Since introduced to the United States in 2007, e-cigarettes have exploded in popularity. National retail sales of these products have grown from $250 million in 2011 to $500 million in 2012, and once 2013 sales are released, it is anticipated that it will exceed the $1 billion mark.
The growing popularity, in combination with the lack of regulation, led to considerable attention amongst elected officials as to how these products should be treated.
Even though e-cigarettes imitate a tobacco cigarette in form and function, they elude all previous regulation. This is because an e-cigarette isn’t a tobacco product, these devices contain no tobacco (or just trace elements used for flavor). In addition, e-cigarettes do not release smoke.
Because of the unique nature of e-cigarettes:
- Prohibitions in current law against minors purchasing, using or possessing cigarettes do not apply to e-cigarettes.
- Enhanced taxes on cigarettes and other tobacco products do not apply, providing these products with a preferable low tax status.
- Because e-cigarettes don’t emit smoke, Ohio’s statewide public smoking law does not apply.
On April 30, 2013, State Representative Stephanie Kunze introduced legislation, HB 144, to close one of these loopholes and prohibit minors from purchasing, possessing or using e-cigarettes. The legislation was passed by the Ohio General Assembly on Feb. 19, and Gov. John Kasich signed the bill into law March 4.
This action is significant, but it leaves 2 remaining public policy questions unanswered:
- At what rate should these products be taxed?
- Should vaporizing with an e-cigarette or similar device be restricted in the manner that smoking is restricted by the statewide public smoking law?
While there’s no legislation pending at the statehouse as the popularity of e-cigarettes grow, there will be efforts made to answer the above questions.
I had the opportunity to discuss this issue on March 5th with WAKR’s Jasen Sokol. Below is the audio interview.