New York Gov. Kathy Hochul’s executive budget proposes applying the state’s existing 75% wholesale tobacco tax to nicotine pouches. The proposal comes as state tobacco tax revenue declined from about $1 billion in 2021 to roughly $793 million last year, while cigarette smuggling — estimated to account for more than half of cigarettes consumed in New York — costs the state about $812 million annually, according to Tax Foundation data. State health data show nicotine pouch use among New York high school students increased from 1.5% in 2022 to 3% in 2025. The tax proposal is under consideration as part of budget negotiations.
Tag: New York
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NY Gov. Vows Crackdown on Illicit Vapes
New York Governor Kathy Hochul announced plans to crack down on illegal flavored vapes by directing the state Department of Taxation and Finance to establish a Vapor Products Registry identifying which products may be legally sold in the state. Hochul said that despite state and federal bans enacted in 2020, an estimated 99% of vapes currently on the New York market are flavored and lack FDA authorization, with many manufactured in China and marketed toward youth. The registry, already used in more than a dozen states, is intended to give law enforcement clear authority to seize unlisted products, disrupt illicit supply networks, and support legitimate retailers, as agencies including the NYPD and NYC Sheriff’s Office have increasingly found illegal vapes linked to broader criminal activity.
“New York is the capital of illicit nicotine trafficking, and these illegal Chinese flavored vapes have made a bad situation even worse,” said former New York City Sheriff Edgar Domenech, who created the Big Apple enforcement strategy targeting illegal cigarette and tobacco sales under then-Mayor Mike Bloomberg. “Creating a clear vapor products registry gives law enforcement the information and transparency they need to quickly identify contraband, protect our children, and shut down bad actors who are almost always involved in dangerous, violent crime.”
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Cannabis Co. Says NY’s Seed-to-Sale Regs Create Undue Costs
Cannabis company Veterans Holdings, Inc filed a lawsuit this week in New York Supreme Court against the state, challenging its seed-to-sale tracking system, arguing it significantly increases operating and compliance costs for licensed businesses. The program, overseen by the Office of Cannabis Management, requires cannabis products to be tracked from cultivation through retail sale using the “Metrc” platform.
According to the company, and echoed by other growers and processors, the program’s tagging, reporting, and data-entry requirements sharply increase compliance expenses, particularly for smaller operators. Businesses say costs associated with mandatory tags, system integration, staff training, and ongoing reporting could erode already thin margins in the state’s developing legal cannabis market.
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NYC, Vape Companies Settle Flavor Dispute
New York City reached a settlement with two e-cigarette wholesalers accused of distributing flavored vapes in violation of the city’s ban, according to Law 360. Under the agreement, EnviroMD Group and GT Imports will stop pushing these products within the five boroughs, facing $1,000 fines for any future violations. The move comes as part of a broader crackdown by the NYC Law Department, which has filed lawsuits against multiple distributors for illegally supplying disposable flavored e-cigarettes.
This settlement is one piece of the city’s aggressive enforcement effort against flavored nicotine products. The administration has pursued both civil penalties and court orders to block sales and distribution, emphasizing its commitment to protecting youth from flavored vape devices.
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NYC Charges 12 Distributors in Largest Vape Sting in State History
New York City carried out the biggest criminal vape enforcement action in its history, resulting in more than a dozen arrests and nearly 40 criminal charges, Governor Kathy Hochul announced on September 3. The crackdown, led by the New York State Department of Health and State Police, targeted businesses accused of illegally selling and distributing vapor products across the state.
Authorities said many of the seized products were disposable e-cigarettes and flavored e-liquids that are especially appealing to youth. Some devices featured bright packaging, digital display screens, and designs resembling smartphones or video games, raising additional concerns about their appeal to minors.
Companies caught up in the operation include Shindler Distribution (Vaporush), ePuffer, Vape4Style, Beyond Vape, NYC Glass 718, Vaperdudes, and Shinnecock Vape Shop. “These companies built their business models around breaking New York’s laws and targeting our kids—now we’re holding them accountable,” Hochul said, stressing that the state will continue to pursue offenders aggressively.
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NY AG Files Lawsuit Against 12 Vape Companies
New York Attorney General Letitia James announced a lawsuit against 12 e-cigarette manufacturers, distributors, and retailers for “their role in fueling the youth vaping epidemic.” Those named in the lawsuit are Puff Bar, MYLE Vape, Pod Juice, Mi-One Brands, Happy Distro, Demand Vape, EVO Brands, PVG2, Magellan Technology, Midwest Goods, Safa Goods, and Price Point Distributors, as well as Price Point principals Weis Khwaja, Hamza Jalili, and Mohammad Jalili.
“These companies are responsible for illegally distributing, marketing, and selling flavored disposable vapes, which have become extraordinarily popular among minors,” James said in a statement. “The vaping industry is taking a page out of Big Tobacco’s playbook: they’re making nicotine seem cool, getting kids hooked, and creating a massive public health crisis in the process.”
