Testimony submitted to the Maine Committee on Appropriations and Financial Affairs, May 19th, 2021.
Members of the committee, thank you for allowing me the opportunity to submit testimony on LD 221.
My name is Guy Bentley, and I’m the director of consumer freedom at the Reason Foundation, a 501(c)3 nonprofit think tank. The consumer freedom project analyzes and promotes policy solutions that improve public health while avoiding unintended consequences and protecting consumer choice.
I would like to draw your attention to the monies included in the budget to offset the negative fiscal impact of a prohibition of all flavored tobacco products. Flavored tobacco bans can cause significant losses in state revenue and frequently fail to achieve their public health goals.
Case Studies: Massachusetts and Canadian Provinces
Massachusetts’s ban on flavored tobacco products went into effect in June last year.
From June through November of 2020, Massachusetts’ cigarette excise tax stamp sales fell 24 percent. Unfortunately, sales in Rhode Island and New Hampshire rose 18 and 29.7 percent, respectively, compared to the same period in 2019. Massachusetts lost $62 million in cigarette excise tax revenue while Rhode Island and New Hampshire gained $14 and $28.5 million, respectively. These figures underestimate total revenue losses because they do not account for lost sales of flavored e-cigarettes, smokeless tobacco, or cigars. Total cigarette sales increased in New Hampshire by 46 percent, and menthol sales rose by 90 percent. Total cigarette sales in Rhode Island rose 20 percent, and menthol cigarette sales climbed by 29 percent. The evidence is clear that Massachusetts residents are crossing the state line to obtain tobacco products.
According to the Tax Foundation, this prohibition could cost Massachusetts a total of $120 million in the 2020—2021 fiscal year. Combining the 15 percent increase in sales of non-flavored cigarette sales in Massachusetts with the rising cigarette sales in Rhode Island and New Hampshire, cigarette sales are up overall since the prohibition went into effect.
Furthermore, a study published by the National Bureau of Economic Research on menthol prohibition in Canadian provinces, found the ban significantly increased non-menthol cigarette smoking among youths, resulting in no overall net change in youth smoking rates. As for adult smokers, the study discovered provincial menthol bans shifted smokers’ cigarette purchases away from grocery stores and gas stations to First Nations reserves (where the menthol bans do not bind).
These results are not only important because they demonstrate an immediate economic impact for jurisdictions that introduce prohibition, but thanks to cross-border trade and substitution to non-menthol cigarettes, any health benefits are severely limited. In other words, the loss in tax revenue will not be accounted for by lower healthcare costs.
Public Health and Criminal Justice
Advocates for the prohibition of menthol cigarettes correctly observe a disproportionate number of Black smokers choose a menthol product, with around 85 percent using menthol. It’s hoped the ban will dramatically reduce the Black smoking rate.
From a public health standpoint, it’s hard to ascertain why non-menthol cigarettes, which are equally dangerous, will not be subjected to prohibition, and menthol products will be. Because menthol cigarettes are overwhelmingly the choice of Black smokers, prohibition will necessarily lead to a concentration of the illicit tobacco market in the Black community.
When Congress debated the merits of a tobacco flavor ban last year, the American Civil Liberties Union and other civil rights groups warned prohibition could disproportionately impact people of color, trigger criminal penalties, and prioritize criminalization over public health and harm reduction. The National Organization of Black Law Enforcement Executives (NOBLE), Grand Council of Guardians (GCGNY), National Association of Black Law Enforcement Officers (NABLEO), and Law Enforcement Action Partnership (LEAP) have argued that prohibitions of all kinds disproportionately affect communities of color and that in the case of menthol cigarettes it’s truer than most.
E-cigarettes and Tobacco Harm Reduction
The FDA is currently reviewing e-cigarette product applications that contain reams of data on safety, efficacy, and potential threats to youth. If the FDA finds that any product is on net harmful to public health, it will be removed from the market. But if the product is deemed to be net beneficial, it will be authorized for sale as appropriate for the protection of public health. Banning these products prior to the FDA concluding its review would limit consumer access to products the FDA may deem as positive for public health later this year.
According to the 2020 National Youth Tobacco Survey (NYTS), youth vaping declined nationally by 30 percent in 2020. The survey was conducted before the closure of schools and the imposition of lockdowns in response to the coronavirus pandemic. Maine’s youth smoking rate is also at a historic low of 6.8 percent.
Furthermore, data released by the Centers for Disease Control and Prevention (CDC) shows flavors are not the leading reason why youth start vaping. According to the CDC, the primary reason youth initiate vaping is “curiosity,” followed by “friend or family member used them,” with “they are available in flavors, such as mint, candy, fruit, or chocolate” coming a very distant third. While e-cigarette flavors have a weak appeal to youth, the same cannot be said for adult vapers trying to quit smoking. According to a 2020 study by researchers at Yale School of Public Health, the use of e-cigarette flavors is positively associated with smoking cessation outcomes for adults but not associated with increased youth smoking.
Prohibition of flavored e-cigarettes, which are overwhelmingly the choice of adult vapers, risks fueling illicit markets, forcing the closure of Maine vape shops and driving vapers back to smoking.