California E-Cigarette Bill Abandoned

Sen. Mark Leno, D-San Francisco, who had carried the legislation, said the amendment undermined its central intent by declaring that e-cigarettes are not tobacco products.

“I no longer believe in it. None of my sponsors believe in it ... I dissociate myself from it,” Leno said, telling committee members he spoke “on behalf of the next generation of Californians who will be addicted to nicotine as a result of your vote.”

The bill’s collapse marked a grim day for tobacco control advocates.

A separate bill that sought to raise the tobacco-buying age to 21 did not get a vote on Wednesday. Sen. Ed Hernandez, D-Azusa, pulled his Senate Bill 151 ahead of a scheduled hearing and argued that “Big Tobacco is following their usual playbook and trying to kill this bill quietly in a committee,” though his office said he planned to continue pursuing the measure.

The booming popularity of e-cigarettes, which typically heat flavored chemicals that include nicotine into vapor that can be inhaled, has alarmed public health advocates and spurred a California Department of Public Health campaign to warn about the hazards. Leno introduced Senate Bill 140 to classify and therefore regulate e-cigarettes as tobacco products, noting that nicotine derives originally from tobacco plants.

“Nicotine comes from tobacco. These are tobacco products,” Leno testified. “It’s no small difference of opinion whether these are tobacco products or not, because if they’re not tobacco products, Big Tobacco can continue to market their ‘non-tobacco product’ to our children.”

But the chair of the Assembly Governmental Organization Committee, Democrat Adam Gray of Merced, pushed an amendment striking the language equating e-cigarettes to tobacco. Just three committee members, all Democrats, voted at Leno’s urging to beat back the amendment before the full committee accepted it.

With the change, “it has no substance,” said Assemblyman Jim Cooper, D-Elk Grove, who did not support the amendment. He called the revised measure “toothless.”

Owners and employees of vaping businesses filled the hearing room to testify against the bill, arguing it would impose onerous new regulations that would blunt sales and dissuade people from quitting cigarettes. Many said they had been heavy smokers of traditional cigarettes, which they argued are more dangerous, before e-cigarettes allowed them to quit.

“There is little doubt that there are key differences between products currently defined as tobacco products or vapor products,” said Erick Beall of the Smoke-Free Alternatives Trade Association, which he said represents roughly 170 California businesses. A former smoker, Beall carried an e-cigarette equipped with blood orange and french vanilla flavors.

Vaping advocates at Wednesday’s hearing rejected any connection to the conventional tobacco industry, which has increasingly invested in e-cigarettes.

“Yes they make e-cigarettes, but they do not represent this industry – this industry was created by ex-smokers who use these products to quit,” testified American Vaping Association president Gregory Conley.

The Governmental Organization Committee, which has jurisdiction over tobacco products, has a reputation within the Legislature as being sympathetic to tobacco interests.

American Cancer Society lobbyist Tim Gibbs called the panel a “backstop the tobacco industry has installed for themselves.” Tobacco companies directly donated $145,000 to committee members last election cycle, according to a Bee analysis, with Gray receiving the most.

Tobacco industry representatives argue against a state-by-state approach and say policymakers should defer to federal rulemaking. Reynolds American Inc. President Susan Cameron warned during a February conference about “a lot of bills about vapor out in the state legislatures, and some of those are uninformed bills and some of those need shaping.”

“States and localities should not broadly restrict adult consumer use of e-vapor products in public places,” Altria spokesman David Sutton said in an email. “Business owners – particularly owners of restaurants and bars – are most familiar with how to accommodate the needs of their patrons and should have the opportunity and flexibility to determine their own policies on use of e-vapor products.”

No tobacco company representatives testified against SB 140 on Wednesday, and official bill analyses do not record them in opposition. But lobbying disclosure forms show both Altria and RAI weighed in on SB 140. Lobbyists representing those companies did not return calls from The Sacramento Bee. But Leno said they played a role.

“An industry that has absolutely no credibility knows better than to show their face, so there is very little visual, obvious lobbying going on,” Leno said before the hearing, adding that when SB 140 faced a Senate floor vote he observed “lobbyists for the tobacco industry working the halls, trying to manipulate the vote.”

E-cigarettes have increasingly figured into the business models of traditional tobacco companies. The strategy reflects shifting consumer habits, with a California Department of Public Health study showing teen e-cigarette use for the first time surpassing traditional cigarette smoking.

The two firms recording the largest shares of e-cigarette sales last year were tobacco companies Reynolds American Inc. and Lorillard, which owns blu brand e-cigarettes, according to data compiled by Wells Fargo analyst Bonnie Herzog.

In the same analysis, Herzog predicted that e-cigarette consumption could overtake cigarette smoking in the next decade, with “Big Tobacco’s national e-cigarette rollouts” driving sales.

In an April earnings report call, Altria Group CEO Martin Barrington noted the company’s commitment to “succeed in the long term” in the e-cigarette market. Cameron said during a February earnings call that “it is clearly part of our strategy to transform the tobacco industry to become the vapor authority” and, during an event for consumer analysts, played an advertisement depicting RAI’s Vuse e-cigarette as a device of the future.

“It’s been a long time since you’ve seen a tobacco company with a commercial in the U.S.,” Cameron said.

Federal law has prohibited cigarette advertisements on television and radio for decades, and the terms of a 1998 legal settlement also barred them in cartoons, billboards and public transportation. To the frustration of public health advocates, the same rules do not apply to e-cigarettes.

That could change under federal Food and Drug Administration regulations that would treat e-cigarettes like tobacco products and open the door to regulating e-cigarette advertising, spending on which the California Department of Public Health study found has increased by more than 1,200 percent in the last three years.

But even if the federal government moves ahead on those rules, California would still be unable to bring e-cigarettes under state laws governing licensing, barring smoking in public places or a law, known as the STAKE Act, that levels penalties for selling tobacco products to underage Californians.

“Sales to minors are illegal, but the industry is very cynical about that – as long as there isn’t an effective enforcement tool, those sales will continue unabated,” said John Lovell, a lobbyist who spoke in favor of Leno’s version of the bill on behalf of the California Narcotic Officers’ Association and the California Police Chiefs Association.