Cigarette & Electronic Cigarette An Overview

PPD 631 Geographic Information Systems for Public Policy, Planning & Development Cigarette & Electronic Cigarette An Overview Status and Trend Fall 2014

1. Background The market of electronic cigarette grows fast. According to Bloomberg Industries, with revenue from e-cigarettes expected to double this year to over $1 billion and up to $1.7 billion, the electronic cigarette makers are gradually burning away the $80 billion sales of tobacco, with e- cigarette sales predicted to surpass the traditional cigarette sales by 2047. E-cigarette poses both potential opportunities and risks to the nation s public health. Proponents claim these products provide smokers a much safer alternative to conventional cigarettes with the taste and feel of cigarettes, and thus show promise as an avenue to reduce tobacco-related death and diseases. While the critics show concern that these devices could pose unique public health harms: 1. E-cigarettes could promote dual use by serving as an alternative product in places where smoking is prohibited, 2. They could also lure young people into starting to use tobacco and lead to even more dangerous cigarette use. There is a vigorous debate about whether and how to regulate these relatively new tobacco products. FDA is reportedly preparing to regulate the electronic cigarette. While the electronic cigarette makers are putting low price tags and launching advertising campaigns. According to Citigroup s prediction, e-cigarette will have a $3 billion market segment by 2015, which already had a $2 billion market scale in 2013.

2. Conventional Cigarette General According to Centers for Disease Control and Prevention (CDC), an estimated 42.1 million people, or 18.1% of all adults in the United States, smoke cigarettes. Cigarette smoking is more common among men (20.5%) than women (15.8%). The overall smoking prevalence declined from 2005(20.9%) to 2012(18.1%). Map 2.1 Map 2.1 shows the percentage by state. And if we look at the prevalence by county (Appendix 1) we can infer that four areas in the U.S. have the highest prevalence, Southern California and Arizona area, Wyoming area, New York area and Washington area (Graph 1.2).

Map 2.2 To learn more about the smoking demographics, please refer to Appendix 4 for more details. Market The consumption of cigarette in U.S. has been declining for decades. Figure 2.1 shows the consumption numbers from 2001 to 2010, which declined from 425.0 billion cigarettes to 307.2 billion, roughly 25%. There are many reasons for the decline, and two major ones among those are:

a. The increasing cost of the cigarette b. The popularity of other tobacco products Figure 2.1 The tobacco tax has been increasing constantly, and the government never stopped pushing the rate higher. For example, the tax hike signed by President Obama in 2009 increased the federal cigarette tax from 39 cents to $1.01 per pack. As a result, 3 million fewer people smoked in the following year 2010. Historically, rising taxes on tobacco products, smoking restrictions and mass media and schoolbased educational campaigns have helped push down the smoking rate, says Joshua Yang, a tobacco control researcher at the University of California-San Francisco. Especially for young smokers, the price of cigarettes is a key factor in their cigarette consumption, and according to CDC, a 10% price increase can cut 4% overall cigarette consumption in young adults.

Figure 2.2 shows the increase in cigarette tax collection from 2001 to 2010, the tax per pack tripled. Figure 2.2 While the cigarette market is shrinking, the total tobacco market seems to be more stable. The CDC reported that the cigarette consumption fell 2.5% from 2010 to 2011, but the overall drop in tobacco consumption was only 0.8% because of an increase in the sale of other smokable tobacco products like loose tobacco and cigars (the electronic cigarette was not included).

Figure 2.3 From figure 2.3 we can infer that, other tobacco product made up for the lost market of cigarette. And if we take electronic cigarette into consideration, the trend would be clearer, which we will talk more in the following part. And regarding to the cigarette tax and cost, we can take a look at Map 2.3 and 2.4 to see the current tobacco tax per pack cigarette and the average price per pack in different states.

Map 2.3

Map 2.4 Brands The conventional cigarette market is well established oligopoly market. The top three brands are Altria, Raynolds and Lorillard. Reynolds and Lorillard are planning to merge recently. Three companies together hold 82 percent of the market share.

