Tobacco tax increase may give lift to e-cigarettes

Setting up customers
At Smokeless Smoking's newest location in Bloomington, salesman Bobby Frie "vapes" as he sets up customers Lainne Knutson and Aaron Miller with e-cigarette supplies on Monday, June 17, 2013.
MPR Photo/Mark Zdechlik

An increase in Minnesota's cigarette tax is giving a boost to electronic cigarettes as an alternative to traditional smoking.

The number of Twin Cities shops selling the "e-cigs," as they are called, has been rising, and shop owners credit the $1.60-a-pack tax increase that goes into effect July 1 for expanding interest.

The tax increase won't hit e-cigarettes as hard as it will traditional tobacco. In addition, many advocates tout health advantages e-cigarettes have over traditional cigarettes.

Some skeptics dispute those health claims and are calling for the Food and Drug Administration to play a stronger role regulating e-cigarettes.

Electronic cigarettes became widely available in the United States in 2007, and today they come in a variety of shapes and sizes.

Some look like conventional cigarettes. Some are much larger and don't resemble cigarettes. In all of them, as a user puffs, a battery heats an element that vaporizes a liquid often containing nicotine. The user then inhales the mist, not tobacco smoke.

"Instead of smoking we say 'vaping' because it's vapor," said Sina War, a 27-year-old former web designer who opened the Uptown Vapor Shoppe in south Minneapolis in late April.

Bottles of flavors, called 'juice'
Bottles of e-cigarette flavors are called "juice," and there are endless options to choose from. This photo was taken at the Uptown Vapor Shoppe in south Minneapolis on Monday, June 17, 2013.
MPR Photo/Mark Zdechlik

War uses the products she sells, and when she inhaled, the machine vaporized an impressive cloud from a concoction of nicotine, lemonade and apple flavoring.

Like many e-cigarette stores, War's shop is a place to hang out, not just to pick up a nicotine fix. Music is playing and there are places to sit. Local art hangs on the walls. So do giant posters of glamorous 20th century celebrities smoking cigarettes.

"It's not just replacing cigarettes," War said. "It becomes more of a hobby because you can really customize your experience when using electronic cigarettes."

Although War's first store hasn't even been open two months, she opened a second location in Maplewood last weekend. Several other e-cigarette stores have popped up around the Twin Cities over the past few years, including a local chain called Smokeless Smoking with four outlets.

Lainne Knutson, a 22-year-old customer at that chain's Bloomington store, said she came from Fergus Falls, Minn., where she can't find the products Smokeless Smoking sells.

She said she recently quit smoking regular cigarettes. "It's awesome," Knutson said. "I love this stuff. I won't pick up another cigarette ever again." Sarsaparilla is her favorite flavor, she said.

Angie Griffith, the shop's co-owner, helped start the operation in 2009 at a mall kiosk in Burnsville. She opened the Bloomington location in January.

A premium e-cigarette setup
A premium e-cigarette kit on display at the Uptown Vapor Shoppe in south Minneapolis on Monday, June 17, 2013.
MPR Photo/Mark Zdechlik

"We've experienced extreme growth just since opening this last store," she said.

And Griffith credits the looming cigarette tax increase with boosting e-cigarette sales. The tax on a dose of liquid nicotine is much lower than on a dose of nicotine in a cigarette.

"A lot of customers have come in and noted that that has been their motivation because they can no longer afford cigarettes, and unfortunately a lot of times cost is a bigger motivator than health," Griffith said. "But obviously these people want to be healthier, too."

Skeptics say the problem with e-cigarettes is that no one really knows whether they're healthy. The FDA says more research is needed to assess risks and possible benefits, and it is in the process of proposing a regulation that would extend its oversight authority to include e-cigarettes. It's not clear how soon that will be ready.

The American Lung Association says the FDA should be regulating e-cigarettes right now.

"The questions about e-cigarettes go on and on and on, but in the meantime the tobacco industry has jumped in with both feet," said Erika Sward, vice president for national advocacy at the association.

"What we want to be doing is getting people off of [traditional] cigarettes, which we know is going to kill them."

"There's absolutely no oversight or regulation of these products right now, and we're really seeing a resurgence of the glamorization of tobacco products."

Sward said the way e-cigarettes are being marketed should be a concern, given the history of the tobacco industry.

"With cotton candy, bubble gum, cherry and other candy favors that are really aimed at the tried and true tobacco industry tactic of addicting kids to their products, it really is a 'parents beware' kind of moment," she said.

But e-cigarettes do seem to be safer than traditional cigarettes, said one researcher.

"I don't think I would use the word "safe" to describe it," said Boston University School of Public Health professor and physician Michael Siegel, who has researched tobacco for 25 years and has done some of the early research on e-cigarettes. "I think I would say it's safer than smoking because that's what we really need to compare it to."

Studies show that in general cigarette smokers, not people who don't already smoke, are using e-cigarettes, he said. His advice for smokers looking to quit tobacco is to first try clinically proven therapies such as nicotine patches or gum.

But if that doesn't work, he says, there's no good argument not to try e-cigarettes. He said there's a lot more scientific understanding of what's in e-cigarette vapor than there is of what is in tobacco smoke.

"Are there questions about the long-term effects of use? Well, yes," Siegel said. "There are questions about the long-term effects of almost any product. But does that mean we should encourage people not to use them until 20 or 30 years from now when we have all of the details worked out? No, I don't think so. I think what we want to be doing is getting people off of cigarettes, which we know is going to kill them."

The company that owns Phillip Morris is the latest tobacco conglomerate to get into the e-cigarette market. The makers of Camel, Newport and Kent cigarettes are also selling or developing e-cigarettes.

Bill Phelps, spokesman for the Phillip Morris subsidiary called Nu Mark, said the company's research shows about half of adult cigarette smokers are looking for alternative tobacco products.

Angie Griffith
Angie Griffith is the co-owner of Smokeless Smoking, which started at a mall kiosk in Burnsville in 2009. She now has four stores, including her newest location in Bloomington, which opened in January.
MPR Photo/Mark Zdechlik

"And the e-cigarette category is one of those groups that folks have shown some interest in," Phelps said. "So given the fact that there's been increased trial and sale of e-cigarettes to adults who currently smoke, we decided that we wanted to enter that category in a lead market in limited form in Indiana this year."

Some industry analysts say e-cigarette sales could end up outpacing sales of regular cigarettes over the next 10 years. But analyst Jack Russo of Edward Jones & Co. said it's too early to predict how that market will play out.

For one thing, regulation is a certainty, Russo said. And even if e-cigarettes are less harmful than traditional tobacco, health care experts worry about anything that entices young people to smoke.

Griffith, at Smokeless Smoking in Bloomington, is predicting growth, and she and her partners plan to continue expanding.

"We're looking at a few other spaces right now," she said, "so we hope by the end of the year to have at least a couple more lounge-style stores."

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