How lobbyists succeeded in watering down Utah anti-vaping measures

State lawmakers who have long battled youth vaping entered this year’s legislative session confident that the time had come for clamping down on the epidemic, for confronting the problem head-on instead of nibbling around the edges.

Concern about the crisis had reached new heights as dozens of Utahns required hospitalization and one died because of vaping-related lung ailments that medical experts didn’t fully understand.

Legislative leaders last year formed a work group to address e-cigarette use, and near the outset of this year’s session, the state’s governor, attorney general and health officials convened a press conference promoting a bevy of anti-vaping measures.

“This kind of seemed like a watershed moment, as far as the state really taking serious action to address the youth vaping epidemic,” said Marc Watterson of the American Heart Association.

Over the following weeks, the Legislature did pass several lengthy bills to tax and regulate the sale of e-cigarettes and — lawmakers say — root out vape businesses that have used dubious tactics to avoid oversight and market to youth. And some health officials say they’re pleased with the progress, even though they didn’t get everything they wanted.

Still, some lawmakers at the forefront of state’s fight against youth vaping ended the session deflated, arguing their colleagues caved to powerful industry lobbyists and didn’t go nearly far enough.

While lawmakers voted to eliminate most flavored e-cigarettes from convenience stores, they made an allowance for products that taste or smell like tobacco, mint or menthol — even though studies have shown mint is the most popular flavor for teen users.

There will be a new 56% tax on vape products at the manufacturer’s level, if Gov. Gary Herbert gives his endorsement, but that’s a far cry from the 86% the bill’s sponsor wanted or from the estimated equivalent tax on a pack of cigarettes. And although rule-bending corners of the vape industry will have to clean up their act, the legislation approved this year gives these shops a gentler ramp toward legitimacy than some would’ve liked.

“In the last year, it appeared to me that finally our state and our Legislature had collected the political will to make meaningful change in this space,” Rep. Jennifer Dailey-Provost told lawmakers before watching her vaping bill die in a Senate committee. “But now, it appears that the levers being pulled by Big Tobacco, nefarious store owners ... and dishonest lobbyists will muddy the waters. And our Legislature will yet again ignore the opportunity to make meaningful change that will finally stem the tide of youth addiction.”

Vape lobby

Public alarm over e-cigarettes seemed to crescendo last year as hundreds of people across the nation fell ill with a mysterious lung condition linked to vaping, with most cases involving use of THC products.

In Utah, the ailment has been associated with one death and the hospitalization of 134 people, according to data through late January. The state had the nation’s highest per-capita rate of the illness, Utah health officials say, and about a fifth of the cases involved patients younger than 20.

Despite that, the vaping industry has succeeded in softening the state’s crackdown, Dailey-Provost and others say, because it has recruited some of the most well-connected lobbyists on Capitol Hill.

Greg Curtis, lobbyist for a major Juul Labs investor, is a former Utah House speaker and uncle to Sen. Kirk Cullimore — who at a couple points this session helped dilute e-cigarette legislation and helped kill Dailey-Provost’s bill in committee. One of the Utah Vapor Business Association’s lobbyists is the son of House Majority Leader Francis Gibson, R-Mapleton. Another association lobbyist, Casey Hill, has run campaigns for both the Senate president and House speaker.

Rarely testifying in public hearings, industry lobbyists worked behind the scenes to mold the e-cigarette policies passed by the Legislature, lawmakers and advocates say.

Hill, who also is a registered lobbyist for the Utah Medical Association, argues that tobacco and vape lobbyists don’t hold undue sway in the Legislature, as evidenced by this session’s suite of bills to tax and police the industry.

“The Legislature ultimately passed a significant tax, and that tax will go toward heightened restrictions and regulations and go toward sting operations,” he said. “I wouldn’t characterize what happened for the vape industry in any way as a win.”

