CSP Magazine

Electronic Cigarettes: Local Limits

How towns and states are slowing the growth of e-cigarette sales

Adam and Eve were banned from the Garden of Eden for biting into an apple.

Now, The Big Apple is banning their descendants from using e-cigarettes at Madison Square Garden—or any site in New York City where traditional cigarette use is disallowed, for that matter. The Windy City has followed suit, and the City of Angels may not be far behind.

New York Mayor Michael Bloomberg’s signing of his city’s controversial e-cigarette ban into law in late December (one of his final acts before his term ended) and the Chicago City Council’s vote to approve a similar measure in mid-January is major news. But it’s merely the latest in a series of related moves being made or considered by municipalities across the country. Indeed, restrictive vaping laws appear to be picking up momentum in several markets throughout the United States, as anti-e-cig sentiment continues to ride high among various city councils, legislative bodies and offices of elected officials, despite efforts from advocates seeking to distinguish electronic cigarettes from its combustible cousin.

Consider that more than 100 cities—including Seattle; Boston; Indianapolis; Gainesville, Fla.; Mountain View, Calif.; and Duluth, Minn.—have enacted laws comparable to New York’s, effectively outlawing e-cig use in places where smoking is prohibited, such as parks, restaurants, bars, outdoor dining spaces, beaches and office buildings. Meanwhile, a bill similar to New York’s is on the table in Los Angeles for consideration in early 2014.

While many localities are taking preemptive measures against e-cigarettes, others await guidance from the U.S. Food and Drug Administration (FDA). In the coming weeks, the FDA is expected to finalize and publish its long-awaited federal rules that could ban sales of e-cigarettes to minors, prohibit flavors, cap nicotine levels and curb advertising and online sales.

Big Apple’s Big Precedent

Shortly after holding a public hearing in December, the New York City Council voted 43-8 to add e-cigs to the city’s Smoke-Free Air Act. At that public hearing, Thomas A. Farley, Commissioner of the New York City Department of Health and Mental Hygiene, said that allowing the use of e-cigarettes indoors may make it difficult to enforce the city’s Smoke-Free Air Act against conventional cigarettes, because e-cigarettes and conventional cigarettes look so much alike.

“New Yorkers have come to enjoy and greatly benefit from smoke-free restaurants and bars. We do not want to return to a day in which smoking conventional cigarettes in these places is allowed, simply because restaurant and bar staff can’t easily distinguish them from e-cigarettes,” Farley testified at the hearing. “Because of these concerns, prohibiting the use of electronic cigarettes in areas where smoking is restricted is a prudent step. While more research is needed on the health effects of electronic cigarettes, waiting to act could jeopardize the progress [New York City has] made over the last 12 years.”

While he sees New York’s move as an interesting development that other cities may follow, Nik Modi, managing director/ research analyst for RBC Capital Markets, New York, says he believes broader regulatory measures will be taken once the FDA provides initial guidance.

Thomas Briant, executive director and legal counsel for the National Association of Tobacco Outlets (NATO), Minneapolis, says the New York ban has significant repercussions.

“While some cities have begun to consider and adopt restrictions on the use of e-cigarettes in public places,” says Briant, “New York City is the largest city with a ban on the use of e-cigarettes in public places and workplaces that also prohibits the sale of e-cigarettes to anyone under the age of 21.”

Briant says the cities with the strictest e-cigarette laws are those that have applied regulations that are similar to current regulations on cigarettes and other tobacco products.

“These regulations include prohibiting the sale of e-cigarettes to underage youth, outlawing self-service displays of e-cigarettes except in adult-only tobacco stores, and requiring a license or permit to sell e-cigarettes,” he says.

Prudent or Premature?

With the flurry of legislative activity that occurred in 2013 seeking to restrict the use of e-cigarettes, an overriding question emerges: Are these territories giving due process to vaping and hearing both sides of the argument, or are many elected officials simply jumping on the “ban” wagon and rushing to judgment unfairly?

“The actions taken at local levels largely have to do with the inaction by the FDA,” says Modi. “We feel most officials are taking action to prevent any perceived downside risk. But without sound science and research, it would be unfair of us to say these officials taking action are acting prematurely or unfairly.”

Also, a key point for many local governments is to protect minors, Modi says. There are many at the FDA and anti-tobacco groups who are concerned that e-cigarettes are gaining wide-scale adoption with underage consumers. The thought is that these products are a gateway to other tobacco products, even though, according to Modi, there is insufficient information to support this concern.

“Local governments with youth interest at heart may not want to run this risk (even if the evidence is lacking), particularly without sound science or FDA regulatory guidance around the category,” says Modi.

Chicago Department of Public Health Commissioner Bechara Choucair says his city’s approved ordinance to restrict the use of e-cigs in public places and workplaces was triggered by community feedback.

