As the year starts to wind down and we look back on the events of the tobacco industry - it seems to be a bit of a roller coaster ride here in 2019. There's usually a lot to say about the tobacco industry each year - but this year, there's especially a lot that has happened in the consumable tobacco market.
Legislation now has it's hooks into the sides of the very lucrative tobacco industry and now controls the future of what the general public will be able to purchase for consumption.
Vaping took a major hit in 2019 with a flavor ban as lawmakers look to control the vaping industry and provide a way for consumers to be assured that they won't get sick, or possibly die from consumption. We literally watched Juul dominate the vaping market - only to be chopped off at the knees during their quick and epic rise to the top.
The natural leaf shortage has caused some slow down in production of natural leaf wrapped cigars and some analysts believe that the shortage may continue since the trend for mass market cigars is projected to go up through 2025 - especially if those countries where its currently being grown are hit with any more major storms.
All this has happened simultaneously as the market for legal marijuana is just starting to blossom. It seems like everyone has their hands in the game now. Even the same companies that manufacture tobacco products that are being banned in certain areas have considerably large stakes in the weed industry.
All the while - a possible flavor ban looms over the tobacco industry since legislators claim flavors entice youth to smoke. Honestly, several mass market manufacturers have put out several new flavors this year - (most of which should have been banned just because they were so horrible) - but some, such as Backwoods Russian Cream
- flew off the shelves leaving consumers scrambling and also saw others selling them online for three to four times the amount they were worth.
So - given all these circumstances - it leads one to think - what's the next big thing in gas station cigars??
One change you're likely to see is that wraps become more prevalent. Some cigar manufacturers have already moved into this arena. So instead of buying cigars that you have to "gut" will be sold without the tobacco filler, thus making it more convenient for anyone who fills them with their favorite replacement 'filler of choice." If sales of these grow - be sure the government will find a way to tax them, as well.
For the most part, the industry will continue doing what it's doing, with some slight changes to make the combustible tobacco market safer for consumers.
But the honest truth is - there is a large portion of the combustible tobacco market that likely won't be deterred by reports that says how bad it is for you or the grotesque labels now required on packaging of tobacco products. If you don't know that they can harm your lungs in some kind of way and have the intelligence to purchase them from a store - you probably shouldn't be smoking anyway.
So - this leads to believe that manufacturers of mass market cigars will take a knee for a moment on releasing new flavors or products that may eventually get axed by legislation. There are currently some wholesalers and retailers in Massachusetts who may soon go out of business because their local government decided to ban all flavors except tobacco and mint. Even menthol was outed. I'm sure it's the same in the other regions who have taken drastic measures to make it illegal to sell flavored tobacco products in their area.
If you look at a map that shows tobacco tax income per state
- you'll see that each state's taxes are all over the board. They differ in amounts and they differ also per item type - and the amounts each state is able to collect also differ due to smuggling across state lines. So - while it makes sense that an area that isn't making a ton off of their tobacco sales would ban it altogether.
But what about the rest of the country?? There are some states that the tobacco tax alone makes up a substantial portion of state taxes.
So - if we look at history - one could surmise that government will simply corner the industry and hopefully allow the sales of flavored cigars to continue by raising the taxes on them. There's too much at stake for the cigar industry - both mass market and premium - and as long as legislators can't determine the difference between the two - flavors should be safe for the moment.
Tobacco has been around for hundreds of years - so we at least know what we're getting into by consuming it. Take flavored products away - and it leaves a hole in the market that would need to be filled. And I'm not the smartest guy in the world - but - besides smoking and snuff and chews and vaping - are there really any other ways you can think of that people would enjoy getting their nicotine?? Shouldn't we learn from the vaping industry that it's better to consume a product that has been made in an approved, clean and safe manufacturing site than in the back utility room of retail store?
If the markets continue to move in the direction they are now - we hope that some higher taxes on our favorite products will be the result of a growing trend in the tobacco industry for years to come while manufacturers continue to make those products being sold safer for their consumers.
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