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October 7, 2020
11 min to read

Vape Taxes and Cannabis on State Ballots Nov. 3rd

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Jim McDonald

Voters on Nov. 3 will be choosing the U.S. President and Vice President, 35 U.S. Senators, all 435 U.S. House of Representatives members, and 11 state governors—along with thousands of state and local office holders. They’ll also be deciding a huge number of state and local ballot issues, including some that affect vapers.

Citizens of two states—Colorado and Oregon—will be deciding whether to impose taxes on nicotine vaping products. In four states, voters will decide whether to approve legal recreational cannabis sales, and two will decide on legal medical marijuana.

We’ve included basic information on each proposal. You can get additional details from Ballotpedia, or state and local sources. You can find information on other ballot issues, political races, voter registration, how to request absentee ballots, and details on voting locations and rules at VOTE411, a site created by the non-partisan League of Women Voters.

Because of the coronavirus pandemic, most states are making extraordinary efforts to enable voting by mail. Don’t wait till the last minute if you choose not to vote in person. Because of postal service delays, it’s possible that ballots sent at the last minute might not be counted.

Vape product tax proposals

Taxes are usually proposed through bills in the state legislature, but sometimes they are voted on directly by the public. Less popular taxes—like vaping taxes, which most residents don’t understand or care about—are often hidden in ballot initiatives that include popular proposals, like cigarette tax increases. That is the case with both statewide ballot measures being voted on Nov. 3.

Colorado: a rising tax rate on nicotine vaping products

Colorado’s Proposition EE began as a bill passed by the Colorado legislature, primarily supported by Democrats. Because of rules imposed by Colorado’s Taxpayer Bill of Rights, voter approval is required for legislation that increases government revenue “at a faster rate than the combined rate of population increase and inflation,” according to Ballotpedia.

The ballot measure would create a tax on nicotine-containing vapor products that matches the state’s tax on non-cigarette tobacco products. The tax would begin at 30 percent of the manufacturer’s list price (MLP) in 2021, and rise gradually to 62 percent of MLP in 2027.

It would also incrementally increase cigarette taxes from the current 84 cents a pack to $2.64 in 2027, and increase the tax on cigars, pipe tobacco and smokeless tobacco from the current 40 percent of MLP to 62 percent in 2027.

Needless to say, a 30 percent tax would seriously damage Colorado vapor businesses, and a 62 percent tax would probably deliver a death blow. Vapers would simply buy online from out-of-state sellers.

Oregon: a 65% tax on nicotine e-liquid and vaping devices

Oregon Measure 108, which was introduced in the state legislature (as HB 2270) at the governor’s request, passed with mostly Democratic support. It required—and got—a 60 percent majority to go to the November ballot for voters to decide.

The measure will, if passed, tax nicotine “inhalant delivery systems” (nicotine vaping and heated tobacco products) at 65 percent of the wholesale price. The tax also applies to “components,” which includes e-liquid. It specifically exempts cannabis vaping products, or any vaping product sold by a licensed cannabis dispensary.

Measure 108 would also tax cigars at 65 percent (with a cap of $1.00 per cigar), and increase the cigarette tax from $1.33 to $3.33 a pack.

A 65 percent tax will probably drive most vape shops out of business, especially when many are already challenged by the FDA’s newly implemented PMTA requirements. As with the Colorado ballot measure, the vape tax is paired with a cigarette tax increase, which will be popular.

Cannabis legalization on the ballot in 5 states

Five states are voting on some kind of legal cannabis in November. Three will decide on legalizing recreational (“adult-use”) cannabis sales and possession, one will vote on allowing sales of medical marijuana, and one will decide on both.

With 11 states and Washington D.C. already allowing sales and possession of recreational weed, and 24 others allowing some form of medical cannabis sales, few believe that federal prohibition will survive long. But until Congress votes to remove cannabis from the Controlled Substances Act, states will have to decide individually on the plant’s legal status.


Arizona: a second try at recreational legalization

The Smart and Safe Arizona Act is a citizen initiative (proponents collected signatures from citizens who support the law) that would legalize recreational cannabis sales and possession. It would establish a legal market, issue 160 retail licenses (130 to existing medical dispensaries), and assess a 16 percent retail tax on all sales.

If passed, the law will allow possession of up to one ounce (28 grams) of cannabis products, with no more than five grams being concentrates. It also allows home cultivation of cannabis plants.

Although the ballot measure is showing strong support in opinion polls, cannabis advocates remember 2016, when a similar proposal was rejected by a slim margin. Additionally, the measure is facing a legal challenge from a group that opposes legal cannabis, and could possibly still be removed from the ballot if that lawsuit is successful, according to Leafly.

Mississippi: two medical cannabis proposals cause confusion

Mississippi has two medical marijuana measures on the ballot, which seems intended to purposely confuse voters. Opponents of the citizen petition-supported measure Initiative 65 approved a competing proposal through the legislature called Alternative 65A. The two options are far different. Both are listed on the ballot under Ballot Measure 1.

Initiative 65 would allow medical marijuana treatment for 20 qualifying conditions, possession of up to 2.5 ounces of cannabis at a time, and taxes sales at the same seven percent rate as the state sales tax.

Alternative 65A, approved for the ballot by the Republican-dominated state legislature and supported by the state health department and anti-cannabis activists, is designed to make cannabis access as difficult as possible for medical use. The proposal would “restrict smoking marijuana to terminally ill patients; require pharmaceutical-grade marijuana products and treatment oversight by licensed physicians, nurses, and pharmacists.”