Figure 2.4 A new Gallup poll shows the percentage of smokers who reported smoking more than a pack has declined in recent decades, which peaked at 30 percent in 1978, and below 10 percent in late 1990s. And the number of pack-a-day now is 31 percent and stayed relatively constant. According to the poll, the vast majority said they regretted ever starting to smoke (88%), and 78% said that they would like to quit. The current status and trend of the conventional tobacco shows a sign of declining cigarette use in the United States. And next we will take a look at the electronic cigarette (or vape) market, which has expanded significantly recently. 3. Electronic Cigarette

What are electronic cigarettes? Electronic cigarettes or e-cigarettes are devices that allow users to mimic the ritual of smoking a cigarette while inhaling nicotine. Instead of smoke from burning tobacco, users inhale vapor containing nicotine (with the exception of versions which claim to be free of nicotine), flavor additives, and other chemicals. When users inhale from the end of an e- cigarette, a battery-operated vaporizer heats a liquid solution into a vapor. The fast growth in market share of the e-cigarette draws the public s attention. Table 3.1 And Table 3.1 shows that the market size nearly doubled every year since 2008.

Brands By January 2014, there were 466 brands already in the US e-cigarette market, and in the last 17 months, there was an increase of 10 brands per month. The market scale of electronic cigarette grew so fast that, from 2012, the traditional tobacco giants started to muscle into the market (Please refer to Appendix 2). Lorillard bought Blu in 2012, Reynolds launched Vuse in 2013 and Altria started MarkTen in Indianna at the same time (Altria also bought Green Smoke-the largest online brand of e-cigarette). Map 3.1 shows the leading e-cigarette brands in convenience stores by zip code. Map 3.1

Sales Channels The sales channels are similar to traditional tobacco products: smoke shop, C-stores, gas station, dollar stores, etc. However, there are two game-changing channels. One is the online sales of e-cigarette, and another is the vape shops. Currently, there are over 15,000 vape stores operating in the United States and over 630 in Los Angeles area. Map 3.2 shows the general distribution of the vape stores in United States, and Map 3.3 shows the top rated vape stores on yelp. Map 3.2

Map 3.3 From the two graphs, we can tell that similar to the traditional cigarette market, the top regions of the e-cigarette market are also Southern California and Arizona area, New York area, Washington area. The difference is that the southeast and Texas area are hot in c-cigarettes. And in Los Angeles, we can infer that, most famous vape stores are near downtown area, which to some extent indicates the demographic of the e-cigarette users in Los Angeles. Bloomberg industries have predicted that the e-cigarette sales to surpass the traditional cigarette sales by 2047, and Goldman Sachs declared electronic cigarette as one of the top 10 disruptive technologies to watch.

4. Correlation Users The conventional cigarette and e-cigarette market currently only share a small portion of customers. According to some e-cigarette research group, the c-cigarette users can be identified into three groups: recreational, ex-smokers and early adopters. Recreational users and early adopters appear to keep themselves away from conventional cigarette. And compared with conventional cigarette users, the e-cigarette users are less sensitive of the price, especially the vapors, reports show that they are more willing to pay extra price for the quality and style. And also, e-cigarette users participate more in social media. Map 4.1 shows the percentage of smokers who are also electronic cigarettes users. We can see the percentage basically falls into 1.5%-3%, and those are the ex-smokers. Prediction by the industry insiders states that this portion will grow to 30%-35% in a decade.

Map 4.1 Cost Over the past few years, the conventional cigarette price have increased while e-cigarette prices have declined. In table 4.1, disposables and cartridges are sub-categories of e-cigarette.

Table 4.1 And when conventional cigarette tax rate increased, there will be fast response in the e- cigarette market. Table 4.2 and 4.3 shows the market change when Philadelphia s cigarette increased in Oct 1st, 2014. From the two tables we can learn that the tax increase will reduce the conventional cigarette s market volume and in the meanwhile give chance to e-cigarette (all data are 7-week moving average). Map 4.2

Table 4.2 Table 4.3 Advertising E-cigarette is not regulated as tobacco products currently, which means e-cigarette brands are allowed to advertise anywhere including the TV commercials. According to Legacy s report, in 2013, the e-cigarette advertisers spend 27% ($ 10.7 million) on national and local TV

commercials. And Blu, a brand holding over 40% of market share, contribute 82% of the industry s TV advertisement. (See Appendix 6) 5. Limitation Data source The hardest part is to dig for data. When I started this, I thought the data, at least the data for traditional cigarette market, would be easy to get. However, it turned out to be almost impossible to get useful data. I guess the reason is the data I need is not public data, is more about the industry and marketing data. For example, I wanted to know each state s No.1 selling brand of cigarette, or I wanted to know the new port cigarette s regional sales, I couldn t find anything on the website. And also, the data for e-cigarette is hard to get, too. But this situation was expected, the database for e-cigarette and vape still need time to grow. For example, Map 3.2, I searched vape store on google map, and clipped that image, and Map 3.3, I got the location from yelp, and geocoded the locations in the spreadsheet. Comparison and correlation I wanted to compare more about the users characteristics of two markets and find the future market trend in the long term. But the demographics are not enough to support any assumption. And another thing is about the tax per pack and smoking prevalence rate, I wanted to find some correlation between them, and I found out basically they were independent.

