Proposition 56 is California’s latest round of regulations focused on taxing the tobacco and e-cigarette industries. For years, vape shops have survived relatively unscathed from overbearing tax hikes, but that has changed with the passing of Prop 56.

Now that Prop 56 has passed, vapor products will be reclassified as tobacco products, whether they contain any nicotine or not. This includes everything from devices to e-liquids, as they are all considered components of vaping, similar to the way that smokeless tobacco and other smoking products are still classified as tobacco products under older regulations.

The Scope of Prop 56

Proposition 56 aimed to reclassify vapor products as tobacco products, placing them under the same tax code as cigarettes and was overwhelmingly approved by California voters.

At face value, Prop 56 pushed for a $2 per pack price increase for cigarettes. However, this $2 tax hike could also be applied to every vapor product you purchase, including e-liquids. In addition, all vapor products would be subject to the higher tax rate to which tobacco products are already subject.

The culmination of all of these taxes hitting at once may be equivalent to a roughly 68% tax increase on e-liquid sales. In terms of dollars spent, the average 30 mL bottle of e-liquid may soon go from $18-22 up to more than $30.

Counter Arguments

There were several schools of thought in opposition to Prop 56 for e-liquid and vaporizer sales. Many vapers felt that any tax should have been proportional to the amount of risk that vapor products actually carry. Since it is widely accepted that vaping is a better alternative than tobacco cigarettes, and that vaping has helped many smokers quit, many people feel that vapor products should have their own classification and tax laws, separate from tobacco products. Especially since many of their products are nicotine-free altogether.

While California is currently home to as many as 1,500 vape shops, many of them are small operations that may be unable to afford the higher costs of operating under these new conditions.

Finally, there was significant concern about how the tax money will be used once it is collected. Supporters of Prop 56 claimed that the tax was being put in place to prevent kids from smoking and to reduce the number of adults who smoke. However, only a small portion of the tax money collected is actually slated to go toward smoking cessation programs. The rest of the money is intended for California’s low income health care system.

Those opposing the tax increase argued that the proposal was disingenuous and misleading when it came to intent and long term benefits to the public, especially if it cannot be proven that the majority of the funds will actually help smokers quit.

Fighting Back

In an effort eliminate the threat of Prop 56, many vape shops and vapers joined together to form a coalition against the proposal. These community groups aimed to educate people about the differences between vaping and smoking.

By educating the general public, it was hoped that more people would understand why vaping is safer, and create awareness of how vaping can help reduce smoking overall.

The group Nix 56 was a large scale movement that provided ample information and resources on their website for creating public outreach. They operated several active social media accounts with useful information for talking about vaping to other vapers and to non-vapers alike. In addition, their website helped potential voters get registered to vote.

VaporFi

At VaporFi, we believe that vapor products should be evaluated based on their own merits, not tossed in among convoluted tobacco laws, and the taxes assessed against vapor products should fit the true level of health risk associated with their use.

Though Prop 56 passed in California, there is still an ongoing battle to help the general public understand that smoking and vaping are not the same things and deserve to be treated differently legally. At VaporFi, we believe this battle will be won!