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Scandal: Big Pharma, the FDA, and the 70% e-cig tax of California Prop 56

Posted by Matt Rowland on

First came the FDA deeming regulations of May 5, and now California vape shops are under seize yet again as the state attempts to pass Prop 56, a potentially devastating piece of legislation that attempts to steal from the vaping industry to profit Big Pharma.  If Prop 56 passes, a nearly 70% e-cig tax will take effect almost immediately, and the majority of the money will land in the hands of California insurance companies. As e-cig enthusiasts are heading to the voting booths on November 8 to choose the next President of the United States, they will also have to remember to Vote No on Prop 56.

Big Pharma wins if Prop 56 passes

Just as the FDA deeming regulations are being creatively marketed as public health legislation to end tobacco addiction, Prop 56 promises to allocate the extra tax dollars to help Californian adult smokers to quit and to reduce teen smoking rates. However, of the estimated $1.4 billion per year collected from the new tax should it be passed, only approximately 13% will be directed to these incentives.  A whopping 82% will actually go towards increasing the profits of Medi-Cal and the Insurance Companies in California, according to NoOnProposition56.com

(Related Article: BIG PHARMA, MITCH ZELLER, AND THE FDA E-CIG REGULATIONS: FOLLOW THE MONEY)

While most concerned Americans would gladly vote for a tax hike on Big Tobacco, they might actually be frightened to learn that voting for Prop 56 would simultaneously be punishing millions of citizens for choosing the 95% less harmful e-cigs over conventional tobacco cigarettes. Perhaps even more ominous, voting yes on Prop 56 essentially rewards Big Pharma, the very industry that is diligently working behind the scenes to bankrupt the entire vaping industry.  After all, e-cigs are the biggest competitor to GlaxoSmithKline’s Nicorette Gum and “The Patch,” two very profitable stop-smoking aids that are largely supported and heavily promoted by California insurance companies.

The double-whammy of over-taxation

The FDA deeming regulations begin to take effect on August 8, 2016. After this date, all retailers and manufacturers of e-cigs and vaping devices will be required to submit a Pre-Market Tobacco Application (PMTA) that costs in upwards of $1 million per product.  Now California vape shops have the additional financial worry of a possible 70% e-cig tax from Prop 56 this coming November.  Very few business owners in any industry would be able to handle such a massive double-whammy of over-taxation as this.  And Big Pharma is laughing all the way to the bank.

(Related Article: U.S. SUPREME COURT REJECTS GLAXOSMITHKLINE; FDA E-CIG REGULATIONS UNDER FURTHER SCRUTINY)


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  • Wouldnt the tax on ecig be a contradiction. Or more accurately a waste of tax dollars to write. Being that, unless the fda is stopped or overrulled, there is likely not gonna be any taxable vape stuff available in 2 years. Whats the point of even writing this legislation?

    Rob on

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