Big Tobacco goes big in effort to quash law banning sales of flavored tobacco products

October 14, 2020

By Phil Matier

A coalition of big tobacco companies and small retailers is paying professional signature gatherers upward of $10 a name in an attempt to put the brakes on the statewide law barring brick-and-mortar stores from selling menthol cigarettes and other flavored tobacco products.

With the Nov. 30 deadline approaching for submitting signatures to qualify the measure for the 2022 ballot, the high-dollar effort has become an interesting blend of California politics and potentially huge business profits, with a dash of coronavirus shutdown tossed in for good measure.

At issue: SB793, authored by state Sen. Jerry Hill, D-San Mateo, and signed into law by Gov. Gavin Newsom in August. Stores that break the ban on selling flavored tobacco and ecigarettes would face a $250 fine per violation.

Tobacco interests wasted no time filing the paperwork to put the law before voters in a referendum. They need 623,212 validated signatures to make the ballot. “The law goes too far and is unfair. Particularly since lawmakers exempted hookah, expensive cigars and flavored pipe tobacco,” said Beth Miller, spokeswoman for the California Coalition for Fairness, the group seeking to repeal the ban. “It will hurt small businesses and take jobs from licensed retailers who do sell tobacco products,” while still allowing for online sales, Miller said. “If the past is any indication, it will also lead to an underground market that could increase the access for minors.” Hill dismissed the pro-tobacco arguments as a smokescreen. “The goal is to keep kids from starting to smoke,” Hill said. “What 15-year-old is going to buy a $12.50 cigar or pipe tobacco? That’s ridiculous.” Hill said the coalition had another reason for launching the referendum — profit. If the referendum qualifies, the law, which is slated to go into effect in January, would be suspended until voters have their say in the November 2022 general election. And no matter what the outcome of the vote, the tobacco industry and retailers would get two more years of in-store sales until after the election. Getting the signatures of the required registered voters by the November deadline, however, is not coming cheap.

The Coalition for Fairness estimates that it will need about 900,000 signatures to ensure it has enough verified signatures to qualify for the ballot. Like most groups that place initiatives on the ballot, the Coalition for Fairness is using professional signature gatherers, those people you see carrying clipboards with petitions hawking various ballot measures outside of stores, farmers’ markets and other places people gather — or used to gather before the pandemic. But getting people to stop and sign a petition is not easy these days. And with a pressing deadline, the price per signature has gone from $3 to $4 to as high as $10 per name. Miller said she did not have the exact figure, but $10 a name was “a safe estimate.” That brings the estimated cost of just qualifying the measure to $9 million. Hill said the tobacco industry stands to “make a lot more than $9 million in the two years.” And it’s not like Big Tobacco is short on money.

According to the California secretary of state filings, the referendum drive already has a $14 million war chest courtesy of R.J. Reynolds, Philip Morris and their various affiliates. It’s not the first time an industry under threat by state lawmakers has used the referendum process to buy time and repeal a law. The plastics industry bought an extra two years with its attempt to overturn a ban on single-use plastic bags that the Legislature passed in 2014. In 2018, the state’s multibillion-dollar bail bond industry reacted to a state law to phase out the state’s cash bail system by qualifying Proposition 25, a referendum on the bail change that is on the November ballot. State Assemblyman Phil Ting said industry challenges are just one part of an initiative process that has gone wrong. “It’s unfortunate.

We originally designed a process to give ordinary citizens a say in our policymaking, but what I find is that only well-funded special interest groups have the millions of dollars you need to bring an initiative to the ballot,” he said. Hoover Institution research fellow Bill Whalen says it is all part of democracy — California style. “You basically have three choices: Go out and buy and trade lawmakers, go to court or take it to the ballot,” Whalen said. “You aren’t going to change legislators’ minds about tobacco and a court fight is long and uncertain. This is the only effective way to undo what the Legislature has done.” Or, at the very least, buy some time.