Nicotine - Illicit, Bootleg, & Alternative Markets

Regulations, Laws, and Money motivate people to circumvent the rules and to seek alternative ways to get products to consumers. As lawmakers look at future regulations, they must consider the unintended consequences of those regulations. This page will attempt to track some of those consequences.

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Avoiding Taxes and bans

2020: Article: Native American Reservations a Haven for New York Vape Shops

• New York State’s 20 percent excise tax on vapor products and nearly 9 percent sales tax also do not apply to the Shinnecock and other tribes. Essentially, Silva said, patrons can spend almost 30 percent less than they normally spend, and nobody has to worry about breaking the law.

Black Market

2021: Article: Tobacco ban ends at state prisons

• Mississippi officials are hoping that lifting the ban on smoking inside prison will help curb the huge contraband trade that some inmates estimate may run in the millions.
• Officials say that name-brand cigarettes will be sold at current prices in the prisons’ canteens. Cigars and smokeless tobacco products will also be sold.
• “We all know that many of our clients are paying exorbitant prices for ‘black market’ tobacco and are smoking in their cells around other prisoners,” he said. “Providing places to smoke legally and more safely outside and using money from tobacco sales for reentry services and job training sounds like a step in the right direction to me. We’ll see how the actual implementation goes.”

2021: Press Release: CBP, FDA Seize Unapproved E-Cigarettes Worth $719,453

• Many counterfeit products are likely produced in unregulated facilities with unverified ingredients posing a serious health concern to consumers. It is especially alarming when these types of counterfeit and unapproved products find their way into the hands of children as studies indicate.

2020: Article: Native American Reservations a Haven for New York Vape Shops

• “I’m going to speculate, but I think the black market is still so significant that we’re not seeing any spillover,” he said of his solid business so far. “You would figure that we’d be stampeded. That’s not been the case.”

2020: Press Release: CBP Officers in St. Louis Seize Dangerous Vaping Pens

• The shipment was mislabeled as Air Humidifier, a common practice used by smugglers.

2020: Press Release: Baton Rouge Officers Seize Unauthorized Atomizers

• While the overwhelming majority of international trade is legitimate, there are those who attempt to exploit the industry for illicit purposes.

2019: Article: Banning flavored tobacco will create problems for law enforcement, ex-State Police leader says

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2016: Video: Black market tobacco floods Australian market

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2015: Understanding the U.S. Illicit Tobacco Market

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2020: Article: Vape law seen as boosting $10B illegal market

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Counterfeit

2020: Article: State police: Man was peddling counterfeit vape devices

• Massachusetts, USA
• He was charged with sale of electronic nicotine systems with expired registrations and with forging stamps and symbols.

2019: Video: Fake Cigarettes from Blumentritt

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Crossing Borders / Alternative Locations

2020: Article: Native American Reservations a Haven for New York Vape Shops

• Because they are members of the tribe and conduct business on their sovereign land, the New York State flavor ban does not apply.

Flavor Ban Loopholes

• NOTE: a quick google search will find thousands of blogs, articles, and videos on how to flavor off the shelf products or how to make your own products from scratch. Most of these "resources" fail to give any type of information on what flavorings should or shouldn't be used (such as don't use oily products). The information on google will tell you how to flavor cigarettes, cigars, pipe tobacco, shisha, chewing tobacco, and liquids for vapor products. We will provide a few examples below.

2020: Article: Tobacco firm’s new Rizla cards to get round 2020 menthol cigarette ban slammed by charity

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2020: Video: Turning heatsticks/cigarettes into menthol

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2020: Article: Teens find a big loophole in the new flavored vaping ban and the news has caught on fast

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2015: Video: Smoking tips how to make Cigarettes taste menthol

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2011: Video: Flavoring Shredded Tobacco

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