6. GIS Using GIS is this report is mainly to show the big picture of the national market distribution. And most of the data I gathered are state data. The tobacco use map I got from the GIS online, and Map 3.1 is from an e-cigarette industry report, which I couldn't reach the data. The methods I used in making the maps are basically joining tables to the state shape file, symbology, geocoding, and labeling. Another direction I wanted to go is to study more about the local market place of e-cigarette. For example, the distribution of vape stores in the community, population, traffic and service range. Because the macro comparison is really hard to get some conclusion, however, local study can be completed with more details. 7. Conclusion This project shows the current status and trend of two related markets: conventional cigarette and electronic cigarette. The conventional cigarette market has been declining constantly for decades. However, it is still a huge market, and nearly 20% American adults are smokers. On the other hand, the e- cigarette market is booming, and already has a market cap of around $ 2 billion. As shown in the maps and tables, the market trend of the conventional cigarette market is obvious. And the tobacco giants already started to build their own e-cigarette brands. With the cost of cigarette keep rising, the conventional cigarette consumers will increasingly move to the e-cigarette side. With the advantage in advertising and marketing channels, the potential of the e-cigarette is tremendous, however, it will take a long way to reach the market share comparable to the conventional cigarette market.

Appendix 1

Appendix 2 Source: Tobacco Control Research Group, University of Bath. August 9, 2014

Appendix 3 Source: Gallup, Citi Research, Wells Fargo, Nielsen, WSJ.

Appendix 4

Appendix 5

Appendix 6 Source: LEG-Vaporized-E-cig_Report. May 2014

STATE CIGARETTE EXCISE TAX RATES & RANKINGS Overall All States Average: $1.54 per pack Major Tobacco States Average: 48.5 cents per pack Other States Average: $1.68 per pack State Tax Rank Alabama $0.425 47th Alaska $2.00 12th Arizona $2.00 12th Arkansas $1.15 30th California $0.87 33rd Colorado $0.84 34th Connecticut $3.40 4th Delaware $1.60 22nd DC $2.50 11th Florida $1.339 27th Georgia $0.37 48th Hawaii $3.20 5th Idaho $0.57 42nd Illinois $1.98 17th Indiana $0.995 32nd Iowa $1.36 26th Kansas $0.79 36th Kentucky $0.60 40th State Tax Rank Louisiana $0.36 49th Maine $2.00 12th Maryland $2.00 12th Massachusetts $3.51 2nd Michigan $2.00 12th Minnesota $2.83 7th Mississippi $0.68 37th Missouri $0.17 51st Montana $1.70 19th Nebraska $0.64 38th Nevada $0.80 35th New Hampshire $1.78 18th New Jersey $2.70 9th New Mexico $1.66 21st New York $4.35 1st North Carolina $0.45 45th North Dakota $0.44 46th Ohio $1.25 29th State Tax Rank Oklahoma $1.03 31st Oregon $1.31 28th Pennsylvania $1.60 22nd Rhode Island $3.50 3rd South Carolina $0.57 42nd South Dakota $1.53 24th Tennessee $0.62 39th Texas $1.41 25th Utah $1.70 19th Vermont $2.75 8th Virginia $0.30 50th Washington $3.025 6th West Virginia $0.55 44th Wisconsin $2.52 10th Wyoming $0.60 40th Puerto Rico $2.23 NA Guam $3.00 NA Northern Marianas $1.75 NA Table shows all cigarette tax rates in effect now. Since 2002, 47 states, DC, and several U.S. territories have increased their cigarette tax rates more than 110 times. The states in bold type have not increased their cigarette tax since 2004 or earlier. Currently, 30 states, DC, Puerto Rico, the Northern Marianas, and Guam have cigarette tax rates of $1.00 per pack or higher; 15 states, DC, and Guam have cigarette tax rates of $2.00 per pack or higher; six states and Guam have cigarette tax rates of $3.00 per pack or higher; and one state (NY) has a cigarette tax rate more than $4.00 per pack. Tobacco states are KY, VA, NC, SC, GA, and TN. States average includes DC, but not Puerto Rico, other U.S. territories, or local cigarette taxes. The median tax rate is $1.36 per pack. AK, MI, MN, MS, UT also have special taxes or fees on brands of manufacturers not participating in the state tobacco lawsuit settlements (NPMs). The highest combined state-local tax rate is $6.16 in Chicago, IL, with New York City second at $5.85 per pack. Other high state-local rates include Evanston, IL at $5.48 and Anchorage, AK at $4.206 per pack. For more on local cigarette taxes, see: http://tobaccofreekids.org/research/factsheets/pdf/0267.pdf. Federal cigarette tax is $1.01 per pack. From the beginning of 1998 through 2002, the major cigarette companies increased the prices they charge by more than $1.25 per pack (but also instituted aggressive retail-level discounting for competitive purposes and to reduce related consumption declines). In January 2003, Philip Morris instituted a 65-cent per pack price cut for four of its major brands, to replace its retail-level discounting and fight sales losses to discount brands, and R.J. Reynolds followed suit. In the last several years, the major cigarette companies have increased their product prices by almost $1.00 per pack. The U.S. Centers for Disease Control & Prevention estimates that smokingcaused health costs total $10.47 per pack sold and consumed in the U.S. The average price for a pack of cigarettes nationwide is roughly $6.03 (including statewide sales taxes but not local cigarette or sales taxes, other than NYC s $1.50 per pack cigarette tax), with considerable state-to-state differences because of different state tax rates, and different manufacturer, wholesaler, and retailer pricing and discounting practices. AK, DE, MT, NH & OR have no state retail sales tax at all; OK has a state sales tax, but does not apply it to cigarettes; MN & DC apply a per-pack sales tax at the wholesale level; and AL, GA & MO (unlike the rest of the states) do not apply their state sales tax to that portion of retail cigarette prices that represents the state s cigarette excise tax. Campaign for Tobacco-Free Kids, June 20, 2014 / Ann Boonn For additional information see the Campaign s website at http://www.tobaccofreekids.org/what_we_do/state_local/taxes/. Sources: Orzechowski & Walker, Tax Burden on Tobacco, 2013; media reports; state revenue department websites. 1400 I Street NW - Suite 1200 - Washington, DC 20005 Phone (202) 296-5469 Fax (202) 296-5427 www.tobaccofreekids.org

