House advances comprehensive tobacco bill to third reading, adds bans on deceptive vaping devices

The Vermont House moved Senate Bill 198 forward on May 14, advancing a package of updates to the state's tobacco and nicotine laws that would broaden definitions, change licensing, ban deceptive products and strengthen enforcement and reporting.

Representative Granny, speaking for the commerce committee, summarized data showing adult cigarette smoking has declined while youth vaping has increased, saying manufacturers "have set their sights on the youngest generation." The measure updates 7 V.S.A. chapter 40 to include emerging nicotine delivery systems, creates a wholesale license administered by the Department of Liquor and Lottery (DLL), and decouples certain liquor and tobacco licensing to close enforcement gaps.

Key provisions and committee changes: The bill would:
- Expand the statutory definition of "tobacco substitute" to cover vapes, pouches and other nicotine delivery products;
- Move wholesale dealer licensing oversight from the Department of Taxes to DLL, create annual wholesale fees and graduated penalties, and restrict wholesale sales to licensed wholesalers or retailers;
- Ban "deceptive" tobacco products that resemble school supplies, food items, smartphones, inhalers or video games and treat each instance of marketing or sale as a separate violation; and
- Update seizure, disposal and online-sale rules so that online shipments are allowed only between licensed in-state dealers.

Human Services changes: The Human Services committee offered a strike-all amendment that replaces some punitive juvenile penalties with rehabilitative options: minors who present fake IDs would be offered the choice of up to 10 hours of community service or participation in a nationally recognized youth tobacco cessation program. The committee also added reporting requirements directing DLL and the attorney general to submit annual enforcement and compliance reports.

Fiscal point: Ways and Means reported on fee and penalty changes, estimating fee revenue increases (approximately $125,000 per year from retail license fee changes and about $50,000 from newly assessed wholesale fees) and noting increased civil and administrative penalties; JFO did not estimate revenue from fines or AG recoveries.

Process: Committees recorded favorable straw polls and the House amended the commerce committee report in line with the Human Services recommendations; third reading of S198 on the floor was ordered by voice vote.

What happens next: With third reading ordered, S198 will return to the floor for final consideration; the bill sets staggered effective dates for different provisions, with many provisions taking effect on July 1, 2026 and certain wholesale-licensing transitions on July 1, 2027.