EMA Journal • Fall 2024 • At NATO

As expected, 2024 has been a very dynamic year in the tobacco legislative and regulatory space.

In April, the White House administration announced it was delaying a decision on whether to issue a final rule that would ban menthol cigarettes. “This rule has garnered historic attention, and the public comment period has yielded an immense amount of feedback, including from various elements of the civil rights and criminal justice movement,” Xavier Becerra, the Health and Human Services secretary, said in a statement. “It’s clear that there are still more conversations to have, and that will take significantly more time.” A rule banning flavored cigars also remains to be finalized.

Additionally, the FDA Center for Tobacco Products (CTP) has been under increased scrutiny over the lack of transparency and delays in its regulatory processes and the influx of illicit vapor products in the marketplace. In April, FDA Commissioner Robert Califf testified before the U.S. House Oversight & Accountability Committee over concerns about the CTP’s operations. U.S. House members from both parties questioned Califf about CTP’s handling of tobacco regulations, including the unreasonable delays in the FDA Pre-Market Tobacco Product Application (PMTA) application process. Since that hearing, a few more e-cigarette products have received marketing authorization orders, including the first flavored (menthol) e-cigarette products. Still, only 34 e-cigarettes have been approved.

In June, the U.S. Senate Committee on the Judiciary held a hearing on youth vaping and increasing enforcement against illicit e-cigarettes. In the first portion of the hearing, senators questioned both Dr. Brian King, director of the CTP, and Arun Rao, deputy assistant attorney general for the Civil Division’s Consumer Protection Branch in the Department of Justice, on why unauthorized vaping products are still widely available. Chairman Dick Durbin and other senators implored the FDA and the DOJ to better enforce federal laws against the unlawful sale of unauthorized e-cigarette products. King and Rao cited the multi-agency task force to combat the illegal distribution and sale of e-cigarettes. The task force brings together multiple federal law enforcement partners to coordinate and streamline efforts to bring all available criminal and civil tools against illicit e-cigarettes. As part of this effort, the FDA and the Department of the Treasury announced a proposed rule that would require an importer of vapor/ e-cigarette products to submit the FDA-issued Submission Tracking Number (STN) into the electronic imports system operated by U.S. Customs and Border Protection. Under the proposed rule, if a STN is not submitted for a vapor product, it may be denied entry into the U.S.

NATO Executive Director David Spross testified and expressed strong support for a well-functioning regulatory system in which FDA oversight leads to accelerated reductions in underage use and tobacco-related harm, as well as the need to enhance enforcement against illicit vapor products, emphasizing that illicit markets pose a threat to the responsible retail community. A well-functioning regulatory system also requires a more coherent compliance framework that clearly communicates FDA’s enforcement priorities — what categories of products it wants immediately removed from the marketplace and what categories can remain on the market pending review of timely filed applications. NATO additionally advocated for more vapor product marketing authorizations to support the growing adult demand for smoke-free products.

There are also some noteworthy tobacco and nicotine legislative developments at the state capitals.

Banning tobacco and nicotine flavors continues to be considered by state legislatures. Utah passed legislation to ban flavored vapor products other than menthol. In Vermont, flavor ban legislation was vetoed by Gov. Phil Scott, who cited inconsistencies in banning flavored tobacco products while the state has recently legalized other adult-oriented products such as cannabis. Michigan and Pennsylvania are considering proposals to ban all flavored tobacco products; similar legislation failed in Hawaii, Maine, Minnesota and New Mexico.

On the tax front, Maryland increased the cigarette tax from $3.75 to $5 per pack, the OTP tax from 53 percent to 60 percent, and vaping liquid from 12 percent to 20 percent of the retail price. A significant tax increase on all tobacco products is currently under consideration in Michigan, but tobacco tax increase bills failed in Hawaii, New Mexico and Nebraska.

An emerging issue in the states is the creation of state e-cigarette registries. The introduction of these bills is in response to the uncertainty around the PMTA process and the proliferation of flavored disposable e-cigarettes that are on the market. The FDA has not completed processing applications for thousands of e-cigarettes and other nicotine products. The FDA has only approved the marketing of a few dozen products, making the regulatory status unclear to retailers and the public of a large number of products, such as those for which a PMTA was never filed, those for which a PMTA was timely filed and the application is awaiting an order, and those for which a PMTA was denied but the application remains pending for legal reasons. These bills create a state-based directory that requires e-cigarette manufacturers to submit information to state tobacco regulators demonstrating that the sale of their e-cigarette products in the state complies with FDA regulations and guidance. Florida, Iowa, Kentucky, Utah and Virginia enacted registry legislation thus far in 2024, while approximately 15 states have rejected this legislation. Alabama, Louisiana, Oklahoma and Wisconsin have enacted legislation in previous years.

NATO remains engaged on these issues and at all levels of government to help protect its retail members. NATO is proud to serve its retail members and to communicate to legislators and regulators how its members sell tobacco products responsibly and in compliance with all applicable laws and regulations.

by David Spross, Executive Director, National Association of Tobacco Outlets (NATO). NATO is a national retail trade association that represents members operating more than 66,000 stores throughout the country.