How are the states logically banning products that have nothing to do with the epidemic it’s currently facing? “But ill_be_ya_doug, kids are still getting their hands on closed pod systems (Juul) and they’re getting sick !”
You’re right. They are, but its not really Juuls fault. Juul made a safer alternative to cigarettes more readily available to adults in a more easily accessible place. Illicit THC cartridges are to blame, but we will get there in a second.
When you were in high school, where were you able to get away with purchasing alcohol or cigarettes under age? Gas Station / Convenience stores. You know, that one gas station in that shoddy part of town that doesn’t ID you. Why would they not want to ID you? Because they would pull in less revenue if they did.
Now, sit back and think what percentage of stores / clerks do not ID. I can think of 3 stores in my home town that never would ask for our ID. What did we do most weekends? Drink, smoke cigarettes, and even a little marijuana here and there. Crazy, I know. No matter what generation it is, high school kids will find a way to abuse something. Think back to it, what did you do in high school?
“Okay. That makes sense, but what is putting all these poor people in the hospital?”
Illicit THC cartridges. More specifically, the Vitamin E Acetate found in these illicit cartridges is to blame.
“I understand, so, why are states banning flavored eliquids?”
Founder and CEO of an eliquid company, states it best. If you are not able to hear the interview, I’ll break it down into two parts.
- What is the solution to the youth vaping epidemic?
Age-controlled stores, raising the age from 18 to 21 nation-wide, and a better system of accountability for these age-controlled stores. Sounds pricy to the average retailer, but it is dramatically better than an out-right ban.
Retailers would rather invest in new regulations than to lose their stock. The average retailer (that I’ve talked to) will buy products (eliquid) for $6-8 on a small scale (i.e. under 1,000 units) to $5 and under, the higher the quantity.
For this example, we will say the average quantity purchased per flavor is 10. 160 flavors = 1600 units purchased at a blended average of $6.75 = $10,800. The average retail for e-liquid is $19.99 (even pricier in some areas) giving it a retail value of $31,984. That’s a lot for a business to lose and that’s just the liquid.
- Whats a tobacco bond? Pulled from wikipedia directly .
In finance, a tobacco bond is a type of US bond) issued by a state to obtain immediate cash backed up with a won lawsuit against a tobacco company. The typical tobacco bond lasts 30 years or less and pays interest every year.
By 2014, tobacco bonds made up $94 billion of the $3.7 trillion municipal bond market. They share a revenue stream from the Tobacco Master Settlement Agreement, a 1998 national settlement in which Philip Morris, Lorillardand Reynolds American agreed to make annual payments to states in perpetuity to resolve liabilities for health-care costs related to smoking. Some states — Alaska, California, Iowa, Michigan, New Jersey, New York, Ohio, Rhode Island, West Virginia, as well as Washington, D.C., Puerto Rico and Guam — borrowed against the funds, which are based on cigarette shipments
Which states of out-right banned flavored eliquid? Michigan, New York, Washington, Massachusetts, and Rhode Island. Some states are still in talks about raising restrictions, bans or taxes, i.e. Oregon, Ohio, New Jersey, California, and so on.
Literally, just google “(your state) vape ban) to see what is happening.
Now that we are passed that, how exactly do the states benefit from the bonds?
What are tobacco bonds and why are they part of the US municipal market?
Municipal tobacco bonds were issued shortly after 52 US states and territories (the “Settling States”) entered into a Master Settlement Agreement (“MSA”) with tobacco manufacturing companies in November 1998.2 Under the MSA, the Settling States agreed to give up all future legal claims against the tobacco manufacturing companies for the recovery of tobacco-related healthcare costs. In return, the Participating Manufacturers (PMs) agreed to make annual payments in perpetuity to the Settling States, with each state receiving a fixed percentage of the total annual payments. The amount of the annual payment is dependent on a variety of factors, most importantly inflation and national tobacco consumption.
“most importantly inflation and national tobacco consumption”
Why do they need the tobacco consumption to grow? People have stopped smoking and have turned to a 95% safer alternative, also known as vaping flavor eliquids.
Whether you vape, or not, vaping has been around for over a decade (flavor eliquids speicifically) and has not caused any (reported) illness in that time frame.