The Road To Criminalizing Tobacco Product Users

Carl V. Phillips | Contributor

While much of the world has realized the wisdom of harm reduction for illicit (and, increasingly, decriminalized) drugs, tobacco control is pushing in the opposite direction. Tobacco control opposes the promotion of low-risk substitutes for smoking, primarily because these are a bigger threat than smoking to their real agenda, which is not about consumer welfare or even health. The first principle of harm reduction is to not create additional harm. Among other things, this means not criminalizing people who use a product or forcing them to use potentially poor quality black-market products. This month, the U.S. FDA released two proposed rules — banning flavors in e-liquid and possibly other products and removing the nicotine from cigarettes (which might include a side-effect of banning refill e-liquid altogether) — that would set us on the course to exactly such criminalization and harms from black markets.

Banning well-liked flavors will inevitably result in a cottage industry in do-it-yourself flavoring, as previously described, along with a market for commodity-priced unflavored e-liquid to use for that. This alone poses a small risk of harm-creation. Safely mixing e-liquids is fairly trivial, as evidenced by the lack of recorded instances of an acutely-harmful batch hurting someone. But once flavor mixing becomes a widespread home-brew hobby, the chances of bad outcomes increase. It is easy to imagine one of the teenagers that the flavor ban is supposed to “protect” deciding it might be fun to distribute some e-liquid flavored with, say, habanero pepper. Worse, someone will probably try using ethylene glycol antifreeze as an e-liquid base, thanks to tobacco controllers’ efforts to conflate the two.

There are other disturbing scenarios that can also be imagined, but these are nothing compared to what happens if all e-liquid sales are banned. Flavorable e-liquid will come from reliable high-quality sources so long as it is legal or almost legal (that is, violating FDA regulations only because it is technically “new,” since the manufacturer did not sell that exact product configuration prior to August 2016). But it could become strictly illegal as a result of the low-nicotine cigarette rule (if the rule ends up banning products that can be used to add nicotine to cigarettes), or simply because all open-system vapor products are banned in 2022 as currently planned. At that point people will inevitably still be able to buy e-liquid, but only from a typical underground drug market with all its downsides. In addition, it might prove easier to buy pure nicotine, which might remain legal and is needed only in volumes that are much easier to smuggle, and mix it into legal carrier chemicals. This introduces more room for error.

Some responsible vape product manufacturers will go underground, but black markets also attract a wide array of unscrupulous manufacturers and distributors. Black marketeers depend on personal reputation to some extent, but they do not have nearly as much invested in brand equity as normal companies. Indeed, building too much of a good reputation or brand equity invites targeted enforcement action. The need to remain relatively untraceable eliminates the incentives created by potential civil liability. Insurance and quality auditors are certainly out of the question. These factors add up to a dramatic increase in the risk that a batch of e-liquid will be poor quality, potentially to the point of being poisonous. A large portion of those “overdoses” of illicit drugs reported by the mainstream media are actually the result of consumers using a product that differed chemically from what they believed they had purchased.

If the nicotine is removed from legal cigarettes, the infrastructure for a huge black market will quickly arise. There is already a substantial grey market (a tax-evading market for what is otherwise a legal product). For example, it is estimated that about half the cigarettes sold in New York are grey market. The demand for cigarettes that are not merely cheaper but also of much higher quality than those legally available (i.e., they contain nicotine) will obviously be greater still. The supply chains will have to change since most current smuggling is simply a crew running a truckload from a low-tax state to a high-tax city or state. Some of the efficiency of the legal manufacturing and distribution system — and the grey market that piggybacks on it — will be lost, probably resulting in higher prices, though perhaps still cheaper than legal products in high-tax jurisdictions. As with e-liquid, product quality will suffer when unscrupulous or poorly skilled illegal manufacturers enter the market (though the major cigarette companies might look the other way when demand for their premium brands in some Caribbean nations mysteriously increases a hundredfold). In some cases, the lower quality will consist of potentially hazardous ingredients.

There are other unfortunate effects of underground markets. The lack of legal protections means that violence is necessary to enforce contracts and protect against theft. This usually spills over into using violence to try to create monopolies. This will further degrade the quality of the market since the natural selection will favor willingness to use violence rather than quality of products.

So far this story is only about the harms inevitably caused by driving markets underground. Enforcement efforts further increase the costs.

The supply chain will inevitably become the target of costly criminal enforcement actions. Should the bans take effect, the market for illegal cigarettes along with the associated market for illegal e-liquid would be comparable in size to the market illicit drugs. The enforcement effort would also need to be comparable in scope. The FDA is accustomed to enforcing its regulations by sending a couple of unarmed inspectors to a facility that has a permanent address and reasonably cooperative personnel, then by observing their practices or records.