Cullimore and industry representatives bristle at suggestions of influence-peddling and agree with Hill that the bills approved during the 2020 session make significant strides toward addressing the youth vaping epidemic in Utah. Juan Bravo, president of the Utah Vapor Business Association (UVBA), said his group has tried to be an ally in cracking down on the problem but found themselves unfairly cast as the enemy by some lawmakers and health groups.

“If you had any idea of the kind of ass-kickings that myself and the vice chair of the UVBA went through,” Bravo said in an interview. “We had our character dragged through the mud.”

He acknowledges the dangers of teen e-cigarette use — while vaping helped him wean himself from cigarettes, he says he’d never want his kids picking up the habit.

Nicotine can harm brain development in adolescents, potentially leaving them susceptible to addiction and putting them at greater risk of developing psychiatric disorders later in life, according to the Utah Department of Health. And scientists are still working to understand the respiratory dangers associated with vaping.

Regardless, nearly 16% of Utah’s high school seniors report they are vaping at least once a month, up from less than 3% in 2011.

“We’ve done such a good job with our anti-smoking campaign — in 20 years, I think Big Tobacco in the U.S. will be out of business,” said Rep. Paul Ray, R-Clearfield, who’s spent years sounding alarm about youth vaping. “So they realize that they needed to addict a whole new generation. E-cigarettes are the route to addict.”

Vape tax

To warn this next generation, legislators this session passed a bill that, among other things, requires school-based programs on the dangers of e-cigarettes. Funds for sweeping statewide education and enforcement efforts on vaping are poised to come from another measure, which would tack a new 56% tax onto these products at the manufacture’s level.

Though Bravo calls the new levy “predatory,” it’s not the 86% that Sen. Allen Christensen urged his colleagues to impose as a way of dissuading youth from buying vape products. On the Senate floor, Christensen pointed to a Utah Tax Commission analysis that showed the state would have to slap a 108% tax on vape products to match the equivalent tax on an average pack of cigarettes.

But he was overruled, as Cullimore, R-Draper, successfully lowered the tax rate to the 56% supported by most Senate Republicans.

Industry lobbyists seemed successful in convincing lawmakers that taxation didn’t work as a deterrent, pointing out that Minnesota in 2012 imposed a 95% tax rate without making much of a dent in teen vaping, Watterson of the heart association said. He believes the example is misleading, since the youth epidemic didn’t really escalate until Juul took over the market in 2016.

“It felt very disingenuous that ... the lobbyists were saying, ‘Look at Minnesota,’ and yet it was their products that came onboard four years later that were really leading to the youth usage,” he said.

Cullimore said the higher tax rate would likely have spelled defeat for Christensen’s bill, and he felt it was better to compromise than lose the proposal entirely. And a spokeswoman for the Senate said there was some confusion during the session about the tax rate that would put vape products and cigarettes on an even playing field.

“The policy intent was to address the vaping crisis and generate funds to educate students about the dangers of vaping, not merely implement a tax at the highest amount possible,” said Aundrea Peterson, Senate spokeswoman. “The legislation passed will generate an estimated $24 million with $10 million as a reserve if projected revenues are less than anticipated.”

While Christensen believed his bill remained a major step in the right direction, he said he ended up feeling “screwed over" by the Senate’s takeover of his tax rate.

“Basically, my whole session has been fighting this thing,” the North Ogden Republican said. “So I’m getting lots of people helping, but lots of people pulling in opposite directions. And then you’ve got the lobbyists up here who are jumping up and down and screaming and yelling. And people unfortunately are listening.”

Vape flavors

Health advocates point to vape juice flavors — fruity options like peach and mango or dessert options like birthday cake and cotton candy — as evidence that companies are marketing to minors. But this session’s debate about restricting flavors largely centered on two in particular: menthol and mint.

Going forward, those and tobacco will be the only flavors that Maverik gas stations, 7-Elevens and other convenience stores will be allowed to sell. All others will now be restricted to specialty tobacco shops, where customers will, like bar patrons, have to scan their driver licenses near the entryway.