In 2020, New York banned the sale of flavored vapor products, however, the products exploded in popularity globally in the past decade and are readily available at numerous outlets. The lawsuit seeks a “disgorgement of all revenues earned as a result of illegal activity” which would translate to hundreds of millions of dollars, as well as a permanent ban on flavored vapes in New York.
“This punitive approach undermines American entrepreneurship and ignores the public health benefits of vaping as a smoking cessation tool,” Allison Boughner, the vice president of American Vapor Manufacturers, a trade group that represents vape makers and retailers, said in a statement. “This misguided action unfairly targets legitimate American businesses that employ thousands and contribute to local economies. Our members are dedicated to offering adult smokers safer alternatives to combustible cigarettes, supporting a mission of harm reduction backed by science and millions of successful former smokers.”
Matthew Glauser, the chief strategy officer and a co-founder of Demand Vape, one of the companies named in the lawsuit, said in a statement that the suit was “wasting New York taxpayers’ money and federal court time, which desperately need to be focused on substantive issues that truly impact our communities.”
According to the New York Times, Tony Abboud, the executive director of another industry group, Vapor Technology Association, disputed the suit’s claim that there was a youth vaping epidemic and called on President Trump “to take bold and decisive action to end the government lawfare against the flavored vaping industry.”
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N.Y. Lawmakers Want to Ban Zyn for its Flavors
New York lawmakers have introduced a bill in the legislature that would ban flavored oral nicotine pouches such as Zyn, which recently received FDA approval. The pouches do not contain tobacco and are the fastest-growing product on the U.S. tobacco market, but lawmakers are comparing their flavors to flavored vape cartridges that were banned in the state in 2020 because they are attractive to children.
“You always have to keep on top of this industry,” said Assemblywoman Linda Rosenthal, who is sponsoring the bill. “Because as we extinguish some of the availability to youth in particular, the industry comes up with more ways to entice people to be addicted to nicotine and their products.”
The legislation — which is sponsored in the Senate by state Sen. Brad Hoylman-Sigal — asserts that minors could turn to nicotine pouches as flavored vapes become harder to find under New York’s ban.
Zyn is manufactured by Swedish Match, a subsidiary of Philip Morris International, which maintains that Zyn is intended and marketed only for those 21 and older, and that the vast majority of Zyn’s clientele are not new nicotine users, but adults switching to a safer delivery method.
“Almost everyone has come from another product,” Brian Erkkila, Swedish Match’s director of regulatory science, said. “That’s who the product is designed for. If you think about the flavors our product comes in, they come in flavors that have been in smokeless tobacco products like moist snuff and dip, for decades. These aren’t new flavors. They’ve been around for a long time.”
Alan Mathios, a professor at Cornell University who studies the economics of tobacco regulation, called the potential ban shortsighted and said it could lead to the proliferation of illicit products, make the market more difficult to regulate, and have the opposite result in terms of keeping them away from underage users.
“A lot of menthol smokers really like their menthol,” Mathios said. “If they don’t have an alternative menthol product, they’re unlikely to move away from cigarettes. So even if you do see some youth movement into menthol-flavored pouches, you have to weigh that against the role that menthol-flavored products play in helping adults switch.”
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BAT Moving Listing Would be ‘Distraction’
BAT CEO Tadeu Marroco dismissed the idea of moving the company’s listing to New York from London, stating that it “would create a lot of distraction internally,” according to the Financial Times. Marroco also noted that he wasn’t sure “the benefit would be as evident as some suggest.”
In 2023, Rajiv Jain, chair and chief investment officer of U.S. investment group GQG Partners, which at its peak owned 4 percent of BAT stock, urged BAT to switch its primary listing to the U.S. Jain argued that Philip Morris International, which GQG Partners also owns a stake in, trades at a much higher earnings multiple.
GQG Partners sold out of BAT in July 2023 due to BAT’s refusal to move its listing.
Marroco said in regards to the possibility of moving the company’s listing, “I don’t think that in this period of time, we should be focused on this.” He noted that he has “many other things” he needs to do and that “There is nothing to suggest that … it’s a no-brainer to go to the U.S.”
While Marroco acknowledged that London’s capital markets are struggling to attract and retain listings, he noted that there are advantages to staying in the U.K.
“If you have a shareholding of a U.K. [listed company] and you are located outside, you don’t pay withholding tax on your dividends, which is different from the U.S.,” he said.
“Hopefully, we can see that in 10 years’ time, we don’t have this type of discussion. Today, there’s a lot of emotion that relates to it because of the frustration of some that are leaving.”
BAT recently announced a sale of part of its stake in ITC to restart BAT’s share buyback program. “What’s most important for me is that having restarted the buyback, this should be a consistent feature in terms of our capital allocation,” said Marroco.
