“Gov. Jared Polis’ office was asked to meet several conditions insisted upon by Altria in exchange for the cigarette giant agreeing not to fight legislation that put a question on the November ballot asking voters to raise tobacco and nicotine taxes in Colorado. One of those conditions included adding a minimum-price clause to the measure that requires a pack of cigarettes to be sold for no less than $7 starting this year. The emails show Polis’ office was warned the provision could help Altria, which owns the Marlboro brand and is heavily invested in the vaping company JUUL Labs, dominate the cigarette market in Colorado by boxing out discount competitors. The legislation, House Bill 1427, passed with the minimum-price clause in the final days of Colorado’s 2020 legislative session. Voters then overwhelmingly approved the ballot question, Proposition EE, in the November election.
Nicotine products, including vaping devices and fuel, have not previously been taxed in Colorado. But now, under Proposition EE, they are taxed at 30% of their manufacturer’s list price. By July 2024, that would rise to 56% of the list price and to 62% in July 2027. While Proposition EE raises taxes on most tobacco and nicotine products in Colorado, it actually slashes them for so-called modified-risk tobacco products. Modified-risk tobacco products — or MRTPs — are determined by the Food and Drug Administration to have lower risks of certain health effects compared to smoking cigarettes. Only a limited number of products have achieved that designation, but a number of them are marketed by Altria. Altria sees those products, which are part its IQOS system, as its future. Vaping shops objected to the MRTP discount, saying they lack the resources to seek an MRTP designation for their merchandise from federal regulators and that Altria would be given another market advantage.”
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Emails show negotiations involving Colorado governor, cigarette giant that led to tobacco tax hike
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