On June 1, 2020, Massachusetts became the first state in the US to implement a comprehensive prohibition on all flavored tobacco products, including menthol cigarettes. My study for Reason Foundation revealed that cross-state trafficking led to a net increase in cigarette sales for the Massachusetts region after considering the rise in cigarette sales in surrounding states after the ban. 

Now, the medical literature also acknowledges that the increase in cigarette sales has manifested in increases in smoking for various populations, especially those the prohibition intended to target. Indeed, the letter’s authors specifically advise, “As the FDA plans to eliminate menthol as a characterizing flavor in cigarettes, interventions should address possible increases in cigarette smoking among Black females.”

According to Asare et al., the menthol cigarette ban in Massachusetts led to an 8.1% relative decrease in smoking among adults 25 years and older, with the prevalence of current cigarette use dropping from 13.0% in 2019 to 12.0% by 2021. Part of this decrease was due to a reported 56.8% relative decrease in smoking among black men. However, with a 58.6% relative increase in smoking among black women and an equal prevalence of smoking among both genders in 2019, the menthol cigarette ban led to a net increase in smoking among black adults in Massachusetts. 

The authors’ approach involved a difference-in-differences analysis, looking at whether the changes in smoking for various populations in Massachusetts differed from other states throughout the country after the menthol cigarette ban. Referencing individual-level data from the Behavioral Risk Factor Surveillance System (BRFSS) survey, Asare et al. created state-level estimates for the prevalence of current smoking from 2017 to 2021. However, the significant percentage change estimates for the black population are suspicious. As a technical matter, the Centers for Disease Control and Prevention (CDC) instruct researchers to estimate prevalence from the BRFSS with survey weights in combination with strata and primary sampling units (PSUs). Still, the supplementary section makes no mention of strata or PSUs. Regardless, the observed net increase in smoking among black adults, instead of a significant decrease, considerably departs from what researchers expected.

These results undermine the saliency of tobacco flavor ban policies, especially menthol cigarette prohibitions. Like illicit drugs, the black market organizes to fill the void when regulated sellers can no longer legally provide products. In the case of Massachusetts, surrounding states, like New Hampshire, have a cigarette tax that is almost half of that in Massachusetts. This means that when the black market was able to organize, in many circumstances, it could buy cigarettes in New Hampshire and offer buyers in Massachusetts cigarettes at a lower price relative to the previous pre-menthol ban market, which increased access to cigarettes overall.

Much of the original motivation to pursue a menthol cigarette ban was to try to achieve “health equity,” which meant addressing disparities in health between black and white Americans. Although black adults and youth have historically smoked less than whites, the medical literature often reports that they “suffer disproportionately from tobacco-related diseases compared to non-Hispanic whites.” These observations have led influential public health institutions to advocate for menthol cigarette bans, hoping to reduce smoking in the black community further to improve health outcomes. 

But, with the flavor ban in Massachusetts leading to more cigarette sales in the region and an increase in smoking among black women, it seems clear that menthol prohibitions are ineffective mechanisms for improving public health in the black community. Instead, public health officials should promote safer alternatives to combustible cigarettes, such as e-cigarettes, which have proven effective in helping smokers quit.

The post Massachusetts menthol ban increased smoking among black women, research finds appeared first on Reason Foundation.

Public Oversight Hearing

Chairperson McDuffie and Councilmembers,

My name is Michelle Minton, and I am a senior policy analyst with the Reason Foundation, a nonpartisan public policy think tank. I am grateful for the opportunity to provide public comment on the state of the District’s sports betting market and offer a suggestion on how the Council could make the market more competitive, attractive, and profitable for the city and its residents.

When the City Council overwhelmingly voted to legalize sports betting in 2018, it did so for many good reasons. The first, was the DC’s Council’s recognition that outlawing sports betting, like other prohibitions, was ineffective at preventing illegal sports wagering within the city, counterproductive, and costly. Legalizing, regulating, and taxing the activity was intended to give residents and visitors legal and safe options for sports betting, guard against problem gambling, and generate much-needed tax revenue for the city.  

Back in 2018, the Council was told to expect around $90 million in tax revenue during the first four years of legal sports betting in the city. Nearly three years in, however, the city has collected less than $4.5 million in taxes total, most of which has come from the live betting kiosks at Capitol One Arena.

The explanation for this poor performance is not complicated: DC’s sports betting market is simply and fundamentally unattractive to bettors. This rejection of DC’s legal sports betting market can be seen clearest in the handle collected by our licensed bookies, which, since its launch almost three years ago, has amounted to a grand total of less than $130 million in wagers.  

That is less than the handle accepted by Maryland’s seven mobile sportsbooks in January 2023 alone, which accepted a combined $440 million in bets and generated nearly $2 million in tax revenue for the state.

Online and mobile gambling are increasingly critical components of the gambling industry, comprising 20 percent of total gaming revenue in 2022. But, the online sector is even more critical for any sort of gambling market in DC since the city has no casinos and limited options for in-person betting. The performance of DC’s sports betting market was always going to depend on the performance of its mobile sports betting sector. Unfortunately, in 2019 the DC Council at the time chose to authorize just one company, Intralot, to operate a single betting app, GamBetDC, for mobile sports betting throughout the city.  

The decision to bypass the normal competitive bidding process and offer a no-bid five-year monopoly contract on mobile sports betting to a single entity might have initially seemed the quickest way to roll out legal sports betting in DC and seize the critical first-mover advantage ahead of its neighboring states like Maryland, Virginia, and West Virginia. Yet, neither that first-mover advantage nor the promised deluge of tax revenue came to fruition. In fact, during its first year of operation, GamBetDC actually cost DC $4 million.

There are many reasons why bettors dislike GamBetDC, including its troubled rollout, glitchy geolocation, service outages, and general user-unfriendliness. On top of that, however, it is also more expensive, offering worse odds and payouts than virtually any other private sportsbook, legal or otherwise. If GamBetDC were truly the only game in town, it might have generated more interest. But, it never was and never will be gamblers’ only option since they can always return to the unlicensed bookies and offshore websites they bet at before sports betting was legalized.  

Today, however, DC gamblers need not skirt the law or go far for better options; they can merely travel to the Virginia border to access one of that state’s 14 mobile sportsbooks from their phones. This problem will only worsen as the legal sports betting markets continue to open throughout the region and as lawmakers in other states adjust regulations to make those markets more competitive.  Luckily, the solution to the problem is nearly as simple as the cause: The Council should end the monopoly on mobile sports betting in DC. As proposed by former Councilmember Elissa Silverman, who introduced legislation last year, the city should create pathways for private companies to apply for mobile sports betting licenses.

Opening the market to competition would make those license holders more responsive to consumer needs, spur innovation, and reduce prices. Competition would help create a legal market that might appeal to bettors in and outside of DC and finally begin to generate the economic benefits the Council was originally promised, which other states are already reaping.

Sincerely,

Michelle Minton
Senior Policy Analyst, Reason Foundation

The post Testimony: Making DC’s sports gambling market more competitive, attractive and profitable appeared first on Reason Foundation.

Chairperson Griffith and members of the committee:

My name is Michelle Minton, and I am a senior policy scholar at the Reason Foundation, a 501(c)(3) nonprofit, nonpartisan public policy research organization. As an expert in public policy, a Maryland resident, and former smoker, I am grateful for the opportunity to submit my testimony regarding the proposed prohibition of flavored tobacco products.

The aim of the proposed prohibition to reduce adult smoking and discourage youth initiation of any tobacco or nicotine product is a laudable one. However, based on science and historical evidence, we fear this proposal will not achieve its goal, but rather lead to greater health disparities and criminal justice inequities while radically increasing the size and danger of the illicit tobacco market.  

There is no question that smoking is deadly, but guilt by association is a poor foundation for government policy. Lumping everything under the definition of “tobacco” doesn’t change the scientific fact that noncombustible sources of nicotine (such as patches, gums, e-cigarettes, and snus) are vastly less harmful than the combustible cigarettes that will continue to be freely available throughout our state. Treating products that pose less than five percent of the risk of smoking the same as deadly combustible cigarettes, which kill half their users, is simply bad health policy.  

This proposal would prohibit the sale of any flavored tobacco product, including non-combustible, and, therefore, less harmful substitutes for cigarettes. This would include the flavored versions of products, like snus, on which many adults in Maryland rely to stay smoke-free and the availability of which the U.S. Food and Drug Administration (FDA) has deemed to be in the best interests of public health. If this proposal is enacted, Maryland would outlaw, under criminal penalty, the sale of safer products that exist now or will exist in the future.  

Youth

As with nearly all prohibitions, SB 259 is predicated mainly on the need to protect youth. While concern over youth experimentation with or the use of nicotine-containing products is worthy of attention, lawmakers should recognize that most youths do not use any form of tobacco at all.  Recent data from the Centers for Disease Control and Prevention (CDC) indicates that less than two percent of youth currently smoke, and just over 14 percent use e-cigarettes. 

In 2021, the Maryland Youth Risk Behavior Survey found that just 11 percent of Maryland high schoolers reported the use of electronic cigarettes, with the highest prevalence among white students (15 percent compared to 5 percent among black students), a significant decline from 2018  when 23 percent of high school students in Maryland reported any past-month e-cigarette use. 

Outlawing legal sales of flavored e-cigarettes and other products is unlikely to make more progress for several reasons. First, the research continues to indicate that youth do not initiate vaping because of flavors. CDC surveys show the main reason youth cite for vaping is “curiosity,” followed by peer influence or family members. The results are similar for Maryland, with 39 percent of youth citing “curiosity” as their reason for using electronic cigarettes, followed by 19 percent who said they used them because a friend or family member does. Flavor availability was cited by just 9 percent of Maryland youth as the reason they use them.

Second, most youths do not acquire the tobacco products they use from licensed retailers, but rather from friends, family, or illicit sources. For example, of the 23 percent of Maryland youth who indicated current e-cigarette use in 2018, nearly half said they got them by borrowing them from a friend.

Given the current size of the illicit tobacco market and the massive increase we expect to occur in the wake of a menthol cigarette ban, the current proposal may unintentionally provide youth with greater access to flavored tobacco products through illicit dealers who typically do not verify the ages of their customers. Moreover, youth who do avail themselves of the illicit market may have greater access not just to tobacco, but other substances as well. For example, when the Department of Justice arrested two brothers in Baltimore for conspiracy to traffic $6.6 million worth of contraband cigarettes, they were also found to be dealing in illicit oxycodone.

Illicit suppliers may also choose to make their own flavored tobacco products instead of buying them where they are legal and transporting them to Maryland. With regard to menthol cigarettes,  this task would be exceedingly simple, requiring nothing more than a would-be trafficker to legally purchase unflavored cigarettes and add menthol-flavoring with flavor beads, eucalyptus oil, sprays, and numerous other methods, the safety of which depend entirely on what is used as a flavoring agent. If this prohibition is enacted, Maryland lawmakers should probably be prepared for another outbreak of “vaping-related” lung injuries as we saw in the illicit market for cannabis oil vaping cartridges during the summer of 2019.

Lastly, laudable as the desire to prevent youth tobacco use may be, research suggests that banning flavored tobacco products may result in the perverse outcome of increasing youth smoking. For example, Yale University’s Abigail Friedman found that after the city of San Francisco enacted its ban on all flavored tobacco products in 2018, youth in San Francisco were twice as likely to smoke compared to adolescents in similar jurisdictions without such bans.

