Tobacco Business

[ 20 ] TOBACCO BUSINESS [ MARCH / APRIL | 21 ] L STARTUP / LEGISLATION Local Flavor Ban Ordinances In February 2020, the U.S. Food and Drug Administration (FDA) made most flavored cartridge and pod-type vapor products illegal. Then, in September 2020, it became illegal to sell other vapor and tobacco products for which a required premarket tobacco product application (PMTA) was not filed with the FDA. Local governments continue to propose flavor bans, claiming a need to address underage youth vaping, yet at the same time they are extending the bans to include a prohibition on the sale of traditional tobacco products (e.g., menthol cigarettes, flavored cigars, pipe tobacco, smokeless tobacco) and newer tobacco products, including some that the FDA has determined are “modified risk,” which would be beneficial to tobacco consumers and the health of the entire population. In 2020, the National Association of Tobacco Outlets (NATO) monitored or opposed over 160 such local flavor ban ordinances, most in California and Massachusetts, and both of those states have also passed statewide flavored tobacco bans. Minnesota and Colorado also had multiple local ban proposals. Opposition by local retailers has suc- cessfully modified, delayed or stopped many proposed bans, notably in Kansas City, Missouri; Missoula, Montana; and Phoenix, Arizona. In addition, six lawsuits were filed in 2020 against local flavor ordi- nances, two against Philadelphia and others against Palo Alto, Califor- nia; Edina, Minnesota; as well as California’s Los Angeles County and San Diego County. In Los Angeles County, the court upheld the ban, but a Philadelphia court preliminarily issued an injunction against that city’s ban. California Flavored Tobacco Ban Law California enacted Senate Bill 793, banning the sale of all flavored tobacco products, including vapor products, except shisha, premium cigars and loose-leaf tobacco, which was to be effective Jan. 1, 2021. The California Coalition for Fairness was formed to collect voter signatures on a referendum petition to have the state’s voters decide whether the law goes into effect or is repealed. The coalition needed 623,212 valid voter signatures by Nov. 30, 2020. On Nov. 24, 2020, the coalition submitted 1,023,529 signatures, and on Dec. 7, 2020, the California Secretary of State issued a notice that county election officials must verify the signatures, a process that would extend beyond Jan. 1, 2021. A lawsuit was then filed to suspend the law pending signa- ture verification; on Dec. 10, 2020, the court suspended the law unless it is determined that there are not enough valid signatures or the voters approve the ban in the November 2022 election. Proactive Measures Needed on 2021 Tax Increase Bills The COVID-19 pandemic has resulted in significant state revenue shortfalls and increased expenses. Since states are required to balance their budgets every year, state lawmakers will likely consider tobacco product tax increases as one option during 2021 legislative sessions. If you have not already done so, NATO urges you to communicate with the state lawmakers that represent the district(s) in which your store(s) are located and urge them to not support cigarette and tobacco tax increases. New FDA Graphic Cigarette Warnings In March 2020, the FDA ruled that 11 new text warnings with graphic color images must appear on cigarette packs, cartons and cigarette advertisements beginning on June 18, 2021. Two lawsuits were filed claiming that the warnings violated free speech, exceeded the FDA’s authority and were improperly adopted. The original implementation date of Oct. 16, 2021, for the new warings has been extended by court order to Jan. 14, 2022. Because of this postponement order, the FDA announced it strongly encourages manufacturers, wholesalers and retailers that create or pro- duce their own cigarette advertising to submit their required warning rotational plans to the FDA by March 16, 2021, extending the original Dec. 16, 2020, deadline. Both lawsuits continue, and whether the new graphic warnings will be struck down, become required in their current form, or be further delayed or amended may become known in 2021. TB Significant Tobacco Issues for With the New Year comes new challenges for retailers that sell tobacco products. Just like in 2020, key issues for retailers will encompass local, state, and federal legislative and regulatory actions. 2021 Contributed by Thomas Briant, Executive Director, National Association of Tobacco Outlets (NATO)