COLORADO SPRINGS — One day after Colorado Attorney General Phil Wieser announced a lawsuit against vaping manufacturing giant Juul, Governor Jared Polis signed a bill that will ask voters to raise taxes on tobacco products and create a tax on nicotine products.
“A tax on tobacco has proven to be one of the most effective means of decreasing rates of smoking,” said Dr. Ted Maynard, a retired pediatrician who is now the president of the Colorado chapter of the American Academy of Pediatrics.
Maynard explains the logic holds true for vaping as well and is more effective for minors and lower-income people and the fact Colorado only has a sales tax applied to nicotine products is one of the reasons the state has been dubbed “Teen Vaping Capitol” of the country.
If voters approve it in November, it will create a tax on nicotine products at 50 percent through July 2024, then increases to 56 percent until July 2027 where it will stay at 62 percent of a manufacturer’s list price.
For cigarettes, it increases the tax on a single cigarette from 1 cent to 6.5 cents until July 2024, then 8 cents until July 2027, where it will then remain at 10 cents. It would also create a $7 minimum price for a pack of cigarettes and $70 for a carton, with those prices increasing to $7.50 and $75 in July 2024.
“The most cited study suggests kids are four times more likely a year later if they are vaping and the latest study just published about a week ago shows six times the chance of progressing to cigarettes,” Maynard said.
Maynard says, the recent study researched 17,000 youth.
Small vaping businesses, many represented by the Rocky Mountain Smoke-Free Alliance, believe the tax is too much.
“We agree with a tax that is reasonable but we weren’t invited to the negotiation table,” said Joshua Sprague, the owner of Absolute Vapor, which as two locations in Colorado Springs.
Sprague added that based on conversations he has had with other store owners like his, Altia, the parent company of Juul was invited to discuss the bill, but businesses like his were not.
He independently makes his products, even offering customers to see the process of how its done, and doesn’t have the financial resources of a corporately backed business who can weather the increase.
“We feel like gas stations are going to be the ones who will prevail in all of this because their products are already a lot cheaper. Some of these little devices are only a dollar,” Sprague said.
If passed, the state estimates the tax would bring in around $167 million in the first full year it would be collected. 73 percent would fund preschool seats, a priority of Polis’, and the rest would go into the state’s general fund budget.
For his opposition to the tax, Sprague says he fully supports the Attorney General’s lawsuit as his store scans every ID they get to ensure they don’t sell to anyone under 21. Seeing claims of Juul targeting minors with ads Wieser says lie about the safety of the chemicals the company uses,
“Those types of practices really put a bad image on our industry,” Sprague said.
Maynard says, it’s part of the brand for Juul. They immediately advertised on social media when they began marketing campaigns, pushing towards kids. He also points to the “nicotine salt” that makes the vapor from the devices less harsh. He says that leads to Juul pumping 10 to 20 times of addictive nicotine into the products.
He points to adolescents being more more prone to developing addictions as an insight into the companies desires.
“That’s what the lawsuit the Colorado Attorney General joined is all about: All the way Juul is advertising and targeting youth in order to create clients addicted to nicotine for the rest of their life,” Maynard said.
The Colorado General Assembly has also passed HB20-1001 that increases regulations on nicotine sales including more frequent inspections, steeper fines, and a more stringent licensing process for tobaccos and nicotine retailers. It has not yet been signed by the Governor.