“We have a massive business in the U.S. that we can use to sell [new products],” he said. BAT’s U.S. cigarette sales have fallen, driven by consumers switching to cheaper brands and cigarette alternatives such as heated-tobacco products. By 2035, BAT aims to have 50 percent revenue from alternative products.
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Distributors Accused of Racketeering
Credit: Vitalii Vodolazskyi New York City has filed a lawsuit in federal court charging four vaping product distributors and six persons associated with the companies for illegally selling flavored vaping products other than tobacco in the city. It is possible more companies will be added to the suit.
The civil lawsuit, filed Monday in the U.S. District Court for the Southern District of New York, claims the defendants violated “nearly every federal, New York State and New York City law applicable to the marketing, distribution, and sale of flavored e-cigarettes, the sales of which are prohibited under laws enacted by all three jurisdictions.”
Named in the suit are Magellan Technology Inc., Ecto World LLC (Demand Vape), Mahant Krupa 56 LLC (Empire Vape Distributors) and Star Vape Corp. Also named were Matthew Glauser, Donald Hashagen, Russell Rogers, Nikunj Patel, Devang Koya and Nabil Hassen. The suit also mentions Puff Bar, Elf Bar and Hyde products, however, those manufacturers were not named in the suit.
The lawsuit alleges the defendants committed mail and wire fraud, alongside violations of New York City’s Administrative Code, New York State Public Health Law, and the federal Tobacco Control Act. The city also accuses the companies of violating both the federal Racketeering Influenced Corrupt Organizations (RICO) Act and the Prevent All Cigarette Trafficking (PACT) Act.
The suit centers on disposable flavored vapes. However, the suit alleges that is seeking relief for any type of flavored e-cigarette product on the market. This would suggest the suit could grow into anyone entity that has sold flavored vaping products in the city.
“Although this action speaks principally about (flavored disposables), the favorite type of electronic nicotine delivery system among youth and the most intentionally directed to that market, the City seeks relief for defendants’ violation of laws applicable to e-cigarettes regardless of the type of device with which the violation is committed,” the suit states. “Any non-FDA approved [the FDA authorizes for marketing; it does not approve products] e-cigarette containing a flavored e-liquid is governed by the laws under which the City’s claims are brought and the City seeks relief with respect to all such devices.”
The city says it “seeks to recover monetary damages and civil penalties from the defendants, potentially totaling millions,” according to a press release. The suit also alleges the sales of disposable flavored vapes created a youth use crisis. The suit alleges the largest increase in youth use ever. The claim is unsupported by any facts.
“By distributing devices that provide larger than normal doses of nicotine in a mild aerosol formulated to reduce or eliminate the harshness of burning tobacco and tasting pleasantly of fruit, candy or desserts, [flavored vaping device] manufacturers and distributors have triggered the largest increases in youth nicotine use ever seen,” the suit claims.
The lawsuit states the city will seek triple the damages awarded at trial under the RICO guidelines.
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Black Activists Split on Menthol Ban
Photo: New Africa Black activists in New York are split on whether a menthol ban will be beneficial or harmful to the community, reports Gothamist.
One group, consisting of family members of those killed by police, including George Floyd’s brother and sister-in-law and Eric Garner’s mother, Gwen Carr. Garner was killed by police on Staten Island who were enforcing cigarette regulations.
“My son was a victim because allegedly he was selling ‘loosie’ cigarettes,” Carr said. “That’s what they’re going to do when they ban these cigarettes.”
“No more victims and no more violence,” she said, “and no ban on the menthol cigarettes.”
Another group gathered 30 minutes later and a block away supporting the ban. The group consisted of 40 clergy leaders and activists as well as Hazel Dukes, president of the NAACP New York State Conference and former president of the National NAACP.
“Our children are dying. Our kids think menthol is great. They think it’s bubblegum,” Dukes said. “Big Tobacco, you are getting out of our community.”
The proposed ban would expand current measures to include menthol-flavored products; a city council bill has been sponsored by 20 members and a state proposal from Governor Kathy Hochul is up for a vote.
According to New York public health officials, half of all adult smokers use menthol cigarettes, 86 percent of Black smokers smoke only menthol cigarettes, and 72 percent of Hispanic smokers smoke only menthol cigarettes. Black and Hispanic smokers make up a disproportionate number of smoking deaths in New York, according to state and federal data.
“Prohibition doesn’t work,” said Sylvia Miranda, executive director of the National Latino Officers Association. “The best way is through a medical model, not a criminal model.”
Supporters of the ban say it would specifically target retail sales and not personal consumption while critics fear the ban would ramp up policing in Black communities.
“Contrary to what the opposition is saying, read my lips: NYPD will not be involved,” said Council Member Rita Joseph, the main sponsor of the city council bill banning menthol-flavored tobacco products.