[G]oing into the legislative session, lobbyists representing the major electronic-cigarette brands were keeping their game plan simple.
They would lobby in favor of raising the legal smoking age from 18 to 21, which had become a popular tack taken by the e-cigarette companies to show they were taking youth nicotine addiction seriously, and leave it at that, hoping that lawmakers would not propose other regulatory measures.
What lobbyists were not expecting was that Vermont’s governor, Republican Phil Scott — who has been criticized for being overly sensitive to protecting business interests — would signal during his January budget speech that he supported restricting the budding e-cigarette industry.
“We were fired up,” said Andrew MacLean, a partner at the firm MMR, who lobbies for R.J. Reynolds Tobacco, about Scott’s opposition to the industry.
With the governor on-board with reining in e-cigarette use, Vermont lawmakers introduced proposals to ban online sales to individuals and to levy a 92% tax on the devices and nicotine “pods.”
In response, the tobacco and e-cigarette industry pumped $196,683 into Vermont in the form of lobbying, advertising and other services. A large portion of that money went towards pushing to raise the age on purchasing tobacco, but it also went towards fighting the tax increase.
In the 2018 election running up to the session, R.J. Reynolds Tobacco Co. — which is best known for producing Camel cigarettes but is also the owner of the e-cigarette brand Vuse — along with Altria, the parent company of Philip Morris, that owns 35% share of the popular e-cigarette company Juul, both gave thousands of dollars to Republican committees across the state.
The two tobacco giants contributed about $25,000 worth of donations to GOP organizations in Vermont and the Juul owner also gave Scott the maximum contribution of $4,080 during his reelection run.
The top spenders during the session were Altria — which paid $115,526 — followed by R.J. Reynolds Tobacco which spent $42,656 for representation from the firm MMR.
There was also an e-cigarette trade organization, Vapor Technology Association, which spent $23,500 on the lobbying services of Leonine Public Affairs.
Leonine Public Affairs could not be reached for comment.
Another national organization, DCI Group AZ, which is known for lobbying extensively for the tobacco industry, particularly for Altria, spent $15,000 on lobbying in the state.
Despite the amount of money spent by the tobacco industry, Sen. Michael Sirotkin, D-Chittenden, a member of the Senate’s tax writing committee and a former lobbyist, said based on his experience there was not an unusual amount of interest from tobacco companies compared to other legislative sessions.
“I wouldn’t say that it was disproportionate to other corporate efforts,” Sirotkin said. “It didn’t stand out to me.”
In the governor’s January budget address, he clearly outlined his openness to taxing e-cigarettes as a way to combat growing concern that the devices are causing a spike in nicotine addiction among young people across the country and in Vermont.
“I think you all know it’s not my first instinct to add a tax, but with a growing health risk for our kids, I’m proposing to levy the same tax as we do on tobacco products,” Scott said.
Scott, who during his first term was loath to put forward a tax proposal, cited the U.S. Surgeon General’s December report that expressed the importance of immediately addressing an “epidemic of youth e-cigarette use.”
“Right here in Vermont, use among young people nearly doubled,” Scott said. “And the Surgeon General has declared this an epidemic.”
When tobacco lobbyists heard the governor’s rhetoric, they knew their work would be cut out for them during the five-month legislative session.
But while industry lobbyists were surprised by the governor’s sentiment, lawmakers were not.
“Some of us had a feeling it was coming,” said Rep. George Till, D-Jericho, a lead sponsor of the bills to ban online sales and to increase the tax on e-cigarettes.
Till said the warning from the Surgeon General was a big reason for the governor’s support for e-cigarette regulation.
“You had this huge red flag that this was danger coming,” Till said. “Our health commissioner (Mark Levine), who was very strong on this stuff, really I think got the governor’s ear too.”
E-cigarette lobbying in Vermont in 2019
Chart by Felippe Rodrigues/VTDigger.org
Both Altria and Reynolds supported the bill to raise the age to buy tobacco from 18 to 21 in part to head off efforts to impose stricter regulations or taxes.