Illicit Sales  

Supporters of this and similar prohibition proposals argue that outlawing products for which there is significant demand, particularly among Marylanders of color, will not lead to increased illicit tobacco trafficking nor cause increased interactions with law enforcement. But the experiences of other jurisdictions which have attempted similar bans, as well as Maryland’s own experience with drug prohibition, make such assertions hard to believe.  

The harm or benefit of any prohibition largely depends on how those living under it respond.  With regard to this proposal, some current users of flavored tobacco may respond by quitting tobacco use altogether, eliminating the risks to those individuals. However, according to the Food and Drug Administration’s own analysis of its proposed national menthol cigarette ban,  around half will simply switch to equally non-menthol cigarettes, conferring zero health benefits. Moreover, the federal government estimated that roughly half of the public health benefits anticipated by outlawing combustible menthol cigarettes would come as a result of smokers switching to flavored non-combustible products, which Maryland’s proposed prohibition would also outlaw.

In Maryland, menthol cigarettes account for about half of all cigarettes sold in the state. Even without including all of the other flavored tobacco products, this represents a significantly-sized market which, if this proposal is enacted, would be pushed into the arms of the unlicensed tobacco dealers already operating in our state. Rather than encouraging healthier behaviors from  Maryland residents, this could increase risks to their welfare, increase enforcement costs, and divert millions in tax revenue to other states and criminal operations.  

Case Study: Massachusetts 

Massachusetts implemented the country’s first state-wide ban on flavored tobacco products in  June 2020. My colleague Jacob Rich, a policy researcher for both Reason Foundation and the  Center for Evidence-Based Care Research at the Cleveland Clinic, analyzed the ban’s impact by comparing cigarette sales in Massachusetts before and after its implementation. His analysis of national cigarette sales data shows that in the year following the prohibition, sales of menthol and non-menthol cigarettes declined in Massachusetts. However, sales in bordering counties increased, leading to a net overall increase in cigarette sales within the region of approximately 7.2 million packs. This indicates that the ban in Massachusetts merely diverted current menthol smokers to equally harmful non-menthol cigarettes and pushed sales of both menthol and non-menthol cigarettes to neighboring states.  

The result was no decrease in overall tobacco use and $125 million lost tobacco tax revenue for  Massachusetts. In Maryland, tobacco trafficking is likely to be significantly worse than in Massachusetts, given our residents’ proximity and access to neighboring states which do not yet outlaw flavored tobacco.  

Public Health 

The FDA acknowledges a “continuum of risk” for the variety of tobacco and nicotine products currently on the market, with cigarettes being the most dangerous and non-combustible alternatives,  such as snus, e-cigarettes, heated tobacco, and nicotine pouches, being the least dangerous. The FDA  has already authorized some of these products, deeming their availability to be in the best interest of public health, and allowed some to even be marketed as reduced-risk substitutes for smoking.  

The proposal before this committee would unnecessarily strip adults in Maryland of access to these  FDA-authorized and potentially life-saving alternatives, now and in the future.  

According to a 2020 study by Yale School of Public Health researchers, e-cigarette flavors are positively associated with smoking cessation outcomes for adults but not associated with increased youth smoking. Moreover, the prestigious Cochrane Review concluded that e-cigarettes are more effective than traditional nicotine replacement therapies in helping smokers quit smoking cigarettes. Criminalizing the sale of flavored e-cigarettes in Maryland, which are overwhelmingly preferred by adult vapers, risks driving users of these alternatives back to smoking while also fueling illicit tobacco markets, causing net harm to our state’s public health, social welfare, and economic well-being.  

Nicotine is not risk-free and the interest in preventing youth uptake is understandable. We all want to see fewer people smoking and fewer youth experimenting with tobacco. But the desire to protect adolescents from all risks, even those that are relatively small, does not justify at-any-cost measures like the one currently under consideration. Regulators must show regard for the needs of other populations, including youth once they reach adulthood, and consider the harm such laws may have on their welfare.  

If Maryland’s state and local authorities are competent enough to regulate flavored alcohol and soon-to-be-legalized flavored cannabis in ways that preserve adults’ ability to purchase them safely and legally without encouraging youth use, they should be similarly capable of limiting the sale of flavored nicotine products to adults in Maryland, especially when they offer current and future smokers in the state a life-saving alternative to combustible cigarettes. 

The post Testimony: Maryland Senate Bill 259 would lead to greater health disparities and criminal justice inequities appeared first on Reason Foundation.

The ban has served as a test for what other states and municipalities might expect if they enact similar prohibitions on flavored tobacco products. Although officials often promote tobacco control policies as ways to protect public health, the unintended consequences of menthol cigarette bans on total cigarette sales have puzzled many public health officials and raised important questions about the effectiveness of the prohibitions.

In my analysis of the comprehensive flavored tobacco ban implemented in Massachusetts, the data show that the prohibition of menthol cigarettes was followed by millions of additional cigarette sales in the six-state region of Massachusetts and its bordering states. The year following the ban on menthol cigarette purchases saw 15 million fewer packs of menthol cigarettes sold than the year before the ban. However, approximately 22 million additional packs of nonmenthol cigarettes were sold in those states in the year after the flavor ban, leading to a net increase in cigarette sales.

In the 12-month period following the implementation of the comprehensive flavor ban in Massachusetts, the state sold 29.96 million fewer (22.24% less) cigarette packs compared to the prior year. However, a total of 33.3 million additional cigarette packs were sold during the same post-ban period in the counties that bordered Massachusetts in the states of Connecticut (3.05 million additional packs), New Hampshire (25.84 million), New York (1.04 million), Rhode Island (6.01 million), and Vermont (1.21 million). Thus, considering the change in cigarette sales in the entire six-state region, there was a net increase of 7.21 million additional cigarette packs sold in the 12 months after the menthol cigarette ban in Massachusetts, a 1.28% increase in cigarette sales compared to the prior 12-month period before the ban.

A paper by Samuel Asare et al. (2022) published in JAMA Internal Medicine publicized a reduction in cigarette sales in Massachusetts following the menthol cigarette ban but failed to include all but one of the bordering states in its analysis. Additionally, the paper analyzed Nielsen Retail Scanner data, which only represented approximately 30% of all US mass merchandiser sales volume that year. In contrast, the Management Science Associates Inc (MSAi) data in my analysis represents all cigarette distribution throughout the entire US.

In conclusion, policymakers must be careful about enacting prohibitions for a variety of reasons, including when the banned product is still available for sale in nearby municipalities. This is especially true when tax rates in neighboring states are relatively low. In 2020, the sales tax for cigarettes in New Hampshire ($1.78 per pack) was approximately half that of Massachusetts ($3.51 per pack), which further incentivized bulk purchases of cigarettes and allowed for a sizeable smuggling market for black market sellers after the flavored tobacco ban was implemented. 

With similar flavored tobacco prohibitions being proposed in states like Maryland, which currently has a cigarette sales tax of $3.75 a pack, policymakers should keep in mind that neighboring Virginia has a much-lower sales tax of $0.60 per pack and that the cross-border smuggling of cigarettes would inevitably follow a menthol cigarette prohibition in Maryland.

The data from Massachusetts and neighboring states show the menthol ban did not stop people from buying cigarettes, with sales increasing by seven million packs in the year after Massachusetts’ flavored tobacco ban. Massachusetts’ flavored tobacco ban primarily sent buyers to others states and illicit markets, so other cities and states should consider the real-world impacts of implementing similar prohibitions.

The post The effect of menthol bans on cigarette sales: Evidence from Massachusetts  appeared first on Reason Foundation.

New York already enjoys the dubious honor of having the highest rate of illegal cigarette smuggling in the country. More than half of all cigarettes smoked in New York come from smuggled sources. The black market sales cost New York an estimated $1 billion dollars a year in tax revenue, according to the Tax Foundation.

Banning menthol cigarettes would put rocket boosters under the illicit tobacco market and reduce the state’s tax revenues. That’s what happened when Massachusetts banned flavored tobacco. One year after Massachusetts’ 2020 ban on menthol cigarettes was implemented, nearly 30 million fewer packs of cigarettes were sold in the state, Reason Foundation’s Jacob James Rich found. But, as smokers sought their preferred products elsewhere, 33 million additional cigarette packs were sold in bordering states than were sold the year before Massachusetts’ ban.

There’s no doubt the governor has been sold on good intentions and the virtues of prohibition. Advocates claim that menthol cigarettes are more addictive, easier for kids to start using, and harder for smokers to quit. But none of these claims are true.

Research shows menthol smokers tend to start smoking later in life and smoke fewer cigarettes per day than non-menthol smokers. States that have higher rates of adult menthol smoking relative to non-menthol smoking actually have lower youth smoking rates. Research from Vanderbilt University Medical Center, published in the Journal of the National Cancer Institute, found no statistically significant difference in successful quit rates between menthol and non-menthol smokers. There was also no difference in the quit rates between Black and white smokers.

Supporters of prohibition claim a menthol ban is needed to tackle smoking in the Black community because the majority of Black smokers choose menthol products. But the Black youth smoking rate in New York is just 4.2%, while the white youth smoking rate is 4.4%. For adults, white New Yorkers are the most likely to smoke at 12.9% compared to the 11.3% of Black New Yorkers who smoke. Given menthol and nonmenthol cigarettes are equally toxic, it’s odd that one should be singled out over the other. Gov. Hochul isn’t advocating for banning products preferred by the largest group of smokers in the state — white New Yorkers.

It’s also a sad irony that Hochul is pursuing this policy when New York City was where Eric Garner was pointlessly killed by police during an arrest for selling untaxed cigarettes in 2014. Last year, the mothers of Garner and Trayvon Martin, and George Floyd’s brother pleaded with the Biden administration not to ban menthol cigarettes nationwide.

Yet supporters of menthol prohibition frequently cloak the ban in the language of equity. It’s an eccentric argument to claim that banning sales of cigarettes favored by Black smokers while the preferred choice of white smokers remains legal is the most equitable policy when they smoke at similar rates. There are uncomfortable tinges of the government’s unjust sentencing differential that hurt minority communities by mandating harsh sentences for crack cocaine and lighter sentences for powder cocaine, which had disparate use rates but similar risks, just like menthol and nonmenthol cigarettes.

Few issues unite conservatives like Grover Norquist of Americans for Tax Reform with progressives like the Rev. Al Sharpton and the American Civil Liberties Union, but opposition to menthol bans is one of them. Whether viewed through the lens of individual choice or social justice, Hochul’s proposed prohibitions can be relied upon to unite a diverse coalition of opponents.

Gov. Hochul should abandon the proposed ban. Youth smoking is at its lowest rate in decades and has almost disappeared in the state. With safer nicotine alternatives making traditional smoking increasingly obsolete, public health can continue to improve without a menthol ban that would surely bring negative racial justice implications and usher in criminal punishments that would disproportionately impact New York’s minority communities.

A version of this column first appeared in the New York Daily News.

The post New York shouldn’t ban flavored tobacco products appeared first on Reason Foundation.

