The federal government currently imposes federal excise taxes on cigarettes, cigars, smokeless tobacco, roll-your-own tobacco and pipe tobacco. Will Congress add a tax on the nicotine used in electronic nicotine delivery systems?

That is the aim of H.R. 4742, introduced by Congressman Tom Suozzi (D-N.Y. 3d Dist.) and co-sponsored by Congressman Pete King (R-N.Y. 2d Dist.). As introduced, H.R. 4742 was titled as a bill “to amend the Internal Revenue Code of 1986 to impose a tax on nicotine used in vaping, etc.” Congressman Suozzi said in support, “Increasing the cost of vaping will have a direct correlation to decreasing the usage of vaping products.”

In a joint statement, four federal agencies in consultation with state bank regulators clarified that, as a result of the Agriculture Improvement Act of 2018 (2018 Farm Bill), banks are no longer required to file a Suspicious Activity Report (SAR) on customers “solely because they are engaged in the growth or cultivation of hemp.” The guidance was issued by the Board of Governors of the Federal Reserve Board, the Federal Deposit Insurance Corporation, the Financial Crimes Enforcement Network (FinCEN), and the Office of the Comptroller of the Currency in consultation with the Conference of State Bank Supervisors.

On November 27, Massachusetts Governor Charlie Baker signed An Act Modernizing Tobacco Control into law. The new law restricts the sale of e-cigarettes and nicotine vaping products as well as flavored tobacco products.

Specifically, the law immediately restricts all flavored nicotine vaping products to licensed smoking bars where they may only be consumed on-site. Additionally, the law restricts the sale of all vaping products with a nicotine content over 35 milligrams per milliliter to licensed, adult-only retail tobacco stores and smoking bars.

With recent headlines focusing on tobacco and electronic nicotine delivery systems, it is no surprise that federal and state legislators are turning their attention toward the industry.  Did you know that Troutman Sanders’ lobbyists can help?

On October 16, the Montgomery County Council publicly authorized its lawsuit filed in federal court on October 11, against Juul Labs and Altria Group for alleged violations of Maryland and federal law based on claims of aggressive marketing of e-cigarette products to minors.

Council President Nancy Navarro remarked, “The Council authorizes taking legal action against Juul Labs and Altria Group. This lawsuit supports our ongoing efforts to protect our community members from the public health impacts associated with e-cigarette products and vaping.

Last week, the United States Department of Agriculture (USDA) issued its interim final rule on the establishment of a domestic hemp production program.  It is intended to be effective for two years and then be replaced with a final rule.  The rule outlines provisions for USDA to approve plans submitted by States and Native American tribes for the US domestic production of hemp.

On October 7, 2019, Illinois Congressman Raja Krishnamoorthi introduced the “Ending Nicotine Dependence from Electronic Nicotine Delivery Systems Act of 2019” (or “END ENDS Act”), which was referred to the House Committee on Energy and Commerce. According to the bill, the Act would “amend the Federal Food, Drug, and Cosmetic Act to establish a tobacco product standard prohibiting any e-liquid with a concentration of nicotine higher than 20 milligrams per milliliter” in an attempt to reduce adolescent use of ENDS.

On October 23, 2019, the Appeals Court of Massachusetts upheld the decision (which was the subject of a previous blogpost) of the Superior Court of Massachusetts requiring the lifting of the State’s vapor products ban on October 28th.  The State had filed a motion for stay pending…

On October 21, 2019, the Massachusetts Superior Court for Suffolk County preliminarily enjoined the State – from and after October 28, 2019 – from implementing and enforcing the ban as to “nicotine-vaping products” unless and until the executive branch promulgated the regulation in accordance with Massachusetts due process requirements.  The court allowed the ban to continue with respect to “products containing tetrahydrocannabinol (THC) and any other cannabinoid or to black market products.” 

The Troutman Sanders Tobacco Team will attend a meeting at the Food and Drug Administration Center for Tobacco Products on “Deemed Tobacco Product Applications” October 28-29, 2019.

The meeting is intended to provide information on the agency’s expectations for tobacco product applications, with a particular focus on deemed tobacco products, including electronic nicotine delivery systems, cigars, pipe and waterpipe.