Vermont enacted sweeping changes to its tobacco and nicotine regulatory framework, effective July 1. The legislation expands statutory definitions to include “tobacco substitutes” and significantly increases licensing costs, with tobacco license renewal fees rising from $110 to $1,000 and tobacco substitute endorsement fees increasing from $50 to $1,000.
The law also raises civil penalties and prohibits the marketing, branding, labeling, advertising, distribution, or sale of tobacco products or tobacco substitutes that imitate non-tobacco consumer products, a measure aimed at reducing youth appeal.
Under the new tax structure, tobacco substitutes containing less than 5 mg of nicotine per gram will be taxed at 92% of the wholesale price, while products containing 5 mg per gram or more will face a 100% wholesale tax rate.
To strengthen enforcement, Vermont is creating a permanent Investigator position within the Department of Liquor and Lottery to oversee compliance and investigate violations related to direct-to-consumer sales and delivery of alcohol and tobacco products. The state has appropriated $160,000 from the Tobacco Litigation Settlement Fund for fiscal year 2027 to support the new enforcement role.