MAP OF STATE CIGARETTE TAX RATES Average State Cigarette Tax: $1.54 per Pack Average Cigarette Tax in Major Tobacco States: 48.5 cents per Pack Average Cigarette Tax in Non-Tobacco States: $1.68 per Pack Guam: $3.00 No. Marianas Islands: $1.75 WA: $3.025 OR: $1.31 CA: 87 NV: 80 AK: $2.00 ID: 57 UT: $1.70 AZ: $2.00 MT: $1.70 ND: 44 WY: 60 CO: 84 NM: $1.66 SD: $1.53 NE: 64 KS: 79 OK: $1.03 TX $1.41 MN: $2.83 IA: $1.36 WI: $2.52 MO: 17 AR: $1.15 IL: $1.98 MS: 68 LA: 36 MI: $2.00 PA: $1.60 OH: IN: $1.25 99.5 WV: 55 VA: 30 KY: 60 NC: 45 TN: 62 SC: 57 AL: 42.5 GA: 37 NH: $1.78 ME: $2.00 VT: $2.75 NY: $4.35 FL: $1.339 NJ: $2.70 DE: $1.60 MD: $2.00 DC: $2.50 MA: $3.51 RI: $3.50 CT: $3.40 HI: $3.20 Puerto Rico: $2.23 Map shows state cigarette tax rates in effect as of July 1, 2014. The states that have not increased their cigarette tax rate since 2004 or earlier are marked in bold. Currently, 30 states, DC, Puerto Rico, the Northern Marianas, and Guam have cigarette tax rates of $1.00 per pack or higher; 15 states, DC, Puerto Rico, and Guam have cigarette tax rates of $2.00 per pack or higher; six states and Guam have cigarette tax rates of $3.00 per pack or higher; and one state (NY) has a cigarette tax rate more than $4.00 per pack. The state averages listed above do not include Puerto Rico (with a population larger than those in 20 states) or any of the U.S. territories (such as Guam). The major tobacco states with extensive tobacco farming and, often, cigarette manufacturing, are NC, KY, VA, SC, TN, & GA. Federal cigarette tax is $1.01 per pack. Not shown are the special taxes or fees some states place on cigarettes made by Non-Participating Manufacturers (NPMs), the companies that have not joined the Master Settlement Agreement (MSA) between the states and the major cigarette companies. Some local governments also have their own cigarette taxes, such as Chicago ($1.18), Cook County, IL ($3.00), New York City ($1.50), and Anchorage, AK ($2.206). The U.S. Centers for Disease Control & Prevention estimates that smoking-caused health costs and productivity losses total $10.47 per pack sold. Campaign for Tobacco-Free Kids, June 20, 2014 / Ann Boonn For more information on state cigarette taxes and the benefits from increasing them, see http://www.tobaccofreekids.org/facts_issues/fact_sheets/policies/tax/us_state_local/. 1400 I Street NW Suite 1200 Washington, DC 20005. Phone (202) 296-5469 Fax (202) 296-5427 www.tobaccofreekids.org

