San Francisco Approves Ban On Menthol Cigarettes And Flavored E-cigarette Liquids
- Jun 22, 2018 -
  • San Francisco residents overwhelmingly voted to uphold a ban on all flavored tobacco.

  • R.J. Reynolds, the maker of best-selling menthol cigarette brand Newport, poured more than $11.6 million into a campaign to fight the move.

  • Skepticism on e-cigarette flavors has increased as Juul, a sleek e-cigarette, has become popular with teenagers across the nation.

Angelica LaVito@angelicalavito

Published 11:10 AM ET Wed, 6 June 2018  Updated 11:53 AM ET Wed, 6 June 2018CNBC.com






This May 17, 2018 photo shows packs of Kool menthol cigarettes displayed with other tobacco products at Ted's Market in San Francisco.

Jeff Chiu | AP

This May 17, 2018 photo shows packs of Kool menthol cigarettes displayed with other tobacco products at Ted's Market in San Francisco.

San Francisco residents overwhelmingly voted to uphold a ban on all flavored tobacco, including menthol cigarettes and flavored e-cigarette liquids.

The city's supervisors approved the measure last summer, but tobacco giant R.J. Reynolds and a coalition of businesses and industry associations challenged it. Nearly 70 percent of voters supported the ban, according to San Francisco's election results.

Tuesday's vote ends a campaign that pitted Big Tobacco against former New York mayor and billionaire philanthropist Michael Bloomberg and public health groups. R.J. Reynolds, the maker of best-selling menthol cigarette brand Newport, poured more than $11.6 million into the effort. Bloomberg donated $1.8 million of the $2.3 million raised by supporters of the ban.

The results could spark momentum for other cities to pursue similar legislation. At the very least, it is a reminder of the growing scrutiny around the role flavors play in attracting people to tobacco and nicotine products.

"San Francisco's groundbreaking law stands – and will stop the tobacco industry from targeting kids, African Americans and other populations with menthol- and candy-flavored products, as the industry has done for far too long," Campaign for Tobacco-Free Kids President Matthew Myers said in a statement. "The San Francisco vote gives a powerful boost to growing efforts around the country to end the sale of flavored tobacco products."

In a statement, Bloomberg said the vote marks "an important step forward" for public health in San Francisco and shows the tobacco industry can be defeated, no matter how much money it spends.

A spokesman for R.J. Reynolds said the vote is a "setback" for harm reduction efforts. E-cigarette makers and even the Food and Drug Administration have adopted the idea that these products can be used to switch adult smokers onto nicotine alternatives that are potentially less risky than smoking conventional cigarettes.

However, critics question whether fruity flavors like creme brulee and mango really appeal to adults who are used to tobacco flavor. Skepticism has increased as Juul, a sleek e-cigarette, has become popular with teenagers across the nation.

Opponents have called on the FDA to limit the use of flavors. The agency said in March it will consider the role they play in helping adult smokers quit smoking cigarettes and attracting teens to e-cigarettes.

Buffett's investing basics. Warren Buffett outlines the main investment principles he practices.

Learn More

This is the bigger potential risk for tobacco stocks, Wells Fargo analyst Bonnie Herzog wrote Wednesday in a note to clients. Herzog thinks a federal menthol ban is "extremely unlikely" but something for the industry to watch.

Menthol represents about 35 percent of the total industry's cigarette volume, Herzog said. British American Tobacco, which acquired R.J. Reynolds last year, and Altria have leading shares in the space.

In the meantime, other communities may follow San Francisco's lead. California neighbor Oakland approved a similar ban in September that's scheduled to take effect this year. New Jersey lawmakers drafted legislation of their own earlier this year that would prohibit menthol cigarettes.