Massachusetts Regulators Knowingly Drive Vapers to the Black Market

Bay State officials expect a new ban on flavored tobacco products to benefit illegal suppliers.

It's not often that a government agency admits that its mission is doomed, but that's what the Massachusetts Department of Revenue's Illegal Tobacco Task Force is doing with regard to the state's new ban on flavored tobacco products. As a consequence of severely restricting flavored vaping products, flavored smokeless tobacco, and menthol cigarettes, "the Task Force expects there will be an increase in smuggling activity and black market sales," it admits in its latest report.

But don't expect the Bay State's official busybodies to throw in the towel; to the contrary, they want expanded enforcement power. All we get is an acknowledgment that even the prohibitionists know they're spinning their wheels.

That the new ban is counterproductive was obvious from day one, when it was passed amidst much huffing and puffing about protecting state residents—especially the young ones—from the alleged dangers of vaping.

"Massachusetts has taken important steps to protect its residents from the emerging public health risk posed by vaping products, and with the new law signed by Governor Baker and the introduction of today's regulations, we continue to prioritize actions that protect the public health," Public Health Commissioner Monica Bharel proclaimed in a December 2019 press release.

But the "public health risk posed by vaping products," as the federal Centers for Disease Control and Prevention (CDC) points out, is almost entirely a matter of lung injury—referred to as EVALI—caused by tainted black-market goods.

"National and state data from patient reports and product sample testing show tetrahydrocannabinol (THC)-containing e-cigarette, or vaping, products, particularly from informal sources like friends, family, or in-person or online dealers, are linked to most EVALI cases and play a major role in the outbreak," CDC reports on its page regarding the issue.

The data so far implicates Vitamin E acetate, which is often used by black-market producers to cut THC vaping products. Generally safe for human consumption, Vitamin E acetate turns out to be something you don't want to inhale. But its inclusion in vaping cartridges is difficult to detect or deter when you've driven production to underground operators.

And absolutely the best way to drive production and distribution of a sought-after good to the black market is to raise legal barriers to its purchase. Governments can do that through outright bans, through restrictive regulations, and through high taxes. Any of these will send consumers looking elsewhere and illegal dealers will be happy to satisfy demand. Massachusetts officials managed to do all of these with a law that forbids retail sale of flavored tobacco products (including vaping products) except at licensed smoking bars where they're taxed at 75 percent and must be consumed on-site.

Even before the new law, which went into effect on June 1, Massachusetts officials had done their best to make sure the state was a lucrative market for black market suppliers of regular smokes, as well as menthol cigarettes, smokeless tobacco, and vaping products —collectively known to regulators as "other tobacco products" (OTP).

"The Commonwealth's high tax rates on OTP relative to other states provide smugglers a strong incentive to import such products from other low-tax states and sell them to in-state buyers willing to illegally evade payment of the applicable Massachusetts tobacco excise," the Illegal Tobacco Task Force's February report conceded.

In fact, as of 2017, 21.52 percent of all of the cigarettes consumed in Massachusetts had been smuggled to evade taxes and restrictions, according to the Mackinac Center for Public Policy. That gives us an idea of the size of the illegal market for other tobacco products. State officials have a good handle on the likely results of restrictions, too.

"Now that the retail sale of flavored smokeless tobacco will be illegal in Massachusetts as of June 1, 2020, the Task Force expects there will be an increase in smuggling activity and black market sales," the task force admits in its report.

And that point was recently reinforced in very clear terms.

"I am concerned that placing an added burden and tasking them with the enforcement of a flavored tobacco ban will only serve to create a significant new black market," Charles Giblin, retired Special Agent in Charge of the New Jersey Department of the Treasury Office of Criminal Investigation, told the task force on behalf of tobacco company Altria at a June public meeting. "At the onset, you will see increased trafficking between Massachusetts and New Hampshire, and the illegal importation, via the internet, of counterfeit flavored cigarettes from countries including China and Paraguay will skyrocket… My research has found flavor kits designed to add flavor to both vape and tobacco are already available and being sold online."

That's not to say that smuggled supplies of flavored vaping products, menthol cigarettes, and smokeless tobacco are the same thing as THC vaping cartridges containing Vitamin E acetate. Nor does it mean that they pose the same risks to their users. But it does mean that officials' health concerns are misplaced and that they're driving consumers to underground pipelines of products—quite possibly the same ones peddling the tainted THC goods.

This is all the more remarkable because Massachusetts officials openly admit that the higher taxes and near-ban on flavored tobacco products will result in "an increase in smuggling activity and black market sales." There's no pretense here that the restrictive new laws will succeed where every preceding prohibition, tax, and restriction in history has failed to deter people from buying and selling goods that government types don't want them to have.

Well, that's not quite true. "The Task Force is considering the need for increased enforcement efforts concerning flavored smokeless tobacco," the February report says because, apparently, nobody ever before thought of prohibiting harder.

Forget about increased enforcement of prohibitionist efforts—that has yet to work anywhere. Massachusetts officials had it right the first time when they predicted that state efforts to ban flavored tobacco and vaping products will be a gift to smugglers and the black market.