Public polling indicates many American smokers say they want to quit using combustible cigarettes. Despite the existence of tobacco control policies and traditional cessation methods, 30.8 million adult smokers remain, many of whom have not tried to quit or have not quit successfully. For this population of smokers, a suite of safer nicotine alternatives such as e-cigarettes, nicotine pouches, snus, and heat-not-burn products may succeed in helping them quit where other policies have failed.

Traditional tobacco control strategies such as education, taxation, marketing restrictions, and bans on smoking in a growing list of public spaces have contributed to a gradual reduction in the smoking rate from its peak of around 40 percent in the mid-1960s to 12.5 percent today. Safer nicotine alternative products are a newer, yet crucial, component of a tobacco harm reduction strategy, giving those smokers who would not otherwise have quit a way to use nicotine without the smoke that may kill them. A substantial body of evidence demonstrates that these tools are more effective in helping smokers quit than traditional cessation methods, such as nicotine replacement therapies (NRTs), and are vastly less harmful to human health than combustible tobacco. 

To maximize these products’ potential to help improve public health while limiting youth access and uptake, Congress, the U.S. Food and Drug Administration (FDA), and the Centers for Disease Control and Prevention (CDC) must ensure consumers have access to these products at reasonable prices and are accurately informed about their risk relative to cigarettes. 

Correcting misperceptions

Millions of Americans have successfully switched from combustible cigarettes to safer nicotine alternatives. While the overall smoking rate has declined to a generational low, smoking remains disproportionately high among low-income communities, people without college degrees, and those with mental health problems.

A substantial barrier preventing greater uptake of safer alternatives to cigarettes is the widespread misperception among a majority of the public and physicians that these products are just as dangerous or more dangerous than combustible cigarettes.

For example, though the spate of lung injuries and deaths that occurred in 2019 were quickly linked to the proliferation of adulterated cannabis vapor products, public polling suggests a majority of adults attribute the outbreak to nicotine vapor products.

In Dec. 2022, a group of public health experts urged the CDC to correct rampant misinformation regarding the dangers of e-cigarettes. Speaking to the Associated Press in 2022, the Director of FDA’s Center of Tobacco Products (CTP) Dr. Brian King said there were widespread misperceptions around the use of e-cigarettes.

“I’m fully aware of the misperceptions that are out there and aren’t consistent with the known science,” King said. “We do know that e-cigarettes — as a general class — have markedly less risk than a combustible cigarette product.”

But, as of now, it appears the FDA has no plans to correct these misperceptions.

Congress can contribute to communicating clear and accurate information on the relative risks of noncombustible products and potential benefits for adult smokers who switch to these products. Unfortunately, the FDA and the CDC are currently falling short of this mission, and neither agency has outlined any plans to address the problem. It is the responsibility of Congress to hold both to account.

Reagan-Udall Foundation evaluation

After a series of missteps handling e-cigarette product applications, FDA Commissioner Robert Califf asked the Reagan-Udall Foundation (RUF) to evaluate the FDA’s tobacco program. RUF was established by Congress “to advance the mission of the FDA to modernize medical, veterinary, food, food ingredient, and cosmetic product development, accelerate innovation, and enhance product safety.”

In Dec. 2022, the Reagan-Udall panel delivered its verdict on FDA’s performance. The report found several failings at the FDA, including opacity and confusion regarding the agency’s refusal to authorize safer nicotine products. 

In 2009, Congress passed the Tobacco Control Act, which established a pathway for authorizing safer nicotine products, ensuring tobacco harm reduction could play some role in reducing smoking rates. But in practice, the process has created a functional barrier to entry for legitimate companies and products, costing vast sums of time and money per application and leaving applicants unsure of what materials they need to provide for a successful application. In the meantime, the vapor market, bereft of FDA-authorized options, has been flooded with illegitimate products in order to fill the vacuum.  

In particular, RUF’s report called on the FDA to define what is “appropriate for the protection of health,” a central factor in determining whether to authorize new products. The evaluation also called on the FDA to develop and implement a comprehensive plan for the Center of Tobacco Products’ goals and priorities, greater transparency, engagement with industry stakeholders, clarity on when FDA decisions prioritize public policy or political concerns rather than the strength of the underlying science, removing illicit products from the market, and simpler processes for authorizing certain novel products that may benefit individual and public health. Congress should closely monitor the FDA’s efforts to implement RUF’s recommendations and, if it refuses to do so, investigate why.   

Taxation

Research shows e-cigarettes are substitutes, not compliments to traditional cigarettes. There are good reasons to tax combustible cigarettes, such as recouping costs to the health care system attributable to smoking-related diseases and discouraging youth smoking. But since noncombustible nicotine products, like e-cigarettes and other reduced-risk products, present significantly less danger to consumers and offer a net benefit to public health if smokers switch from cigarettes, sound public policy dictates that these products should be taxed at a significantly lower rate than cigarettes, if at all. 

In the last Congress, there were attempts to introduce the first federal e-cigarette tax, which would’ve set the tax to be equivalent to the tax on cigarettes. According to modeling from Georgia State Univerity Professor Michael Pesko, the tax would have resulted in fewer adult e-cigarette users and an increase of 2.5 million more smokers than there would be otherwise. Taxing less harmful products at a level equal to or higher than the most deadly products provides a clear disincentive for smokers to switch, thus resulting in net harm to public health. Additional federal taxes on e-cigarettes and other harm reduction taxation tools would prevent a significant number of smokers from switching, harming public health, and should be resisted. 

Conclusion

Innovation presents promising opportunities to improve public health and support small businesses. While the economic benefits are secondary to the public health benefits, in 2019, The Washington Post reported that vape shops were the fastest-growing U.S. retail segment of the previous decade. Unfortunately, many of these stores have already been forced to shut their doors over the past three years in large part due to the flood of misinformation about these products and the byzantine regulatory process the FDA has yet to fix.

A sound regulatory framework for safer alternatives to cigarettes would ensure these harm reduction options are available to the consumers who need them at reasonable prices while still limiting the access young people have to them. Ensuring the FDA and the CDC are supporting, rather than hampering this public health objective is a sure way Congress can bear down on the public health toll of smoking. 

The post Tobacco harm reduction should be on Congress’ agenda appeared first on Reason Foundation.

The final report, which found FDA “struggled to function as a regulator in part due to some of its own policy choices,” likely made for uncomfortable reading at the agency.

Since 2009, all tobacco products have been regulated by the FDA. Products not on the market before Feb. 2007, like e-cigarettes, must undergo an expensive and time-consuming application process to be authorized for sale. Before they can be approved, each product must demonstrate to the FDA it is “appropriate for the protection of public health” for both users and non-users. For products that had already been on the market, the deadline to submit their applications was eventually set for Sept. 2020.

But the FDA denied the vast majority of e-cigarette applications, claiming they were of insufficient quality or failed to demonstrate a net public health benefit. As a result, most of the safer alternatives to cigarettes that were on the market prior to 2020 are now illegal in the United States. But the FDA’s lack of guidance to applicants, opacity in decision-making, and blanket denial of all products marketed using non-tobacco flavors left the agency exposed to litigation, with many suspecting the agency’s decisions are heavily influenced by anti-vaping politics rather than science.

Among the recommendations in the Reagan-Udall report was for the FDA to provide a clear definition and interpretation of “appropriate for the protection of public health” and transparency around political considerations and value judgments in the FDA’s decision-making.

During the evaluation, FDA staff complained to Reagan-Udall that decisions on product applications were prioritizing politics over science. The report also called for “more substantial engagement with stakeholders and the public.”

In this context, last week, the American Vapor Manufacturers Association (AVM), a trade organization representing the independent vapor industry, highlighted the FDA’s public calendar for last December. AVM found that FDA officials met with four organizations that are hostile to e-cigarettes as a tobacco harm reduction tool to discuss Reagan-Udall’s findings in the hours and days following its publication. These organizations include the Campaign for Tobacco-Free Kids, American Heart Association, American Lung Association, and the American Thoracic Society.

The FDA declined to comment on whether these meetings were held at its request. But Reason Foundation confirmed with the American Heart Association and the American Thoracic Society that these discussions were held at the agency’s request. The American Vapor Manufacturers’ Association announced that the head of the Center for Tobacco Products, Brian King, had agreed to meet with the FDA for a public dialogue on e-cigarettes, making it the sole group supportive of e-cigarettes as a harm reduction tool to have such a meeting to date.

“Dr. Califf’s rush to meet with four separate organizations dedicated to banning safer alternatives to smoking is emblematic of so many of the serious issues identified by the Reagan-Udall review,” said AVA’s Director of Legislative and Regulatory Gregory Conley. “Other centers at the FDA interact regularly and productively with the industries they regulate, but when it comes to nicotine products, FDA’s top priority is keeping activist groups happy.”

The select access granted to anti-vaping groups is particularly jarring given the FDA’s very different to another Reagan-Udall report—this one on its food program, which also found the agency to be woefully deficient. In that case, The New York Times reported:

The Food and Drug Administration’s food division has no clear leadership, avoids bold policy or enforcement actions, and fosters a culture that doesn’t adequately protect public health, according to a report issued on Tuesday by an agency-related group.

Experts with the group, the Reagan-Udall Foundation, which was asked to examine the food division after widespread criticism stemming from the infant formula crisis, concluded in the report that the division’s management structure and mission should be overhauled.

Dr. Robert Califf, the agency commissioner, released a statement Tuesday saying he would form a group to advise him on the findings and on how to put the recommendations in place. The infant formula crisis was the first major challenge that Dr. Califf confronted this year as commissioner, although the agency has also faced criticism over the regulation of vaping and tobacco products, which prompted a similar review of its tobacco division.

Immediately following the publication of the food report, the FDA held meetings with stakeholders, including campaign groups and the industry itself, notably food and beverage giant Nestlé.

Perhaps in response to AVM’s highlighting of the issue, Dr. Brian King, the director of FDA’s Center for Tobacco Products, agreed to a public discussion on Feb. 24, according to the American Vapor Manufacturers. While this engagement is welcome, the fact that the FDA’s first response to a critical report was to request private meetings with the chief supporters of the status quo inspires little confidence that the agency can adequately change and foster a marketplace conducive to the public health benefits that could come with a science-based tobacco harm reduction approach.

Sadly, it appears any positive changes in the FDA’s approach to safer alternatives to traditional cigarettes may need to come through the new Congress intervening and ensuring the agency takes heed of the very review the FDA commissioned itself.

The post FDA needs a new approach to e-cigarettes and other safer alternatives to traditional cigarettes appeared first on Reason Foundation.

The problem largely boils down to the fact that D.C.’s sports betting market, particularly for mobile wagers, is fundamentally unattractive to bettors. And the reason for that is so simple it can be summed up in one word: monopoly.

After the U.S. Supreme Court cleared the way for states to legalize, regulate, and tax sports betting in 2018, Washington, D.C., was one of many jurisdictions to jump at the potential revenue windfall. But, while other states authorized a range of in-person and online bookies to compete for customers, D.C. gifted nearly its entire market to one company. 

That company, Intralot, was already running the city’s lottery and also happened to have established relationships with some councilmembers, particularly Jack Evans, who resigned over alleged ethics violations in 2019. Yet, amid concerns over potential cronyism and even an FBI probe into the matter, the city council approved a $215 million no-bid contract with Intralot in 2019, guaranteeing the company’s GambetDC app would be the only legal option for mobile sports betting available citywide.  