The FDA and its supporters seem to have no idea that they are proposing doubling the size of the War on Drugs, a war that is increasingly recognized as terrible mistake. A professional street-level dealer of illicit tobacco products would probably net a few dollars for selling a day’s worth of product, as would the upstream suppliers. (The exact amount is difficult to predict. It depends on the efficiency of supply chains, the risk premium which will depend on enforcement efforts and punishments, and the degree of local monopolization.) Based on estimates from a source familiar with the illicit drug market in New England, this would probably be somewhere between one-tenth and one-third of the net for a full-time professional dealer selling a day’s worth of opioids at a major distribution hub. While the margins are lower, the market is larger, so absent serious enforcement efforts, the tobacco product market would entice a lot of experienced and talented labor away from the illicit drug market, and attract new labor. The current limited enforcement efforts against the cigarette grey market, let alone FDA-style enforcement, would do little to discourage black marketeers. A substantial and militarized enforcement effort would be needed to make much of a dent in the market.

The harm from criminalization only begins there. Frustration about the inevitable failure of supply interdiction efforts, along with resentment that penalties are merely for technical violations of FDA regulations and perhaps tax evasion, will inevitably lead to draconian punishments for suppliers. But most “dealers” who are caught and imprisoned as a result of the current War on Drugs are not professionals. Many are consumers who are reselling part of their supply to cover some of their costs. Other “dealers” are just someone who picks up an order of product for their friends, for convenience, and gets reimbursed. In the case of vaping, the “dealers” subject to draconian punishment will include vapers who home-brew some e-liquid and share it with their friends. The laws could expand so that merely making it for oneself is subject to the same punishment.

The criminalization will not end there. The FDA’s regulations would only criminalize sales, not possession. But governments tend to get very frustrated when the populace sides with the “criminals” rather than the laws. This frustration usually simmers for a while before there are demands to punish consumers. For tobacco products, though, the simmering phase might be quite brief due to tobacco controllers’ already extant hatred of consumers for choosing to not take their advice. Tobacco controllers will go ballistic when consumers flout the new laws and openly talk about their homebrewed e-liquid and black market cigarettes on social media (tobacco controllers refuse to communicate with consumers, or else they could also witness this in person). The general public will be sold the story that that these consumers should be punished for supporting a dangerous criminal black market, ignoring the fact that the black market was only recently created by the prohibitions and was never what consumers wanted.

As with most criminalization of drug possession, enforcement will be a low-priority. Checking cigarettes or e-liquid for nicotine would require probable cause for arrest (banned products cannot be distinguished from legal ones at a glance), confiscation, and lab work. Checking for illicit flavors poses a particularly interesting challenge. Thus, as with the rest of the War on Drugs, enforcement actions would mostly be a way to harass people that law-enforcement does not like, which in this case would include vocal opponents of FDA policy. Still, as with other drugs, thousands of law-abiding people whose only “crime” is exercising control over their own bodies will be sentenced and also suffer the costs of having a criminal record.

All for their own good, of course.

To those not familiar with the relevant history and actors, this unfolding might sound like a crazy story, spinning a starting point out to its most extreme possible implications. But we have seen it before with almost every prohibited popular drug, and tobacco controllers are at least as rabid as other drug warriors, and far better funded from the start. It is possible that the FDA and other tobacco controllers might be satisfied with hurting the legal vapor product and cigarette suppliers and let consumers merely suffer the costs inherent to underground markets. But that is not how such affairs usually play out.

The FDA is pursuing a policy that is as anti-harm-reduction as seems possible. On the product technology side, they have always opposed low-risk alternatives. Now they are seeking to keep the harm from cigarettes but eliminate what most users like most about them. By banning vapor products and proper cigarettes, they are violating people’s rights to informed autonomy, another pillar of harm reduction and basic human rights. And whether they intend to or not, they are starting down a path that will almost certainly cause a great deal of additional harm.

Harm reduction is increasingly recognized as a simple corollary of the most basic human rights, but tobacco controllers seek to pervert the very notion of human rights in their fight against it. The FDA, along with their backers and puppet masters, are attempting a similar Orwellian perversion of the concept of harm reduction. They actually claim that these are pro-harm-reduction policies.

This should not be too shocking. Tobacco controllers are cut from the same twisted cloth as those who ban distribution of clean syringes and safe-use sites, who forbid drug analysis services that let people know exactly what they are taking, and who during alcohol Prohibition poisoned industrial ethanol with methanol because it was being diverted to drinking. It turns out that most people do not like to be “protected” from their own conscious choices by the use of force. When those who favor using force discover this, they inevitably try to make those people suffer terribly for their refusal to be grateful.

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Carl V. Phillips

Contributor

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