That’s because of a bill sponsored by Rep. Jon Hawkins, who contends that convenience stores should be permitted to sell tobacco, mint and menthol vape products for consistency’s sake; while the federal government has banned most flavors for regular cigarettes, there’s a carveout for menthol.

Dailey-Provost, D-Salt Lake City, argues against comparing vape products and cigarettes, since minors tend to gravitate toward the former and not the latter. And mint is a flavor of choice for teens, she said.

Still, she was willing to bend on menthol e-cigarettes as she struggled — and ultimately failed — to build consensus around her legislation to tamp down on flavors. After a Senate committee killed her proposal, aspects of it were absorbed into the bill brought forward by Hawkins, who was willing to exempt both menthol and mint from the convenience store ban.

Hawkins, R-Pleasant Grove, acknowledged he’d listened to the vape industry when shaping his bill but said he gave them no more attention than the public health officials and advocates he invited to the table. And he notes that his legislation stiffens penalties against any retailer who sells vape products to minors, whether in a Maverik or a smoke shop.

“It doesn’t matter what flavor it is,” he said. “The bill isn’t saying it’s OK to sell mint and menthol because they’re in convenience stores.”

Vape shops

Another legislative battle this year was over rooting out questionable business practices in the vape industry.

Under Utah law, a shop that derives more than 35% of its revenue from tobacco products or that devotes significant shelf or floor space to these items is supposed to have a specialty license. And these licenses come with restrictions aimed at protecting minors: The holders can’t be too close to a school or a neighborhood. They also have to keep their distance from parks, churches and other community centers.

However, the continued evolution of the state’s laws on tobacco retailers meant some existing vape shops were in the right location one day and the wrong location the next, according to Bravo.

"So they had to adapt," he said.

Others call it skirting the rules or exploiting legal loopholes.

Some stores, for instance, will claim they sell mostly clothes or trinkets so they don’t have to secure a tobacco specialty license and abide by heightened restrictions, health officials say. While these businesses might still brand themselves as vape stores, they’ll charge next to nothing for e-cigarette products with the purchase of a $20 T-shirt or a bracelet — ensuring they never cross that 35% threshold.

“By doing that, on paper, they’re not a tobacco specialty store,” said Ryan Bartlett, spokesman for the state’s tobacco prevention and control program.

Another tactic, Dailey-Provost says, is to list e-cigarette products as “miscellaneous” items on store receipts. With no documentation of vape product sales, the businesses can, again, claim on paper they don’t count as a specialty store.

Cullimore, who steered Hawkins’ bill through the Senate, said he’d heard estimates that anywhere from 40 to 100 businesses might be employing various practices to sidestep the specialty licenses.

Hawkins’ proposal tries to get at these businesses by requiring itemized receipts for the sales of tobacco products and forbidding them from markdowns of e-cigarette merchandise. His legislation also requires a business to have a tobacco specialty license if a reasonable person would think it’s a vape shop or if it “holds itself out” as such.

Still, to Dailey-Provost’s frustration, the new rules won’t immediately force vape shops away from places young people congregate. Stores located near schools will have to move or close this year. But thanks to a grandfathering clause, other businesses will have until July 1, 2022, to shift away from sensitive locations — including parks, daycare centers or neighborhoods.

This roughly two-year period represented a healthy compromise between the industry and lawmakers, Cullimore argues, requiring shops to elevate their standards but giving them a reasonable transition period. Hill, who said he largely focused on this issue during the legislative session, agrees.

“If there are bad actors in the industry, those bad actors will be out of business in short order,” he said.

On the other hand, Dailey-Provost and Sen. Luz Escamilla saw the grandfathering language as a dangerous concession that legitimizes these business. Escamilla told her colleagues she was disappointed by what she viewed as the Legislature’s muted overall response to addressing a youth vaping crisis that will have repercussions for years to come.

“Are we doing something? Yes," the Salt Lake City Democrat said in the moments after the Senate lowered the tax rate in Christensen’s bill. “Enough? Not even close."