To nobody’s surprise, the utter lack of competitive pressure did not encourage the creation of a competitive product, with features, services, and prices enticing enough to draw bettors away from the casinos of Las Vegas and Atlantic City or the thousands of illegal sports betting websites operating off-shore. Intralot’s GambetDC was a disappointment from the first day of its rocky launch, with users reporting geolocation errors, glitching, and terrible gambling odds compared to others. The app hasn’t improved much since, with the iOS version crashing for the duration of last year’s Super Bowl, the biggest sports betting day of the year.

Bettors’ deep dissatisfaction with GambetDC can be seen clearest by looking at its average “handle,” which is the total amount of money wagered through a bookie during a given period. In the first full year of its operation, between June 2020 and June 2021, GambetDC took in an average handle of just $3 million a month. During that same period, the average handle of West Virginia’s sports betting market was $40 million while the average for FanDuel in Pennsylvania, just one of the state’s fourteen mobile sportsbooks, was $160 million per month.

Councilmembers should have known the Intralot monopoly was a bad bet from the beginning for at least two major reasons. First, the only way Intralot could promise the council such high rates of return was because the company planned to juice its profits by charging bettors more and paying winners less. This is a strategy that could only work if consumers liked the product enough or if it truly was their only option. 

Second, all of the predictions about the District’s sports betting market, from both Intralot and city officials, relied on the assumption that D.C. would have a ‘first mover’ advantage, becoming the first jurisdiction in the region with legal sports betting. The city council hoped to secure an advantage by bypassing the normal competitive bidding process.  Neither a high rate of return nor a first-mover advantage came to fruition. 

In the world of sports betting, sportsbooks calculate the probability of all potential outcomes for any given wager and adjust the odds to encourage balanced betting. Odds basically function like a price tag, with bets on likely winners costing more than bets on likely losers, and by adjusting the odds up or down so that, if done perfectly, the money sportsbooks collect from losing bets is equal to the money they must payout to winners. Because bookies do not want just to break even though, they add a small fee within the odds known as a “vig” or “hold.” Typical sportsbooks set their odds so that this hold rate generally falls between 5 and 10 percent, high enough to generate a slim profit but not so high that their bettors turn to competitors with better pricing. When Intralot presented its initial proposal to the city council, it indicated a planned hold rate of between 20 and 30 percent.

As veteran sports gaming reporter David Purdum put it, placing wagers through the District’s GambetDC app is akin to “paying $2 for a gallon of gas, while other states are only charging $1.” For bettors, this means that placing a bet through D.C.’s mobile sports betting app costs more than placing that same bet at virtually any other sportsbook.  

Intralot apparently thought it could get away with charging bettors more money for an inferior product because, as a Lottery spokesperson told reporters in 2020, GambetDC was not designed “to attract high-stakes bettors and odds shoppers,” but rather as a form of “entertainment to casual bettors.”

Presumably, Intralot felt these casual bettors would not know enough to realize GambetDC is overcharging them, and even if they did, Intralot’s government-sanctioned monopoly gave bettors few alternative options. Unfortunately for Intralot, sports bettors in the District of Columbia proved more sophisticated than the company anticipated. 

By the time D.C.’s sports betting market actually opened in May 2020, GambetDC was hardly the only game in town. In addition to vibrant in-person sports betting markets, New Jersey, Pennsylvania, and West Virginia had launched their mobile sporting betting markets before D.C., with Virginia months behind and Maryland poised to follow soon after. Bettors in the D.C. region seemed more content to wait in around-the-corner lines to place bets at William Hill’s in-person sports book that opened in July 2020 and quickly outpaced GambetDC’s handle. Others continued the time-honored tradition of border jumping and traveled to states with more competitive gambling markets. By January 2021, this meant little more than driving, riding the metro, or even cycling just over the D.C. line into Virginia. 

From the beginning, Virginia’s sports betting market offered more variety than D.C., with four separate mobile sportsbooks. Today, Virginia boasts 14 mobile sportsbooks, including nationally-recognized brands, which, along with in-person sportsbooks, collectively generated nearly $60 million in taxes for the state in less than two years. Some of that revenue, perhaps a significant amount, could have gone to D.C. if the city had not so spectacularly fumbled the ball. 

Luckily, if the cause of D.C.’s sports betting woes is simple, the solution is even simpler. Councilwoman Elissa Silverman, one of the few who originally opposed the Intralot deal, introduced legislation in October that would let the city’s five-year contract with Intralot expire, end its monopoly on mobile sports betting, and allow D.C. to issue licenses to other competitors, ideally many. 

“Residents deserve an online app that works, taxpayers deserve a program that brings in money for the District, and we all deserve a system where we don’t hand huge contracts to a preferred company and its subcontractors without even looking at the competition,” Silverman said in a press release accompanying the legislation.  

Rarely are legislators faced with such an easy decision, but this one is a slam dunk. Moving away from the monopoly deal with one-well connected company and increasing the variety of participants in and competitiveness of D.C.’s mobile sports betting market would produce better products and prices for consumers. As a result, it would also attract more betting and generate more tax revenue for the District of Columbia.

The post Fix D.C.’s sports betting market by ending the monopoly appeared first on Reason Foundation.

Thank you for the opportunity to testify today. My name is Jacob James Rich, and I am a researcher at the Cleveland Clinic Center for Value-Based Care Research pursuing my Ph.D. at the Case Western Reserve University School of Medicine. I am also a health care policy analyst at Reason Foundation, a 501(c)3 nonprofit policy research organization. I write academic research on how to reduce tobacco use and was recently awarded Case Western’s Diversity, Equity, and Inclusion (DEI) award to pursue research that addresses health disparities among marginalized populations.

The potential regulation of flavored tobacco in the city of Columbus is designed to reduce tobacco use, particularly among communities of color. Given that rates of lung disease among black Americans are higher than other populations, even amid lower rates of historic tobacco use, pursuing interventions to reduce smoking rates in this population should be applauded. However, there is little evidence that comprehensive tobacco flavor bans significantly reduce rates of smoking among adults or youth, and the criminal justice implications of a menthol ban may, in fact, further exacerbate health disparities in the black community.

Policymakers should be concerned about the differential racial impact of this regulation. Menthol cigarettes are preferred by the black population. Therefore, a menthol cigarette ban would likely allow most white people to freely and legally continue to smoke their preferred cigarettes, while communities of color would need to either travel outside city limits or source from unlicensed cigarette providers. This could be disastrous, as it may increase police officer confrontations and increase the number of street sellers who are more likely to sell cigarettes to young people.

Additionally, in just about every way possible, nonflavored cigarettes cause much more harm in the United States than menthol cigarettes. First, more people smoke nonflavored cigarettes than menthol cigarettes — both adults and youth. Second, people who smoke menthol cigarettes tend to smoke fewer cigarettes a day. Given these considerations, nonflavored cigarettes are typically the more addictive product, so a true public health approach would prioritize controlling nonflavored cigarettes. It is also not clear that the regulation will even reduce smoking.

Case Study: Massachusetts Comprehensive Tobacco Flavor Ban

On June 1, 2020, Massachusetts implemented a tobacco flavor ban. I authored an analysis that compared cigarette sales in Massachusetts after the flavor ban to the year prior to the ban, finding millions of additional cigarette sales in and around Massachusetts when combined with its bordering states. It is true that menthol cigarette bans reduce cigarette sales locally. However, if surrounding localities have lower cigarette taxes — just like they did near Massachusetts and do near Columbus — total cigarette sales actually tend to increase as residents drive across borders and buy cigarette cartons in bulk.

Conclusion

In conclusion, flavor bans at the local level have little effect on public health and potentially disastrous consequences for communities of color. Massachusetts has already conducted multiple raids after implementing its flavor ban, mostly in communities of color. I urge the city of Columbus to collaborate with community members in determining an inclusive approach to improving health outcomes among its historically marginalized populations.

Thank you for your time and consideration.

The post Testimony: The negative impacts of Columbus’ proposed ban on flavored tobacco appeared first on Reason Foundation.

I want to thank the expert panelists for including this public dialogue as part of their evaluation of the U.S. Food and Drug Administration (FDA). I would also like to make it clear that my interest in this conversation is not to advocate for or against any particular product or company. My interest is in people, the individual human beings whose lives can be drastically affected, for good or for bad, by the way government agencies approach regulation. It is people who are at the heart of the discussion about tobacco regulation and this investigation into how well the FDA is fulfilling its public mission. 

While there is no shortage of debate when it comes to how tobacco products should be regulated, there is widespread agreement that the current approach adopted by the FDA is not working. The enormous challenge facing the experts on the panel is to shed light on why that is the case and what can be done to fix it for the benefit of the public. To that end, I offer the following comments, and I hope they will bring some sober clarity to a controversial issue. 

The overarching message I would like to communicate is this: Unless there is a viable pathway for safer products to enter the market legally, there will be no innovation toward safer products, and we will continue to condemn the millions of current and future adults who enjoy the non-medical use of nicotine to one of two undesirable options—illicit market products or deadly combustible cigarettes. 

Challenge #1: A comprehensive approach to tobacco and nicotine regulation that is principles-based, reasonable, and implemented consistently across all programs

For nearly every other risky or potentially harmful behavior, we recognize that incentives matter. It is generally acknowledged that regulation cannot prevent risk, but it can encourage markets and people to be as safe as possible. Seatbelts, helmets, electric vehicles, contraception, pre- and post-exposure prophylaxis, ridesharing, opioid maintenance therapy, and Narcan are just a few examples of how the market, unhindered by regulation, has provided means to reduce the potential harm of risk-taking behaviors, both for the individuals engaging in that behavior and for those around them. 

Yet, when it comes to tobacco, the FDA, whether accidentally or not, has adopted an approach that maximizes, rather than minimizes, harm. Instead of promoting public health through a regulatory process that champions innovation, the agency has made it all but impossible for such innovation to occur or, at least, for the products of innovation to make it into consumers’ hands.

The result is that, unlike all other areas of our lives, FDA regulation has preserved and protected the most dangerous form of nicotine use, smoking combustible cigarettes, from extinction. 

This is, in part, because the regulatory framework was structured around cigarettes with the goal of suppression. Unfortunately and unsurprisingly, this framework has made it impossible for truly novel products to enter the market. Many see this blockade of new nicotine products as a positive outcome, but the perverse unintended effect is that it is still easier for combustible cigarettes to gain FDA authorization than the safer products that could displace them. Worse, it leaves consumers who already rely on less harmful forms of nicotine use frustrated and most of the public confused about the relative risks and benefits of various products.  

It doesn’t have to be this way and, for a moment in 2017, it seemed the FDA recognized the need to modernize its approach in response to the market’s rapid shift toward tobacco harm reduction. In that year, the agency announced its comprehensive plan for tobacco and nicotine regulation which recognized that tobacco products exist on a continuum of risk, that nicotine, while not risk-free, is not the main source of tobacco-related mortality or morbidity, and acknowledged that in the best interest of public health, the agency’s approach to reducing the harms caused by smoking required an equal effort to promote less harmful alternatives.  

This plan, had it been implemented, would have likely addressed many of the challenges the FDA now must address. Unfortunately, while the agency has taken steps to reduce the appeal of combustible cigarettes, it has apparently abandoned its promise to promote the development of and consumer access to safer nicotine alternatives. And the continued failure of the FDA to adhere to any sort of comprehensive approach could have disastrous consequences. Take, for example, the FDA’s proposed prohibition on menthol as a characterizing flavor in combustible cigarettes and cigars. 