Altria, which bought a portion of Juul for $12.8 billion in 2018, even went as far as to take out full page advertisements in the Burlington Free Press advocating for the proposal.
This has been part of Juul’s nationwide campaign to lobby state lawmakers to raise the smoking age to 21, or 19 in some states — dubbed Tobacco 21 legislation.
Altria, who is represented in Vermont by William Shouldice & Associates, as well as its own lobbyist, declined to comment.
On May 17, when Scott signed that bill, S.86, into law, Kevin Burns, the chief executive officer of Juul, released a statement thanking the governor and the Vermont lawmakers for raising the purchasing age for nicotine products. At the time, Vermont became the eighth state to adopt the proposal.
“We won’t succeed in providing the world’s one billion adult smokers with a true alternative to combustible cigarettes, the number one cause of preventable death in this country, if youth-use continues unabated,” Burns said.
“That is why we are committed to working with lawmakers to enact these effective policies and hope more jurisdictions follow in Vermont’s example,” he added.
As of the end of June, the legislation had been enacted by 16 states.
Scott had signed H.26, the ban on online sales to all but wholesalers, the day before and one week later he would go on to sign H.47, the tax increase proposal.
According to MacLean, all the tobacco entities supported raising the age to purchase tobacco to 21 because it has become popular in many states — including New York and California.
MacLean said Reynolds even proposed increasing the penalties for youth tobacco possession in Vermont, to further crack down on underage use. Vermont’s lawmakers decided against that amendment, MaClean added.
“That was rejected by the House, it’s kind of weird,” MacLean said. “Anything that makes youth usage less likely, we’re in favor of.”
For Reynolds and Altria, the legislative priority was to address youth usage, but to leave it at that.
From Reynolds perspective, the 92% tax was an additional measure to discourage youth use, but if the legal age to buy tobacco was already increased from 18 to 21, the company argued the tax would do nothing but penalize adults choosing to use e-cigarettes instead of traditional tobacco.
There was also concern that the tax coupled with the ban on online sales to individuals would unfairly hurt business.
“That’s one of the reasons why we supported it, Tobacco 21, because you don’t find too many 21-year-old seniors in high school,” MaClean said. “So we thought if the issue is youth, well alright just make the age 21.”
However, lawmakers saw the Tobacco 21 bill as one part of the three-piece package of legislation aimed at reining in e-cigarette use.
Rep. Jessica Brumsted, D-Shelburne, a fervent supporter of all three proposals, said she always believed the three pieces of legislation would work in tandem to fully address the public health concerns with youth nicotine addiction.
“It’s a three-pronged attack,” Brumsted said. “It was kind of nice that we [in the legislature] all felt the same way about this.”
Sen. Chris Pearson, P/D-Chittenden, another member of the Senate’s tax panel, said the tobacco industry wanted e-cigarettes to be marketed as both a healthier alternative to traditional cigarettes and also as an adult nicotine replacement therapy — similar to nicotine gum.
“It’s kind of hilarious to see them want it both ways on these issues and ultimately, if it is a recreational tobacco product why wouldn’t we treat it the same,” Pearson said.
“I haven’t dealt with cigarette and tobacco issues before, but for the poster child for lobbyists, they were pretty uncompelling,” he added.
Though it was clear the tobacco industry opposed the high tax rate, Pearson, like Sirotkin, did not feel that it was an all out effort to push back on the proposals.
But he added that he and other lawmakers did receive letters from constituents that all had the same message to oppose the tax.
“So you know it was from industry,” Pearson said.
With all three proposals signed into law in May, lawmakers said they hope these measures will address the problem of nicotine addiction, and that there won’t be a need to take up additional e-cigarette legislation in the future.
“If you had missed on any of the three proposals it would have left an opening, especially for young people to access vaping devices,” Sirotkin said.
“I think we did a thorough job and I hope it works. There is a history of the tobacco industry where they always find a way to get their products to their targets,” he added.
