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Feb. 28, 2020, 2:23 p.m. EST

House OKs bill banning all flavored tobacco products, including e-cigarettes, but Trump promises veto

Key focus for investors ought to be an upcoming FDA deadline for e-cigarette manufacturers, analysts say

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By Victor Reklaitis, MarketWatch


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The House has backed the Protecting American Lungs and Reversing the Youth Tobacco Epidemic Act.

In a 213-195 vote on Friday, the Democratic-led House of Representatives approved a bill that aims to ban all flavored tobacco products, including e-cigarettes.

The measure, known as the Protecting American Lungs and Reversing the Youth Tobacco Epidemic Act, goes beyond the Trump administration’s recent efforts to curb youth vaping, but it doesn’t look likely to become law, with the White House promising to veto it .

“Today, the House stood up and said we will not allow Big Tobacco to prey upon our children with slick new products, purposefully designed to get kids addicted to nicotine,” said Democratic Rep. Frank Pallone of New Jersey, one of the bill’s co-sponsors and the chairman of the House Energy & Commerce Committee, in a statement.

But not all of the House’s 232 Democratic members voted for the bill. The legislation’s “menthol ban could create additional #stopandfrisk occurrences for Black tobacco users,” said Democratic Rep. Yvette Clarke of New York in a tweet explaining her vote against the measure, as she noted that she’s received letters expressing concerns about the bill from the ACLU and the mothers of Trayvon Martin and Eric Garner.

Related: Democratic congresswoman rips e-cigarette CEOs for sounding unaware of nicotine’s effects on the heart and brain

And see: Young people have moved on to a new kind of vape not covered by the flavor ban: disposables

The White House , for its part, said it objected to the legislation for reasons such as its “prohibition of menthol e-liquids, which available evidence indicates are used relatively rarely by youth.”

The bill has a “low” chance of “moving beyond the House,” said analysts at Beacon Policy Advisors in a note. “We continue to view the Food and Drug Administration’s (FDA) May 12th deadline for e-cigarette manufacturers to submit premarket tobacco applications (PMTAs) as the key focal point for investors interested in the tobacco and vaping space,” Beacon’s team wrote.

Last month, the Trump administration announced a ban on most flavored e-cigarettes popular with underage users, but with exemptions for menthol and tobacco-flavored e-cigarettes and large, tank-based vaping devices.

In addition, Washington’s year-end spending included a measure that lifts the age for buying all tobacco products, including e-cigarettes, to 21 from 18.

Earlier this month, tobacco giant Altria Group Inc. /zigman2/quotes/208895754/composite MO +0.51% took another big charge on its investment in Juul Labs Inc. and stripped down its agreement to provide services to the vaping heavyweight as it deals with the regulatory crackdowns on the e-cigarette market.

/zigman2/quotes/208895754/composite
US : U.S.: NYSE
$ 37.73
+0.19 +0.51%
Volume: 6.94M
May 22, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
8.91%
Market Cap
$70.12 billion
Rev. per Employee
$2.36M
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Victor Reklaitis is MarketWatch's Money & Politics reporter and is based in Washington, D.C. Follow him on Twitter @VicRek.

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