The goal of the proposed menthol ban is to reduce the appeal of combustible cigarettes, used disproportionately by people of color. According to the FDA’s calculations, the ban would result in less initiation of cigarettes by youth, increase smoking cessation among adults, and lead to better health outcomes in many populations.

Those calculations, however, were based on certain assumptions about how consumers might respond to such a ban, given the other options available to them. Surprisingly, a great amount of the health benefits the FDA expects a menthol ban to produce, upwards of half, come from consumers replacing combustible menthol cigarettes with mentholated versions of noncombustible e-cigarettes. The problem with this is that few menthol smokers will have this option as the FDA has so far not authorized a single mentholated e-cigarette and has given little reason to believe they ever intend to do so. 

Recommendations for FDA: 

• Issue an updated comprehensive approach to tobacco and nicotine that is principles-based, reasonable, and implemented consistently across FDA programs to guide regulation and research. In addition to the 2017 plan, we suggest they refer to the Institute of Medicine’s 2001 Clearing the Smoke report. 

Challenge #2: Compliance standards that are clear, transparent, and predictable

In the first public meeting the Reagan-Udall Foundation held on this topic, one of the stakeholders expressed his belief that tobacco manufacturers, including those of lower-risk nicotine products, have no interest in being regulated and have intentionally submitted deficient pre-market tobacco applications in order to slow down enforcement by the agency. 

But within the nicotine alternatives market are thousands of small businesses who desperately want to understand what the FDA wants from them in order to approve their products for legal sale and reasonable regulations that would protect their companies, as well as the entire market, from bad actors. 

The problem is not that the industry doesn’t want to comply with FDA regulations, the problem is that they cannot. By constructing an opaque and seemingly arbitrary pre-market authorization process and by failing to set reasonable standards, the FDA has created regulatory hurdles too high for all but the largest tobacco makers to surmount. 

Recommendations for FDA: 

• Set clear and consistent standards, requirements, and thresholds.
• Provide detailed definitions for critical terms like “appropriate for the protection of public health” and disclose how those definitions are calculated or determined.
• Be more transparent, cooperative, and flexible; convening meetings for public discourse, workshops, and unbiased explanations for its decisions and conclusions.

Challenge #3: A more appropriate balance between innovation, risk, and the needs of various populations

The FDA’s interest in preventing potentially harmful products from entering the market is understandable. However, aversion to this risk must not come at the expense of squashing innovation that could have a positive net benefit to public health. Nor should the agency’s aversion to the small potential risks presented by new products blind the FDA to the potential risks caused by a market that is too tightly regulated that it spurs the proliferation of illicit markets or denies consumers potentially life-saving alternatives.

Similarly, the FDA’s concern about youth experimentation and initiation with novel nicotine products is reasonable. But that concern should not lead to decisions made at the expense of current and future adult smokers. The FDA certainly has a role to play in addressing the population-level risks associated with novel tobacco products, but unlike matters such as those relating to product safety, these concerns do not justify the existing bottleneck created by the FDA’s onerous pre-market approval regime.

Challenge #4: More efficient pathways to the authorization of lower-risk products

Many of the challenges faced by the FDA’s Center for Tobacco Products (CTP) in recent years stem less from resource limitations than they do from choices regarding implementation and priority-setting.

The FDA has thus far given marketing orders to just a handful of noncombustible products, the vast majority of which are owned by large tobacco firms. This will continue to be the case so long as the approval process remains onerous, slow, and wasteful. Other nations have structured regulations based on standards and thresholds, which make compliance and, more importantly for the FDA, verification a far easier and less resource-intensive task.

The results of this standards-based approval regime are vibrant markets, with devices and flavors that meet consumers’ needs, without the problems of youth experimentation that have so vexed U.S. health authorities. Adopting a similar standards-based approach, with streamlined pathways, categories for products and components, and a substantial equivalence for novel lower-risk products would allow companies (as well as the FDA staff) to conduct more efficient reviews, ensuring that the rules encourage compliance, protect the public, and leave nobody behind. 

Recommendations for FDA

• Use rulemaking power to establish streamlined Premarket Tobacco Product Application (PMTA) pathways for non-combustible products rather than forcing those products likely to be significantly less harmful than smoking to an outdated pathway even more onerous than for combustible cigarettes.
• Create a standards-based regime, with a small number of reasonable criteria for products the FDA would approve, similar to how regulation occurs in France and the United Kingdom.
• Create a substantial equivalence pathway for novel lower-risk products. This could be accomplished by “deeming” all those products which have or will receive marketing orders by the FDA as “predicate” on a rolling basis.
• Create a definition for “minor” changes as opposed to “significant” changes and created a streamlined approval process for minor changes (such as those relating to packaging, container size, and other modifications not expected to increase the potential risk of the product).
• Conduct periodic performance reviews to assess how well FDA regulation is working for consumers of reduced-risk products, based on turnaround for applicants, number of approvals for sufficient applications, and market dynamism.
• Hold public meetings with small industry participants to inform such performance reviews.

The post Testimony: FDA regulation has preserved and protected the most dangerous form of nicotine use—smoking combustible cigarettes appeared first on Reason Foundation.

The case pits the National Pork Producers Council and the American Farm Bureau Federation, representing the nation’s leading pork producers—who raise, slaughter, and process meat from pigs for sale across the country—against the state of California.

The plaintiffs, Reuters reported, “are appealing a lower court’s decision to throw out their lawsuit seeking to invalidate a 2018 ballot initiative passed by voters barring sales in California of pork, veal[,] and eggs from animals whose confinement failed to meet minimum space requirements.”

As I explained in a column in April, after the Supreme Court agreed to hear the appeal, that ballot measure, Proposition 12, was adopted in 2018 by nearly two-thirds of California voters. Prop. 12 prohibits confining livestock “in a cruel manner” and requires livestock animals whose meat, offspring, or eggs will be sold in California to be confined in spaces large enough that they have sufficient room to lie down, turn around, or spread their wings. Those found to have violated the law could face fines and possible jail time. 

As California’s Department of Agriculture explains, the law applies to “animals raised on farms within or outside of California.” Given that very few pork producers are based in California—the state imports more than 99% of its pork—the intended and actual impact of the law will be borne by farmers raising livestock on farms outside of California.

What’s more, although Californians consume around 15% of the nation’s pork, only around 4% of pork producers nationwide currently meet California’s standards. In other words, Prop. 12 deems 96% of the pigs raised by farmers across the country to have been raised “in a cruel manner,” and their meat, hence, cannot be sold in California. Prop. 12, then, could dramatically curtail or even effectively ban the sale of pork in California while harming the national economy and farmers and consumers in states across the country.

The lawsuit the Supreme Court heard this week asks whether California’s Proposition 12 violates the dormant Commerce Clause by impermissibly interfering with animal agriculture in the states that provide pork to buyers in California—from restaurants to grocers to everyday consumers. As I’ve explained, the term “dormant Commerce Clause” means “that because Congress has plenary authority over interstate commerce under the Commerce Clause, individual states necessarily lack such power”—hence the clause’s dormancy as pertains to state governments.

Notably, one of the primary reasons for including a Commerce Clause in the federal Constitution, leading scholars have explained, is that in the years between the signing of the Declaration of Independence and the adoption of the federal Constitution, “[s]tates [had] erected an assortment of trade barriers to protect their own businesses from competing firms in neighboring states.”

In highlighting their arguments as they pertain to the Supreme Court’s relevant dormant Commerce Clause jurisprudence, the pork producers’ June 2022 brief to the Supreme Court declares:

A state law runs afoul of the negative implications of Congress’s power ‘[t]o regulate Commerce among the several States’ if its ‘practical effect’ is to ‘control [commercial] conduct beyond the boundaries of the State,’ even if the law is ‘triggered only by sales’ occurring ‘within the State.’ A state law also is unconstitutional if it imposes a burden on interstate commerce that is ‘clearly excessive in relation to the putative local benefits.’ (internal citations omitted)

During oral arguments this week, Timothy Bishop, attorney for the pork producers, explained to the Supreme Court justices that Prop. 12 is unconstitutional under both of the above prongs. “Proposition 12 violates the Commerce Clause almost per se because it’s an extraterritorial regulation that conditions pork sales on out-of-state farmers adopting California’s preferred farming methods, for no valid safety reason,” Bishop told the Supreme Court. “Proposition 12 also… burdens interstate commerce for no local benefit.”

The Biden administration agrees. It rightly sided with the pork producers, asserting in an amicus brief “that states cannot ban products ‘that pose no threat to public health or safety based on philosophical objections.’”

In questions to attorneys during Tuesday’s oral arguments, the Los Angeles Times reported this week, Supreme Court Justices appeared “wary” and “skeptical” of Proposition 12, “warning it could set off a wave of state laws that put a wide array of restrictions on products moving nationwide.”

Justices across the political spectrum envisioned ways states could retaliate against each other should they reject the pork producers’ arguments and uphold the California law. “Progressive Justice Elena Kagan wondered what would happen if Democratic states banned the sale of goods made by non-unionized workers,” Yahoo! News reported. “Her conservative colleague Amy Coney Barrett imagined that [some states] would ban goods from companies that did not fund medical care for their transgender employees.”

Importantly, the report also notes, the case has forced the nine justices to “ponder the criteria that would allow comparable cases to be resolved in the future.”

These are exactly the right questions for the Supreme Court to ask. Years ago, I pondered what a related California animal-rights case could ultimately mean for the nation’s food economy. I used a hypothetical example of drought conditions—which are terrible and worsening in California—and what might happen if other states were to ban sales within their borders of foods grown or produced in states experiencing drought conditions.

“If California may dictate standards for raising animals in other states, then any state—in keeping with the hypothetical, let’s say Iowa—could pass a law that prohibits, say, farmers from raising crops in drought-stricken areas,” I wrote. “The justification? It’s not a good use of water, and water should be conserved (rather than exported in the form of produce) in times of drought. Since California is in the midst of a decade-long drought, then that rule would effectively bar California crops from Iowa. If a handful of other states followed, then the rule could doom California agriculture.”

Such a ban might apply to everything from California’s oranges to its avocados, beef, poultry, olives, and wine—to name just a few foods. Depending on the number and size of the state or states that were to adopt such an anti-drought law, the impact on California’s farming communities and the state’s economy as a whole could be devastating. That’s why this case will likely have wide-ranging implications beyond the pork industry and even beyond California.

As I explained in a 2010 Chapman University Law Review article, The “California Effect” & the Future of American Food: How California’s Growing Crackdown on Food & Agriculture Harms the State & the Nation, laws passed in California can impact every American. Much of that is due to the state’s clout, stemming from its massive geographic size and enormous economy. But it’s just as true that California has a growing number of food laws—from Prop. 12 to the state’s equally unconstitutional foie gras ban—that force businesses located in other states to adhere to those California laws, even if laws in their states are less restrictive.

As I detailed to the Supreme Court in an amicus brief submitted on behalf of Reason Foundation and the Cato Institute in 2018, upholding a California animal-rights law that seeks to regulate farm conditions in 49 other states risks and “could ultimately destroy our national market in food.”

That market is essential to America’s past and present, and—if the Supreme Court rules in favor of the pork producers later this year—will be to its future as well.