Because there are no such things as “pharmaceutical-grade” cannabis flower or concentrates, patients would probably be restricted to prescription-only cannabis-based drugs like Epidiolex and Dronabinol, which are already available by prescription through doctors.

Neither proposal would allow homegrown marijuana. Initiative 65 would mandate that medical marijuana be provided through “licensed treatment centers” (dispensaries), which will be established by the state by Aug. 15, 2021. Medical marijuana cards would have to be renewed annually, according to Leafly.

Montana: two initiatives must pass to legalize recreational cannabis

Montana has two ballot measures also, but unlike Mississippi’s competing proposals, Montana’s would work together to legalize recreational weed for residents over 21. Initiative 190 (I-190) would legalize cannabis sales and possession, and Constitutional Initiative 118 (CI-118) would amend the state constitution to set the legal age to buy and possess cannabis at 21. According to Reason, I-190 would be unconstitutional without the passage of CI-118.

I-190 would legalize possession and use of marijuana for adults over 21, mandate a 20 percent tax on cannabis sales, and require the state Department of Revenue to develop rules for the cannabis marketplace. The proposal “requires licensed laboratories to test marijuana and marijuana-infused products for potency and contaminants.” Local municipalities would have the ability to regulate local cannabis businesses in their jurisdiction, according to Ballotpedia.

If passed, the new law will allow possession of up to one ounce of cannabis flower and up to eight grams of concentrates. Adult-use cannabis would be sold through dispensaries, although it is uncertain how many licenses would be issued. For the first year of the program, existing medical dispensaries would have dibs on recreational licenses, according to Leafly.

The proposal would allow for home cultivation of “four mature marijuana plants and four seedlings.” It would also make provisions for resentencing individuals convicted of offenses that are no longer crimes, or having their convictions expunged.

CI-118 would simply add language to the Montana Constitution that limits the legal age to buy cannabis to 21. It adds the words “and marijuana” to the end of this existing sentence: “A person 18 years of age or older is an adult for all purposes, except that the legislature or the people by initiative may establish the legal age for purchasing, consuming, or possessing alcoholic beverages.”


New Jersey: a good recreational legalization far

Public Question 1 would add an amendment to the state constitution legalizing the use, sale, cultivation and processing of cannabis for recreational purposes by those 21 or older. It would give the state’s Cannabis Regulatory Commission authority over adult-use cannabis.

The question was added to the ballot through a resolution passed in 2019 by the New Jersey Legislature after the body failed to pass a legalization bill. The resolution had wide support among Democrats, but was opposed by most Republicans.

The ballot measure would allow the state’s normal sales tax to be applied to adult-use cannabis, but it prohibits the assessment of additional state sales taxes. It would allow local governments to add an additional two percent sales tax.

Beyond the tax limitation, Public Question 1 has few specifics. It would be up to the state legislature and the Cannabis Regulatory Commission to determine the details—and that leaves a lot of room for a good, simple proposal to get dragged into the sewer of New Jersey politics.

The measure has provisions for many convicted of marijuana possession to have their records expunged. It also would prevent discrimination against people convicted of marijuana offenses by employers and landlords.

Polling shows New Jersey voters are likely to approve the measure in a landslide.

South Dakota: medical and recreational legalization are both on the ballot

South Dakota will become the first state to vote on medical and recreational cannabis legalization in the same election. The two ballot measures are Initiated Measure 26 (IM-26) for medical marijuana, and Constitutional Amendment A (CA-A) for adult-use cannabis.

South Dakota is long overdue for an overhaul of its cannabis laws. According to the Marijuana Policy Project, the state may have the worst rules of any state, including a law that allows possession charges for people who test positive for THC even if they only “possess” THC in their blood and consumed that cannabis in a legal state at an earlier date. Possession of any amount of concentrates is a felony that can be punished by up to five years in prison.

CA-A would legalize recreational use for people 21 and older, and allow possession or distribution of up to one ounce of marijuana (with no more than eight grams being in concentrate form). It also would mandate the state legislature to pass a law creating a medical marijuana program by April 1, 2022. It would assess a 15 percent tax on cannabis sales.

The measure would give regulatory authority for recreational cannabis to the state Department of Revenue, and mandate the agency to make rules to implement the amendment. The revenue department would control licensing and set rules for health and safety.

CA-A would allow local jurisdictions to ban commercial growing, testing and sales, according to Ballotpedia. It would, however, allow home growing of up to three plants by individuals (and a total of six in any single home) in areas that have banned retail cannabis stores.

The medical marijuana measure, IM-26, would establish a medical marijuana program for people with certain medical conditions certified by a licensed physician. It would allow cardholders to possess up to three ounces of marijuana, and give the state Department of Health authority to set possession limits for other cannabis products.

The measure would allow patients registered to cultivate at home to grow three plants (or more if prescribed by a physician). It would not tax medical marijuana.

Further information

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Jim McDonald

Vaping since: 12 years

Favorite products:

Favorite flavors: RY4-style tobaccos, fruits

Expertise in: Political and legal challenges, tobacco control haters, moral panics

Jim McDonald

Smokers created vaping without help from the tobacco industry or anti-smoking crusaders, and I believe vapers have the right to continue innovating to help themselves. My goal is to provide clear, honest information about the challenges vaping faces from lawmakers, regulators, and brokers of disinformation. I’m a member of the CASAA board, but my opinions aren’t necessarily CASAA’s, and vice versa. You can find me on Twitter @whycherrywhy

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