“The ordinance followed a series of town hall meetings [last fall] hosted by the Chicago Board of Health where we heard directly from parents and community members on new ways to help reduce youth smoking,” says Choucair, who points out that Mayor Rahm Emanuel actually proposed the ordinance before New York’s was introduced. “Access to e-cigarettes and the potential dangers posed by them was brought up during these meetings, leading to the proposal.

“As more research is conducted, we  should err on the side of safety and regulate e-cigarettes in the same way as traditional cigarettes, ensuring that Chicago’s air stays clean and safe for all people. I think as more studies are conducted, more cities will be interested in regulations to better protect our youth and others.”

Briant, however, believes restrictions and their consideration on the use of e-cigarettes in public places and workplaces by local and state lawmakers is premature.

“The FDA is committed to taking a comprehensive, science-based approach to adopting regulations on e-cigarettes, and cities and states should not base their actions on conjecture or speculation,” Briant says. “Sound public policy should be based on scientific data and factual information, not on unsubstantiated claims.”

For this reason, Briant says city and state elected officials should postpone any action on restricting e-cigarette use until the FDA adopts scientific-based regulations and a sufficient baseline of scientific research and factual evidence on e-cigarettes becomes available.

Jason Healy, founder and president of Charlotte, N.C.-based blu eCigs, the current market sales leader, says cities and states may certainly legislate the best way they see fit, “but we hope these decisions are made with the best interests of all their constituents, based on research and fact vs. conjecture. With any innovative product, judgment is often quick and founded on personal bias or preconceived notions.”

The Public vs. Politicians

National polling data on e-cigarettes reveals a mixed bag. A recent survey by Reason-Rupe shows that 62% of Americans think the government should allow people to use e-cigarettes in public places, while 34% favor public e-smoking bans.

That pro-electronic-cigarette sentiment is clouded by another figure. Per a new University of Michigan nationwide poll, more than four in 10 adults say they are worried that e-cigarettes will encourage children to use tobacco products, 86% believe minors should be banned from buying e-cigs, and 71% back the restriction of e-cigarette marketing on social networking sites. Also, results of a poll published last summer by the Mellman Group for the Campaign for Tobacco-Free Kids (an unabashedly partisan anti-tobacco group) indicate that 54% of respondents think the FDA should extend its authority to regulate all tobacco products, including e-cigarettes, vs. 34% who disagree.

“I’m not seeing any evidence that [strict e-cigarette legislation] is a result of grass-roots pressure from local citizens,” says Jeffrey Weiss, general counsel for NJOY Inc., Scottsdale, Ariz. “It seems to be happening for one of two reasons: either political activists who are opposed to electronic cigarettes are pushing for [restrictions], or legislators are fearful of what the products represent and basically are reflexively treating them like tobacco products.

“Advocacy groups are trying to persuade legislators or the legislators are taking initiatives on their own. In either case, it’s a rush to judgment.”

However, harsh vaping restrictions aren’t rubber-stamped in every jurisdiction that takes a vote on the issue. For example, Tahlequah, Okla., and Laguna Beach, Calif., last year tabled related proposals.

“In some municipalities, we’ve seen legislation railroaded through, often with virtually no notice,” Weiss says. “But in other places, like Oklahoma, we’ve seen a pullback and an openness to treating the issues in a more data-driven way, where they’ve stepped back from making a bad decision.”

The Proof in the Prohibition

The jury is still out on the long-term effects of e-cigarette use, although strong evidence indicates that the products are likely less harmful than combustible tobacco products.

A study published recently in The Lancet suggested that e-cigs are as efficacious as nicotine patches when it comes to helping smokers kick the habit. And the particulate matter of the vapor of exhaled e-cigarettes was found to be notably lower than tobacco smoke, plausibly decreasing or eliminating secondhand inhalation, according to a 2012 study from the University of Perugia in Italy.

But while more scientific studies are needed to evaluate the long-term health effects of e-cigarette use, opponents continue to point to potentially harmful ingredients. Use of nicotine, which is found in the products, can be addicting and result in increased heart rate and blood pressure along with diarrhea, sweating and nausea, according to the National Institutes of Health. An FDA analysis revealed that some brands contain carcinogens; chemicals such as diethylene glycol, found in antifreeze; and harmful metals that may be present in the vapors.

“Studies show that e-cigarettes contain carcinogens and toxins,” says Choucair. “Even though those levels are not as high as what you find in traditional cigarettes, there is increasing evidence showing the dangers of both [e-cigarette use] and the resulting vapor.”

As for the argument that e-cigs can serve as effective smoking-cessation aids, Choucair says manufacturers have consistently refused to identify their e-cigarette products as cessation devices at the federal level “because then they would be regulated by the FDA.”

“Instead, e-cigarettes enjoy an enormous loophole: They are neither regulated federally as tobacco products nor as cessation devices,” he says. “Our goal (with Chicago’s new regulation banning e-cigarettes wherever smoking is prohibited) is to fill that gap.”