The post Supreme Court hears pork producers’ challenge to unlawful California animal rights law appeared first on Reason Foundation.

Reason Foundation’s policy analysts are examining statewide ballot initiatives on issues related to consumer freedom, including, sports gambling, flavored tobacco and e-cigarettes, wine and alcohol sales, and more.

California Proposition 26 (2022): In-person sports betting regulation and tribal gaming expansion

California Proposition 27 (2022): Legalizes online sports betting, funds homelessness and mental health programs

California Proposition 31 (2022): Banning flavored tobacco products

Colorado Initiative 96 (2022): Concerning liquor licenses

Colorado Initiative 121 (2022): Sales of wine in grocery stores

Colorado Initiative 122 (2022): Third-party delivery of alcoholic beverages

Maryland Question 4 (2022): Marijuana legalization amendment

Voters’ guides for other states and policy issues can be found here.

The post The 2022 ballot initiatives about consumer freedom issues appeared first on Reason Foundation.

On August 28, 2020, California Gov. Gavin Newsom signed into law a ban on the sale of flavored tobacco products. California Senate Bill 793 bans menthol cigarettes, e-cigarettes in flavors other than tobacco, as well as oral tobacco products. Exceptions were made for hookah, premium cigars, and pipe tobacco. Retailers selling flavored tobacco products may be subject to a $250 fine for each sale. Proposition 31 on California’s November 2022 statewide ballot seeks to overturn that law, SB 793, so that the sale of flavored tobacco would remain legal in the state. 

Fiscal Impact

“Proposition 31 likely would reduce state tobacco tax revenues by an amount ranging from tens of millions of dollars per year to around $100 million annually,” according to the Legislative Analyst’s Office (LAO).

If a substantial number of smokers quit because of the ban, it could engender some savings to the state’s health care system. On the other hand, the LAO points out that if these smokers quit and live longer, it could increase the government’s health care costs. “Given the possibility of both savings and costs, the resulting long-term net impact on government health care costs is uncertain,” LAO concludes.

Arguments in Favor

Supporters of a ‘yes’ vote to uphold the law passed by the state legislature and signed by the governor include California Gov. Gavin Newsom, Campaign for Tobacco-Free Kids, American Cancer Society Action Network, California Teachers’ Association, and many others.

Proponents of prohibition argue flavors such as menthol in combustible cigarettes, sweet and fruit flavors in e-cigarettes, oral tobacco, and little cigars are targeted to and disproportionately impact young people and minorities.

In the case of menthol cigarettes, supporters of the law observe that around 85 percent of black smokers use a menthol cigarette, compared to a little more than a third of white smokers, with the tobacco industry gearing its marketing of menthol cigarettes toward black Americans. It’s also alleged that menthol cigarettes are especially appealing to young people because menthol acts as a cooling agent masking the harsh taste of burnt tobacco allowing new smokers to become hooked easier than they would if they tried a regular cigarette.

Regarding flavored e-cigarettes, the sweet flavors and fruit e-liquids are claimed to be responsible for the upswing in youth vaping that California and the rest of the country experienced beginning in 2017. Supporters of prohibition argue these flavors are hooking a new generation of kids on nicotine. Banning flavors, proponents claim, would help reduce the number of young people trying tobacco products and cause a substantial portion of adult smokers and vapers to quit nicotine for good.  

Arguments Opposed

The groups arguing for a ‘no’ vote on Prop. 31 include companies in the tobacco industry, the Howard Jarvis Taxpayers Association, and the Republican Party of California.

Opponents of the bans argue that the increase in the tobacco age to 21 in 2020 has already substantially reduced youth access to tobacco products. While the desire to protect youth may be well-intentioned, opponents say the laws would primarily affect adult tobacco users who enjoy flavors and argue that adults should have the right to choose whether to use these products just like with alcohol and marijuana.

They also say there is an unfairness to the legislation since hookah, pipe tobacco, and premium cigars are exempted.

The opponents warn that prohibition would have a negative financial impact on small businesses operating on tight margins. The ban would transfer flavored tobacco sales to the black market, which would mean not just a loss of tax revenue for California.

A ban would also entail criminal enforcement, which brings with it the possibility of increased targeting of minorities by law enforcement, opponents note. The ban on flavored e-cigarettes is also problematic from a health care standpoint because e-cigarettes are safer than combustible cigarettes and limiting access to these products could cause many vapers to relapse to smoking and prevent some smokers who would otherwise have switched from doing so, limiting tobacco harm reduction. 

Discussion

The claims made against menthol cigarettes in California mirror the arguments that were made to the Massachusetts legislature when it was considering a ban on flavored tobacco in 2019. To date, Massachusetts is the only state in the country to have implemented a comprehensive flavored tobacco ban.

According to a pre-print (not yet peer-reviewed) analysis by Reason Foundation Policy Analyst Jacob Rich, one year after the ban, menthol sales within Massachusetts did decline dramatically. But the sales of non-menthol cigarettes within Massachusetts increased substantially. There was also a dramatic rise in cigarette sales in the states bordering Massachusetts. The entire six-state region near Massachusetts reported a net increase in cigarette sales of 7.21 million packs compared to the year before the state ban came into effect. According to the Tax Foundation, the ban also cost Massachusetts $125 million in tax revenue in its first year.

When adult products are relegated to the illegal market consumers often respond by seeking out these products or substitutes on the black market, presenting opportunities for criminals to supply these goods as we’ve seen with alcohol and illegal drugs and sex work.

Supporters of a ‘yes’ vote on Prop. 31 are correct that black smokers, young people and adults, disproportionately use menthol cigarettes. But this obscures some important facts. According to the most recent data from the Youth Risk Behavior Surveillance System in 2017, California’s black youth have the lowest smoking rates of any group, while black adults have the highest. If menthol cigarettes are as appealing to youth as has been suggested it is unclear why youth who are most exposed to menthol have the lowest smoking rates. The data is however in accordance with a Reason Foundation study published in 2020 showing that states with higher menthol sales, such as California, have some of the lowest youth smoking rates in the country. According to the Centers for Disease Control and Prevention (CDC) most of the young people who do smoke, 61 percent, use nonmenthol cigarettes. While we do not have recent data for youth smoking rates in California, nationally, they’re at a record low of 1.5 percent. Considering California’s smoking rate historically underperforms the national average we should expect the state’s smoking rate to be even lower. 

While the ban purports to target only retailers, the reality is that prohibition creates a significant potential for menthol cigarette smuggling and black market activity. Given that menthol products are disproportionately popular among black smokers it’s reasonable to assume black communities could suffer from further unnecessary contact with law enforcement if menthols are banned. The American Civil Liberties Union (ACLU) and law enforcement organizations such as the National Organization of Black Law Enforcement Executives (NOBLE) are among the groups that have voiced concerns as it relates to a proposed national menthol ban by the Food and Drug Administration. Similar concerns would exist in California.

The other major target of the flavored tobacco ban is e-cigarettes. As the use of vaping products by young people rose from 2017 to 2019, it’s unsurprising that some legislators saw prohibition as an easy answer to the problem. But it is important to note that e-cigarettes are a much safer form of nicotine consumption than traditional combustible cigarettes and have helped many Americans quit smoking. Because e-cigarettes heat a liquid solution containing nicotine instead of burning tobacco the number and levels of harmful and potentially chemicals are substantially reduced.

The Royal College of Physicians reports that the risks of vaping are unlikely to exceed five percent of those of smoking. There’s also a growing body of evidence showing that e-cigarettes are more effective than traditional nicotine replacement therapies at helping smokers quit. While e-cigarette flavors are portrayed as being targeted at youth, most adult vapers trying to quit smoking use non-tobacco flavors. According to research conducted by Yale University’s Abigail Friedman, vapers using non-tobacco flavors are more likely to successfully quit smoking than those who don’t.

Banning e-cigarette flavors may have the unintended consequence of not just damaging the state’s vape stores, but could push some vapers back to smoking cigarettes. It could also reduce the number of smokers looking to transition to a safer alternative to cigarettes.

While there is limited evidence on the effects of e-cigarette flavor bans thus far, a recent study published in the journal Nicotine and Tobacco Research examining seven California cities that implemented flavored tobacco bans found no significant effect on the likelihood that youth would vape.  An earlier study published in 2018 concluded that a comprehensive tobacco flavor ban would reduce overall tobacco use, but there would be more cigarette smoking than the status quo. Fortunately, youth vaping has fallen by 60 percent since 2019, despite there being no federal prohibition of e-cigarette flavors. 

California’s voters have to decide whether banning flavored tobacco products is likely to achieve the intended public health benefits at minimal cost to taxpayers and social justice, or whether a path of using e-cigarettes and flavors as a harm reduction tool to reduce smoking in a regulated market can achieve similar outcomes without the unintended negative consequences we’ve witnessed with previous experiments in prohibition.

Voters’ guides for other propositions on California’s 2022 ballot.

The post California Proposition 31 (2022): Banning flavored tobacco products appeared first on Reason Foundation.

Fiscal Impact

According to the Colorado Secretary of State’s analysis, Initiative 122 is likely to have no meaningful impact on the state’s net revenue or costs.  

Proponents’ Arguments For

As with another of the alcohol initiatives slated for the 2022 ballot, Initiative 122, is backed by an issue committee called Wine in Grocery Stores. This group is funded primarily by delivery companies like DoorDash and Instacart and is also supported by Safeway and Target. Proponents argue that the measure would modernize alcohol sales in Colorado and improve consumer convenience.

Opponents’ Arguments Against

Opposition to allowing third-party delivery of alcohol has been limited and has come mainly from the committee, Keeping Colorado Local. This group is also opposed to the other two alcohol-related measures on the 2022 ballot, and they portray these measures as a bid from “billion-dollar, out-of-state corporations who want to come in and put the mom-and-pop small business out of business.” They fear that allowing non-liquor stores to offer home delivery will further harm the ability of liquor stores to compete in the market.

Discussion

With memories of COVID-19 lockdowns still fresh in voters’ minds, it may be tough to convince them that there are many downsides to allowing the home delivery of alcohol. During those lockdowns, Colorado was among the many states to temporarily liberalize alcohol laws, allowing bars and restaurants to sell alcohol to-go and deliver alcohol along with customers’ food orders; a measure the state legislature recently extended to July 2026.

Instead of using their own staff to make home deliveries, Initiative 122 would simply allow businesses already licensed to sell retail alcohol to do through third-party delivery services. While specific regulation of alcohol delivery differs by state, at least 15 states and Washington, DC, currently allow some form of home alcohol delivery through third-party services, like Instacart and Drizly.

In addition to the benefits to consumers, access to these specialized services could benefit grocery stores, particularly smaller ones that may not have their own fleet of delivery people. This is especially true if voters approve Initiative 121, also on Colorado’s 2022 ballot, which would allow grocers to sell wine in addition to beer.

Initiative 122 could also benefit small liquor stores, as well, who might be able to increase their capacity for deliveries throughout the state.

Finally, the Initiative would certainly be beneficial to residents and visitors to Colorado, particularly those accustomed to the on-demand alcohol delivery available in other states. 

The post Colorado Initiative 122 (2022): Third-party delivery of alcohol beverages appeared first on Reason Foundation.

