than for traditional cigarettes,” said Miguel Martin, president of Logic Technology Development LLC, one of the leading e cigarette companies.

The rules come as some studies suggest the devices help traditional smokers kick the habit. A randomized trial of 657 people in New Zealand published last year in the medical journal Lancet found e cigarettes were “modestly effective” in smoking cessation, with a 7.3% abstinence rate after six months.

“We have not seen anything like this in 100 years that could make the combustible cigarette obsolete,” said David Abrams, a professor at Johns Hopkins School of Public Health and research director at Legacy, an anti tobacco group. He believes the devices could wean people from traditional cigarettes.

Smoking remains the leading cause of preventable death, killing 480,000 Americans annually, government estimates show.

FDA Commissioner Margaret A. Hamburg said the regulations mark a “historic day for the FDA and for public health.” She said the agency was stepping in to prevent children from smoking and suffering “a lifetime of nicotine addiction.” The new rules, she said, “will make a real and enduring difference.”

FDA officials stressed the new rules are just a first step and that regulations over added flavors remain a strong possibility.

But the rules fall short of what some critics have sought.

“I am concerned about e cigarettes because manufacturers are targeting children and using promotions with celebrities, as well as using colors and flavors that are appealing to children,” said Sen. Richard Blumenthal (D., Conn.) E cigarette makers say they don’t target youth in their marketing.

The Centers for Disease Control and Prevention says the percentage of high school students who have tried an e cigarette climbed to 10% in 2012 from 4.7% in 2011, with the rate also almost doubling among middle school children.

E cigarette makers say they don’t target youth in their marketing and that they support prohibiting sales to minors, like with cigarettes. Many also support manufacturing standards, ingredient labeling and other product safeguards.

But many e cigarette companies say it would be a mistake to ban flavors because it could slow the migration of adult smokers to e cigarettes. Many also oppose blanket advertising restrictions including NJOY Inc., which plans to spend tens of millions dollars this year advertising its products on TV and elsewhere.

“We don’t think it’s in the public interest to prevent an e cigarette company from responsibly communicating to adult smokers that there’s an alternative,” said Craig Weiss, NJOY’s chief executive, adding NJOY could try to halt the FDA in court if the agency tries to ban TV ads.

Most researchers believe e cigarettes are less harmful than regular ones, which release carbon monoxide and thousands of chemicals, including known carcinogens, through combustion.

The financial stakes are huge. Tobacco companies are plunging into e cigarettes to try to offset sliding sales, rising taxes and widening bans on traditional smokes.

Altria Group Inc., MO 2.10% Altria Group Inc. U.S. NYSE $39.93 0.82 2.10% April 28, 2014 4 01 pm Volume (Delayed 15m) 13.31M AFTER HOURS $39.96 0.03 0.08% April 28, 2014 5 00 pm Volume (Delayed 15m) 255,402 P/E Ratio 18.49 Market Cap $77.69 Billion Dividend Yield 4.81% Rev. per Employee $1,966,440 04/24/14 E Cig Makers Breathe Easier Af… 04/24/14 E Cigarettes Face First Regula… 04/24/14 Lorillard Profit Declines on L… More quote details and news MO in Your Value Your Change Short position which has roughly half of the U.S. tobacco market, began testing its MarkTen e cigarette brand last year and earlier this year signed a deal to acquire e cigarette upstart Green Smoke Inc. for $110 million.

Reynolds American Inc., RAI 1.14% Reynolds American Inc. U.S. NYSE $55.73 0.63 1.14% April 28, 2014 4 01 pm Volume (Delayed 15m) 2.30M AFTER HOURS $55.73 0.00 0.00% April 28, 2014 6 28 pm Volume (Delayed 15m) 74,221 P/E Ratio 19.22 Market Cap $29.54 Billion Dividend Yield 4.81% Rev. per Employee $1,566,730 04/24/14 E Cig Makers Breathe Easier Af… 04/24/14 E Cigarettes Face First Regula… 04/24/14 Lorillard Profit Declines on L… More quote details and news RAI in Your Value Your Change Short position maker of Camel cigarettes and the No. 2 tobacco player, plans to roll out its Vuse e cigarette nationally by midyear.

Both are racing to catch up to Lorillard Inc., the maker of Newport cigarettes and the third largest U.S. tobacco company. It has a nearly 50% e cigarette market share in convenience stores after acquiring Blu in 2012 for $135 million.

They’re competing with dozens of other brands such as NJOY, Logic, Fin, Mistic and 21st Century increasingly available in stores. Hundreds of brands are available over the Internet, where more than a quarter of e cigarette sales occur, according to some estimates.

Many states and cities aren’t waiting around when it comes to regulating e cigarettes. More than two dozen states have already passed legislation to restrict e cigarette sales to minors. The three largest U.S. cities New York, Los Angeles and Chicago moved to include e cigarettes in public smoking bans since December. Minnesota already levies a special tax on e cigarettes and other states are considering a similar move.

FDA officials said the new rule generally won’t pre empt such legislation.

Write to Thomas M. Burton at and Mike Esterl at