Miguel Martin, president of Logic Technology, Pompano Beach, Fla., says if there’s a concern about e-cigarettes’ effect on adult consumers, then scientific studies need to be accelerated.

“The most important thing for legislators and city council members to do is reach out to the Centers for Disease Control and Prevention, National Institutes of Health and other proven experts, and let science dictate the rules,” Martin says. “If the regulations are science-based, responsible companies such as Logic will be active partners in this critical process.”

Martin believes it’s hasty to classify e-cigarettes in an identical way to traditional cigarettes and for municipalities to create and legislate regulations prior to receiving the FDA’s anticipated rulings. “If there’s going to be this patchwork of regulations without a federal science-based charter, that’s really a problem for everyone, from business owners to adult consumers,” he says.

Forecasting Vapor Trails

Expect much of the country to eventually restrict the sale of e-cigs to minors and, in some cases, anyone younger than 21, says Modi. And even that may be irrelevant if, as expected, the FDA imposes a federal ban on sales of electronic cigarettes to minors—a restriction that many of the leading e-cig makers have voluntarily adopted.

“This is a no-brainer for both the government and the e-cigarette companies, which have indicated they support such action,” says Modi. “The cadence of action by both state and local communities alike will ultimately depend on the FDA’s guidance and initial e-cigarette regulation.

“Once the FDA has set its own federal regulations and justifications for such regulations based on science, that will set a precedent for state and local communities to propose and sign into law additional regulations, if necessary.”

In the interim, Modi and others anticipate broad, sweeping measures—such as banning e-cigs where smoking is prohibited—to be left primarily to local communities, while states will continue to impose less onerous regulations such as banning underage selling.

“We ultimately feel cities and states have been acting because the FDA has not,” Modi says.

Conversely, Weiss doesn’t believe it’s a foregone conclusion that laws banning e-cig usage will be passed in most cities and states.

“Time is on the side of e-cigarettes because science is on its side,” he says. “As more time passes, good science will emerge showing that the fears being expressed were based on a lack of scientific evidence.”

As one of the frontmen for NJOY, whose mantra is to “obsolete cigarettes,” it’s not surprising to hear Weiss’s prognostication for e-cigs. “We’ll see more smokers convert to electronic cigarettes,” he says. “We’ll see a gathering momentum against these kinds of early efforts that have, in large part, been fear- and emotional- driven rather than science-driven. And I don’t think we’ll see a groundswell of legislation at the state level regarding usage bans.”

Toward that end, NATO continues to be the leading watchdog among trade associations in monitoring local initiatives across the country aimed at restricting the sale and marketing of electronic cigarettes.

And don’t expect the groundswell of municipal measures to abate any time soon, says Briant: “This number of proposals will surely increase as 2014 unfolds.”


Taking a Macro View

While it is difficult to predict if, when or to what degree many municipalities will restrict e-cigarettes, the picture is clearer at the state level. As of January 2014, 28 states have enacted laws that prohibit the sale of e-cigarettes to minors. Arkansas, New Jersey, North Dakota and Utah have included e-cigarettes in indoor smoking bans, and California (which prohibits online advertising of e-cigarettes), Connecticut, Massachusetts and New York are weighing adoption of the same ban. (For a current snapshot of the legal status of e-cigarettes across all states, visit tinyurl.com/c9lacvw.)

Nine states—including Colorado, New York and Tennessee—have bundled e-cigarettes into the tobacco product category, while seven other states have passed measures defining e-cigarettes as something other than tobacco products. In some state, e-cigs are labeled as “alternative nicotine products”; in others, they’re defined as “vapor products.”

In Oklahoma, a bill recently filed before the 2014 legislative session officially begins would prohibit the use of e-cigarettes in all restaurants. In Wisconsin, meanwhile, a bill recently filed by a state senator would exempt e-cigarettes from the state’s smoking-restriction law and specifically allow the devices to be used in restaurants, bars and other public places.

“It would seem that the Pacific Northwest, New England north of Massachusetts and the Midwest, excluding Minnesota and Oklahoma, appear to have the least activity on a state level in terms of proposing onerous e-cig regulations,” says Nik Modi, managing director/research analyst for RBS Capital Markets, New York.

States also have the power to slow e-cigarette sales momentum by levying steep taxes on the products. For now, the only state that does so is Minnesota, which imposes a tobacco products tax on e-cigarettes at the rate of 95% of the wholesale cost.

Five other states have or are mulling e-cig taxes:

 ▶ Hawaii, which aims to apply the state’s cigarette tax to e-cigarettes.

 ▶ Massachusetts, which is contemplating a tax at 90% of the wholesale cost.

 ▶ Oklahoma and South Carolina, both of which considered legislation to tax e-cigarettes as a vapor product at a rate of 5 cents per nicotine cartridge.

 ▶ Utah, which introduced a bill that would levy an 86% tax on the wholesale cost.

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