In 2016, Colorado passed a law that would incrementally phase in grocery store sales of full-strength beer, wine, and liquor, with all stores allowed to sell all alcoholic beverages by 2037. Currently, however, wine can only be purchased in licensed liquor stores. 

Colorado’s Initiative 121 on the November 2022 ballot would allow stores that are already licensed to sell retail beer to begin selling wine for off-premise consumption beginning in 2023. The measure would also allow these shops to submit an application to their local licensing authority in order to conduct wine tastings on-site. 

Fiscal Impact

Based on the analysis provided by the Colorado Secretary of State’s Office, Initiative 121 is not expected to meaningfully increase either state revenue or costs.  

Proponents’ Arguments For

Initiative 121 has been supported by third-party alcohol delivery companies, like DoorDash, and national grocery brands, like Target, organized under the issue committee Wine in Grocery Stores. They argue allowing grocery and convenience stores to sell wine, in addition to beer, would significantly increase convenience for shoppers who would no longer need to visit multiple locations to buy food, beer, and wine.  

Opponents’ Arguments Against

Local liquor shops, which lost their monopoly on retail sales of full-strength beer in 2016, claim that eliminating their monopoly on wine sales would cause up to 1,000 liquor stores around the state to close. As they argued prior to Colorado’s legalizing the sale of full-strength beer in grocery stores, opponents of the initiative claim that allowing grocery stores to sell wine would harm local wineries and favor large national brands. Others have raised concerns that allowing wine sales in local grocery stores might increase underage drinking. 

Discussion

Colorado’s experience with the legalization of the sale of full-strength beer in grocery stores has been largely positive. Though the move decreased liquor store beer sales volume, a 2020 study by the Research Institute at Colorado State University found that craft brewers benefited from the move, which stimulated interest in and demand for beer relative to other alcoholic beverages. Moreover, there is no evidence that allowing beer sales in grocery stores have had any meaningful effect on underage drinking.

Local liquor store owners’ fears are understandable. Removing their monopoly and allowing other shops to sell wine would potentially decrease their own sales. But, importantly, it would also significantly increase consumers’ choices and convenience, reducing the number of locations shoppers have to visit, and likely reducing the prices of the more popular brands due to increased competition. If this initiative passes and is enacted, liquor stores could respond in a variety of ways, including by competing with grocery stores by offering customers more knowledgeable staff to assist shoppers and by stocking the hyper-local and specialty brands their larger competitors may not offer.

The post Colorado Initiative 121 (2022): Sales of wine in grocery stores appeared first on Reason Foundation.

Colorado Initiative 96 on the November 2022 ballot would incrementally raise the number of retail liquor store licenses an individual may own or hold to be equal to the number of licenses for off-premise alcohol sales that could be owned or held by drug and grocery stores in the state.

Under Colorado’s current law, an individual may hold only three retail liquor store licenses across the state, increasing to a maximum of four after 2027. Liquor-licensed drug stores, on the other hand, can hold up to eight licenses, but that number will increase to 13 in 2027, 20 by 2032, and be unlimited after 2037.

Grocery stores, which are currently restricted to selling beer only, can have a maximum of 20 licenses for alcohol sales, until 2037 when the maximum number will be unlimited.

Initiative 96 seeks to create parity in licensing between businesses that sell alcohol. If approved, the measure would allow liquor stores to hold up to eight licenses immediately, rising to 13 in 2027, 20 in 2032, and an unlimited number after 2037.

Fiscal Impact

According to the Colorado Secretary of State, Initiative 96 is expected to only minimally impact state finances. Increased licenses would slightly increase revenue through application and renewal fees, as well as slightly increase compliance costs for the state.

Proponents’ Arguments in Favor

Proponents of Initiative 96 argue that the state’s archaic restrictions on liquor licenses have unfairly blocked large liquor store retailers from the state, denying Coloradans the convenience, choices, and prices such chains could offer.

They also argue that increasing the maximum number of licenses and locations would help local liquor stores better compete with grocery and drug store alcohol sales, particularly if voters approve Colorado Initiative 121, also on the 2022 ballot, which would allow non-liquor stores to sell wine, in addition to beer.

The committee backing the measure, the Coloradans for Consumer Choice and Retail Fairness, has been largely funded by David and Robert Trone, the founders of Total Wine and More, raising $2.2 million for the Initiative, most of which was spent collecting signatures to qualify for the ballot. 

Opponents Arguments Against

Opposition to Initiative 96 has come primarily from the Colorado Licensed Beverage Association, a trade group representing independent liquor stores in the state, which formed a committee group named Keeping Colorado Local. This group is opposed to all three of the alcohol measures on Colorado’s 2022 ballot. They oppose Initiative 96 because it would open the state’s doors to large national chain brands, like Total Wine, potentially making it harder for local liquor stores to compete. 

Discussion

The competition faced by local liquor shops in Colorado is going to increase in the near future, no matter what voters decide this November, with current law set to vastly increase the number of chain grocery and liquor stores selling alcohol.

Though small liquor store owners are understandably worried about opening the state’s doors to larger, nationally-recognized retailers, like Total Wine, the smaller stores could find underserved markets and compete in areas like customer service, such as offering more knowledgeable employees to assist customers and stocking products larger chains may not. The iniative would also likely benefit consumers, increasing the variety of products available and reducing prices due to the increased competition.

The post Colorado Initiative 96 (2022): Concerning liquor licenses appeared first on Reason Foundation.

The FDA’s plans amount to a course incorrection of sorts. And, once again, protectionist regulations pushed by many of the world’s biggest food producers—food standards of identity (SOIs)—are largely to blame.

Government-mandated SOIs establish specific rules under which a number of foods may be labeled using a given name. These standards were first introduced before World War II, I explain in my book Biting the Hands that Feed Us: How Fewer, Smarter Laws Would Make Our Food System More Sustainable, ostensibly to establish uniformity, boost consumer confidence, and prevent fraud in food production and sales.

Today, between the United States Department of Agriculture and FDA, hundreds of federal food standards of identity exist. For example, the USDA’s food standard of identity for hot dogs states that the tubular-shaped meat food must contain “raw skeletal muscle meat,” may (but need not) contain “poultry skin,” and may not contain more than 30 percent fat.

Though the goals of SOIs may seem laudable in theory, what they have done instead in practice is to obfuscate and confuse consumers and to offer them fewer choices while protecting large, powerful, incumbent industry players.

“Standards of identity often make the foods consumers buy subject to politicized meanings proffered by food industry lobbyists and regulators,” I explained last year. “That’s because they are typically established with the input of the biggest players in an industry to protect those members of that industry from smaller upstarts. Protectionism is a lousy basis for any law—but particularly one that rewrites the dictionary while restricting the First Amendment rights of food manufacturers.”

That’s exactly what’s happening here. Powerful dairy interests are pushing the FDA to limit their competition by forcing the government to redefine common words. That’s not just Orwellian and wrong, it violates the Constitution.

“The FDA knows it is unconstitutional to ban terms such as ‘coconut milk,’ ‘almond milk,’ and ‘oat milk,” wrote Justin Pearson, an attorney with the Institute for Justice, in an op-ed last month. “But because large and powerful groups have asked for the ban, the FDA is planning to impose it anyway.”

Pearson knows of what he speaks. In fact, he’s the first attorney ever to win a First Amendment lawsuit against a government entity over a food standard of identity. That victory in federal court involved an all-natural Florida creamery that refused to add synthetic vitamins to its skim milk, which violated the state’s SOI for skim milk. I worked with Pearson and served as the creamery’s expert witness in that case.

Pearson argues correctly the FDA “knows” its proposed actions are unconstitutional, pointing to the agency’s own words on the topic in the wake of the Florida skim-milk case. So why has the agency changed course?

“[P]owerful dairy groups like the National Milk Producers Federation have attempted to use their considerable clout… to compel the FDA ‘to bar foods such as almond milk, soy milk, and other plant-based drinks from using the term ‘milk’ to describe their non-dairy milk,” I wrote in a 2017 Reason.com column.

As I also teased at the time, should the FDA really decide to take a hard look at whom may use the term “milk” to describe their milk, the cow-milk lobby might not like what the agency finds. After all, why should regulations insist the unmodified term “milk” may only refer to cow’s milk?

Consider first the relevant dictionary definitions of “milk,” which include both “milk from an animal and especially a cow used as food by people” (which could refer to cow, goat, camel, or other animal-derived milks) and “a food product produced from seeds or fruit that resembles and is used similarly to cow’s milk” (which could refer to hemp, coconut, or other plant-based milks). Consider, too, that Americans drink many kinds of animal- and plant-based milks—from cow to goat to almond to coconut, hemp, rice, and soy—and so no one “milk” means “milk” to every consumer.

Given those facts, perhaps instead of prohibiting plant-based milk producers from using an accurate modifier alongside the word “milk” (e.g., ‘almond milk’) to describe their milks honestly, I’ve posited, couldn’t the FDA instead require cow-milk producers to modify their use of the term “milk” with the word “cow,” making that use consistent with every other use of the term (i.e., “goat milk,” “camel milk,” and “soy milk”)?

In 2018, a powerful dairy lobby, the National Milk Producers Federation, told the FDA it would soon “call[] for prompt enforcement actions against misbranded plant-based dairy imitators, as well as for the FDA to amend its regulations to codify its longstanding and well-tailored food labeling policies.”

Despite knowing such actions would be unconstitutional and amount to nothing more than shamelessly protecting powerful dairy interests at the expense of competitors and consumers, the FDA appears it will attempt to do—and no doubt be sued for—just that.

The post FDA targeting First Amendment rights of non-dairy milk sellers appeared first on Reason Foundation.

• Removing 95 percent or more of the nicotine from cigarettes.
• Slashing the number of retailers that can sell tobacco by 90-to-95 percent.
• Criminalizing the sale of tobacco to people born in 2009 or later.

While yet to be passed into law, the New Zealand policy is under consultation and will no doubt be the subject of intense discussion among stakeholders, policymakers, and the general public. 

The plan’s call to reduce the amount of nicotine in cigarettes by more than 95 percent is not a simple product reformulation—it amounts to a prohibition on cigarettes in New Zealand. The New Zealand government’s hope is that drastically reducing nicotine in cigarettes will prevent young people from starting to smoke and encourage a large slice of current adult smokers to quit nicotine or switch to safer alternatives like e-cigarettes. 

Some evidence from small trials suggests smokers are more likely to quit smoking or reduce their cigarette intake when using very low-nicotine cigarettes. However, one of the most prominent trials published in the New England Journal of Medicine in 2015 showed that more than 70 percent of those assigned to use low-nicotine cigarettes broke the rules and smoked regular cigarettes during the study period. 

Some of these studies on reducing the amount of nicotine in cigarettes found that vulnerable populations, like individuals with psychiatric or mood disorders, those suffering from opioid use disorders, and low-income women showed no difference in quit rates when compared to regular smokers. 

Speaking to The New York Times in reference to a similar proposal to reduce the amount of nicotine in cigarettes in the United States, Lynn T. Kozlowski, a tobacco control expert from the University at Buffalo, urged caution:

Lynn T. Kozlowski, a tobacco researcher at the University at Buffalo who has contributed to four Surgeon General reports on smoking since 1981, said nicotine was a highly addictive drug, with a stranglehold on users that could rival cocaine and heroin, and that the F.D.A. needed to consider how a sweeping decrease of nicotine in cigarettes would affect smoker behavior.

