On October 5, 2021, the Food and Drug Administration (“FDA”) published in the Federal Register its Final Rule on the content and format of reports intended to demonstrate the substantial equivalence of a tobacco product (“SE Reports”). The rule originally was displayed in January in the Federal Register, but was quickly retracted by the Biden Administration and did not publish.
IRS Launches Cannabis-Industry Focused Compliance Initiative
It is widely known that trafficking in controlled substances is a crime under federal law. Traffickers and would-be traffickers be warned, however, that if you do choose to make income from trafficking in Schedule I or II controlled substances (including cannabis, cocaine, or psychedelic mushrooms), that income is fully taxable by the U.S. government. And, if you have employees helping you produce and sell federal Schedule I or II controlled substances (as many state-legal cannabis businesses do), you owe federal employment taxes as well.
Massachusetts Supreme Judicial Court Affirms Punitive Damages Award Against Philip Morris USA Inc. In Spite of Master Settlement Agreement Release
On Wednesday, the Massachusetts Supreme Judicial Court upheld a jury’s award of $10 million in punitive damages in a wrongful-death case against Philip Morris USA Inc. (“PM USA”), rejecting the tobacco company’s argument that such relief was precluded by the 1998 master settlement agreement between the Massachusetts Attorney General, PM USA, and other attorneys general and tobacco manufacturers.[1]
Vermont Settles with Online Retailers for Violations of Delivery Sale and Consumer Protection Laws
Vermont Attorney General T.J. Donovan recently announced that his office settled violations of the state’s delivery sale law with three online electronic nicotine delivery system (ENDS) sellers. Since December 2020 and including these most recent settlements, the state has collected $472,500 from 13 companies for such violations, signaling the state’s growing desire to enforce this law against online ENDS sellers.
Bipartisan “Resources to Prevent Youth Vaping Act” Introduced in Senate and House
On Friday, July 23, 2021, the attached bill was introduced by a bipartisan group of lawmakers. In the Senate it was introduced by Sen. Jeanne Shaheen (D-NH), along with Lisa Murkowski (R-AK), Richard Durbin (D-IL), Susan Collins (R-ME), Tammy Baldwin (D-WI) and Mitt Romney (R-UT). The House companion bill was
Tobacco in the 117th Congress
Troutman Pepper Strategies (TPS), a full-service government affairs and issue management arm of Troutman Pepper, regularly communicates with members of Congress and staff, including relevant committee staff, regarding the status of tobacco-related legislation and policy. These relationships include and extend beyond the congressional committees with tobacco jurisdiction, such as the House Energy & Commerce Committee and the Senate HELP Committee. Additionally, TPS communicates with agency officials, including the Food and Drug Administration and the White House, about tobacco-related regulations and policy.
FDA Withdraws Notice of Proposed Rulemaking For Premium Cigars
On June 11, 2021, the U.S. Food and Drug Administration (FDA) withdrew an advanced notice of proposed rulemaking (ANPRM) for premium cigars issued in March 2018 as part of the Spring 2021 Unified Agenda of Regulatory and Deregulatory Actions, which is published twice a year. Nevertheless, FDA commissioned a study to obtain information similar to what it sought in the ANPRM. The study is scheduled to be complete in Spring 2022. Thus, there is still a chance FDA takes a modified approach with respect to premium cigars in the future.
Florida Court Finds Nonresident Tobacco Distributor On the Hook For Excise Taxes Regardless of Physical Presence
In Global Hookah Distribs. v. Florida, No. 1D20-822 (Apr. 12, 2021), a case before the First District Court of Appeal of Florida, Global Hookah Distributors (Global) unsuccessfully sought a refund of tobacco excise taxes it paid to the State of Florida. Global’s argument rested principally on its lack of a substantial “nexus” with the State.
FDA Proposes to Ban Menthol Cigarettes and Characterizing Flavors in Cigars
On April 29, the U.S. Food & Drug Administration (FDA) announced that it will issue proposed tobacco product standards within the next year that will effectively ban menthol cigarettes and characterizing flavors in cigars. Once FDA issues proposed tobacco product standards, it will need to go through the notice and comment rulemaking process (and possibly litigation), so it could take several years before FDA implements any new standards.
Virginia Governor Pushes for Additional Changes to Marijuana Legislation Passed by the General Assembly
In late February, we blogged about legislation passed by the Virginia General Assembly legalizing recreational marijuana. On March 31, 2021, Virginia Governor Ralph Northam submitted a substitute bill to the Senate for consideration. See https://lis.virginia.gov/cgi-bin/legp604.exe?212+sum+SB1406. The General Assembly is scheduled to reconvene Special Session I on April 7th, when it will consider the Governor’s marijuana proposal.