Surrogates for Colorado Gov. Jared Polis reportedly negotiated directly with several large tobacco companies to ensure that premium cigarette brands are protected, reports The Colorado Sun.
Voters in Colorado approved Proposition EE — a ballot measure that drastically increases the statewide nicotine and tobacco tax — with overwhelming support. Prop. EE permits creating a tax on nicotine products that will finally cover e-cigarettes and other smoke-free products. The measure will also increase cigarette and tobacco taxes and dedicate revenues to various health and education programs, per previous reporting by our team at Vaping Post.
The Sun reported that Polis’ office was in direct communication on several instances with political and government relations representatives from tobacco giant Altria Group — the publicly traded firm that owns Philip Morris USA and the U.S. Smokeless Tobacco Co.
The communications focused on Altria promising not to challenge the proposed ballot legislation to exchange price protection for their premium cigarette brands like Marlboro. The minimum-price clause that was included in the finalized Prop. EE measure requires a pack of cigarettes to be sold for no less than $7 per pack, starting at the beginning of 2021. Emails that The Colorado Sun also reviewed show that Polis’ office was warned that the provision to help Altria and further monopolize the cigarette market in the state and further limit discount competitors who operate in the space.
“It’s like forcing our Honda to sell for the same amount as Mercedes,” Craig Hughes, an extremely powerful Democratic political consultant wrote to Cary Kennedy, a senior adviser to Polis, via The Sun. “It’s a lower-quality product, priced as such, which is how it gets its market share. If we forced Honda to increase their price to (the) same as Mercedes, no one would buy it. … Are we literally writing into state statute something that creates a Colorado monopoly for higher-end Altria products?”
A federal lawsuit was filed against Gov. Polis and Colorado Attorney General Phil Weiser, including members of the state legislature, claiming that Prop. EE was a scheme to protect big tobacco. Vaping Post published my analysis on this lawsuit’s announcement on October 22, 2020, days before the November General Election. A plaintiff class led by discount cigarette maker Liggett Group LLC, some of their divisions, and a cigarette consumer in Littleton, Colo., filed a federal complaint which argues that the voter-approved measure placed price protection for premium cigarette brands in the guise of protecting public health. However, a federal court declined to stop the Liggett et al. complaint requesting that the minimum price clause be removed from the Prop. EE law.
This is a developing story.