“What scares me is a national experiment with the very low nicotine cigarette that is done without some testing in the real world,” he said. The studies many experts cite when promoting a 95 percent drop in nicotine levels relied upon paid participants, he noted, adding that some of them secretly smoked their own brands at the same time that researchers were plying them with low-nicotine cigarettes.

When it comes to New Zealand’s plan to restrict the number of retail outlets that can sell cigarettes, the only country New Zealand can point to with a comparable policy is Hungary. In 2013, Hungary cut the number of outlets in the country allowed to sell tobacco by 83 percent. A 2020 study published in Tobacco Control examining tobacco retail licensing systems in Europe found there is “little empirical evidence for the effect of tobacco licensing on smoking behaviors.” And, as of 2019, Hungary’s smoking rate, 19.3 percent, remained above the European Union average of 18.4. 

The untested interventions being pursued in New Zealand also risk severe unintended consequences, many of which will fall most heavily on the country’s indigenous Māori population. Māori smoking rates are elevated compared to the rest of New Zealand’s population. It is a pattern not unique to New Zealand. Groups with fewer educational opportunities and lower incomes are far more likely to smoke. This is important because one of the main goals and arguments for the current tobacco control plan is to narrow health inequities within New Zealand’s population. 

Of course, with prohibition, there will be a huge incentive for smugglers to import cigarettes into the country, already a major problem when it comes to evading tobacco tax. There will also be an incentive for entrepreneurs to find ways to add nicotine to cigarettes. Because Māori have higher smoking rates, we can reasonably expect much of the illicit market activity related to cigarettes to be concentrated in Māori communities. 

The government will have to answer some tough questions if these policies are to come into effect. For example, what will the criminal penalties be for the sale or trade of these cigarettes? Will the possession of any or large amounts of full nicotine cigarettes be criminalized? 

Criminalizing the conventional tobacco market will likely increase the already substantial inequities in New Zealand’s criminal justice system. New Zealand’s incarceration rate, 170 per 100,000, is well above the Organization for Economic Co-operation and Development average of 147.

Māori are 5.7 times more likely to have a police interaction than other New Zealanders. Though Māori account for just 16 percent of the country’s population, they make up 51 percent of New Zealand’s prisoners. Māori are also more likely to be handcuffed, pepper sprayed, arrested, convicted, sentenced, and imprisoned, according to a 2017 report from the New Zealand police.

The government’s regulatory impact statement concedes that it does not “consider compliance and enforcement, including any offenses and penalties.” Fortunately, New Zealand has begun to accommodate safer nicotine alternatives like e-cigarettes, which have helped many New Zealanders quit smoking. 

Instead of launching a new experiment in prohibition, New Zealand should inform cigarette smokers about the potential health benefits of switching to safer alternatives and ensure greater Māori access to smoking cessation services.

The post The potential consequences of New Zealand’s plan to be smoke-free appeared first on Reason Foundation.

Based on its own number crunching, the FDA claims the move will save around half a million lives over the next 40 years and reduce health disparities. Supporters of the ban argue that this can be accomplished without triggering the devastating consequences caused by every other drug prohibition in history. The problem, however, is that the FDA’s math is wrong. For millions of adults, communities around the nation, and public health at large, this could prove a deadly miscalculation. 

Like all federal agencies, the FDA is required to provide some justification for major rules, showing why it expects the benefits of that rule to outweigh its costs to society. In the case of banning menthol cigarettes, that justification centers primarily on the lives it is expected to save, which the FDA estimates at between 324,000 to 654,000 by the year 2060. To come up with that number, the agency relied on a series of studies that used predictive modeling to guess how menthol cigarette smokers, now and in the future, might behave in the wake of such a ban.  

These models predict that, while around 56 percent of current and future menthol smokers would respond in ways that do not improve health (such as switching to equally-harmful non-menthol cigarettes or relying on illicit markets), a significant portion—45 percent—would alter their behavior in ways that promote better health. According to these models, however, nearly half of the public health benefits would come from smokers switching to mentholated versions of lower-risk nicotine products, like e-cigarettes. The issue with this in the real world is that smokers may not have that option thanks to the FDA’s own irrational policies. 

Nicotine, though a habit-forming substance, is not what makes smoking dangerous. The danger comes from combustion; the chemicals created by burning tobacco and paper. Despite nearly all evidence indicating that non-combustible sources of nicotine, like e-cigarettes, are safe and effective substitutes for smoking, the FDA continues to do everything in its power (and arguably beyond it) to eliminate the e-cigarette market. Only a handful of options have been approved for sale and the FDA has refused to approve any in menthol flavor (indicating it never will). Smokers already have limited access to any sort of FDA-sanctioned e-cigarette, let alone the type and flavor they might find an acceptable replacement for their cigarettes. As the FDA continues to pull e-cigarettes off the market, including the most popular and effective brands, and as cities and states implement their own e-cigarette bans, issues with limited access will grow. 

If nearly half of the public health benefits the FDA expects from a menthol cigarette ban come from the expectation that many smokers will switch to e-cigarettes, what will happen when the agency’s own policies prevent this from happening? It is possible that more smokers will choose to quit tobacco and nicotine use altogether, making a menthol cigarette ban even more beneficial for public health than the FDA currently predicts. But, evidence suggests smokers will instead choose to switch to non-menthol cigarettes, gaining zero health benefits, or turn to illicit markets, where their risks might actually be increased.

To make matters worse, the FDA’s math also suffers from incorrect assumptions about how illicit markets would respond to a menthol cigarette ban. Though menthol cigarettes make up over a third of all cigarette sales, generate more than $21 billion in revenue, and are used by an estimated 19 million Americans, the FDA claims a ban won’t lead to increases in illicit cigarette sales. But this is yet another miscalculation. 

The already-booming illegal cigarette market in America has traditionally operated via domestic bootlegging, with primarily “mom and pop” enterprises legally purchasing cigarettes in low-tax jurisdictions, such as Virginia, and selling them in high-tax jurisdictions, like New York. Since the scheme involves a product that is legal everywhere in the country, the risks illicit operators face for this sort of smuggling are relatively low. For the same reason, the potential profits smugglers can make are also relatively low, since illicit cigarette dealers must keep the prices they charge for smuggled cigarettes lower than what their customers would pay for legal cigarettes where they live. Because a nationwide ban on menthol cigarettes would prevent would-be menthol cigarette dealers from simply hopping state lines to supply their trade, the FDA assumes they would not even bother. But this is a dangerous underestimation of the resourcefulness of illicit supply chains. 

A national prohibition, whether for menthol cigarettes or anything else, certainly increases the risks for those hoping to profit by selling illicit goods. But, it also vastly increases the rewards for those who do so successfully. Unlike the current market for illicit tobacco which hinges on offering customers cheaper cigarettes, a national prohibition would make illicit sources the only option for menthol smokers. As such, those customers might be willing to pay as much or even more for illicitly supplied menthols as they would have paid when they were legal. By increasing both the demand for and the profitability of illicit menthol cigarettes, a ban may have the unintended effect of attracting international drug cartels into the racket. And given the skill with which these cartels continue to evade authorities, it is not clear why the FDA thinks a cigarette ban would be more successful than any other drug prohibition.

Even if U.S. authorities could stop the flow of illicit cigarettes over our national borders, there is little they could do to stop domestic producers from supplying the market with counterfeit menthols. This task would involve little more than purchasing still-legal non-menthol cigarettes and adding menthol flavoring. The government could do even less about individuals who might make their own supply of menthol cigarettes the same way. 

Far from making menthol cigarettes unavailable, as the FDA assumes, a menthol ban could have the perverse effect of making them far more available, particularly for minors, since illegal dealers aren’t exactly sticklers for age verification. Even more perversely, the ban could harm the very group—people of color—it supposedly seeks to help most. 

While there is no credible evidence that menthol cigarettes are more toxic, harder to quit, or more attractive to youth than non-menthol cigarettes, it is true that they are overwhelmingly preferred by people of color with around 85 percent of black smokers choosing menthols compared to just 30 percent of white smokers. The FDA claims this means that black people would benefit most from a menthol cigarette ban since they will be more motivated to quit smoking. But, it also means that many of the smokers who do not quit and instead turn to illicit markets to get the menthol cigarettes they prefer will be people of color. And, as it is with any drug war, it will be people and communities of color that bear the brunt when local authorities attempt to crack down on illicit activity. 

If the FDA is truly interested in promoting smoking cessation and saving lives, there are more effective and certainly less destructive ways to do this than a prohibition. Another approach would be for the FDA to adopt policies grounded in harm reduction, to encourage smokers who cannot or will not quit using nicotine to switch to less harmful options, such as the already FDA-endorsed (but largely ineffective) nicotine patch, gum, and lozenge, as well as e-cigarettes, snus, and heated tobacco. But, for this to work those products must be at least as accessible, affordable, and palatable to smokers as the cigarettes they are used to. Whether the FDA wants to admit it or not, that means allowing them in flavors smokers want, including menthol. 

In other countries, like the United Kingdom and Japan, tobacco harm reduction has been widely embraced and hugely successful. America has already adopted a similar approach to other substance use issues, such as legalizing cannabis, offering clean needles to people who use intravenous drugs, opioid replacement therapy, and naloxone for overdose prevention. There is no reason that tobacco harm reduction would not be similarly successful if the FDA abandoned its unscientific opposition to nicotine and got out of the way of innovation. Such a harm reduction approach may anger prohibitionists in the anti-tobacco industry and Congress, but unlike the current approach, it might actually save lives. 

The post The FDA’s deadly menthol miscalculation appeared first on Reason Foundation.

Dr. Robert Califf
Commissioner, Food and Drug Administration
10903 New Hampshire Avenue
Silver Spring, MD 20993
RE: Docket No. FDA-2021-N-1349 Tobacco Product Standard for Menthol in Cigarettes

Dear Dr. Califf:

Reason Foundation is grateful for the opportunity to submit comments on the proposed rule to prohibit the use of menthol as a characterizing flavor in cigarettes. Reason Foundation’s nonpartisan public policy research promotes choice, competition, and a dynamic market economy as the foundation for human dignity and progress. Reason produces rigorous, peer-reviewed research and directly engages the policy process, seeking strategies that emphasize cooperation, flexibility, local knowledge, transparency, accountability, and results. 

The available evidence suggests prohibition of menthol cigarettes will not present significant public health benefits to the population as a whole and will produce a suite of negative consequences undermining the FDA’s goals. While studied for decades, the evidence is either conflicted or directly contrary as to whether menthol cigarettes pose greater risks for smoking initiation, progression to regular smoking, increased dependence, and reduced cessation, particularly among African Americans, compared to non-menthol cigarettes. 

The FDA has not sufficiently considered the effectiveness of menthol bans and tobacco prohibitions from other jurisdictions, the severe limitations on and public misperceptions of safer alternatives such as e-cigarettes, or the unintended consequences of possible increased cigarette consumption among those menthol smokers who switch to a non-menthol product.

The FDA has also not accounted for the extremely low levels of youth cigarette use, for which menthol remains the least favored option. Furthermore, such a prohibition will result in a host of unintended consequences, including increased tobacco smuggling, burdens on law enforcement, and more frequent interactions between law enforcement and minority communities. 

To read the full published comment, please click here or here (.pdf).

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