KEY STATE-SPECIFIC TOBACCO-RELATED DATA & RANKINGS Adult Pregnant Smoking Smoking State Rate* Adult Smoking Rank (1=low) Rate Youth Smoking Rate** New Youth Smokers Per Year Annual Adult Smoking Deaths (approx.) Kids Now Alive Who Will Become Smokers Kids Now Alive Who Will Die From Smoking Smoking Caused Cigarette Health Costs 2009 Tax (millions) (per pack) Cigarette Tax Rank (1 = high) FY 2014 Funding for State TC Programs (millions) All States 18.1% /// 10.7% 15.7% 270,000 480,000 17+ mill. 5.6 mill. $132.5 bill. $1.54 /// $481.2 14.6% Alabama 21.5% 39th 12.1% 18.0% 5,200 8,600 336,200 108,000 $1.88 bill. $0.425 47th $0.3 0.5% Alaska 22.6% 43rd 14.5% 10.6% 600 600 43,600 14,000 $438 $2.00 12th $10.1 99.4% Arizona 16.3% 9th 6.3% 14.1% 5,500 8,300 359,800 115,000 $2.38 bill. $2.00 12th $18.6 28.9% Arkansas 25.9% 49th 16.5% 19.1% 3,300 5,800 214,700 69,000 $1.21 bill. $1.15 30th $17.5 47.6% California 12.5% 2nd NA 10.5% 21,300 40,000 1,376,800 441,000 $13.29 bill. $0.87 33rd $64.8 18.6% Colorado 17.7% 18th 8.8% 15.7% 4,400 5,100 283,200 91,000 $1.89 bill. $0.84 34th $26.0 49.1% Connecticut 15.5% 4th 7.0% 13.5% 2,700 4,900 175,400 56,000 $2.03 bill. $3.40 4th $3.0 9.4% Delaware 19.6% 30th 12.9% 14.2% 800 1,400 53,700 17,000 $532 $1.60 22nd $8.3 64.0% DC 18.8% 23rd 3.9% 12.5% 300 800 22,300 7,000 $391 $2.50 11th $0.5 4.6% Florida 16.8% 14th 7.5% 8.6% 13,100 32,300 844,500 270,000 $8.64 bill. $1.339 27th $65.6 33.8% Georgia 18.8% 23rd 6.5% 12.8% 9,900 11,700 637,500 204,000 $3.18 bill. $0.37 48th $2.2 2.1% Hawaii 13.3% 3rd 5.9% 10.4% 1,000 1,400 67,000 21,000 $526 $3.20 5th $7.9 57.3% Idaho 17.2% 15th 10.5% 12.2% 1,400 1,800 94,300 30,000 $508 $0.57 42nd $2.2 14.1% Illinois 18.0% 19th 7.4% 14.1% 11,100 18,300 720,100 230,000 $5.49 bill. $1.98 17th $11.1 8.1% Indiana 21.9% 40th 19.1% 18.1% 7,300 11,100 471,100 151,000 $2.93 bill. $0.995 32nd $5.8 7.8% Iowa 19.5% 29th 16.5% 18.1% 2,600 5,100 172,100 55,000 $1.28 bill. $1.36 26th $5.1 17.1% Kansas 20.0% 32nd 12.7% 10.2% 2,900 4,400 191,200 61,000 $1.12 bill. $0.79 36th $0.9 3.4% Kentucky 26.5% 50th 24.4% 17.9% 5,700 8,900 371,700 119,000 $1.92 bill. $0.60 40th $2.1 3.7% Louisiana 23.5% 45th 10.0% 12.1% 4,700 7,200 307,400 98,000 $1.89 bill. $0.36 49th $8.0 13.4% Maine 20.2% 33rd 14.6% 12.8% 1,300 2,400 84,300 27,000 $811 $2.00 12th $8.1 50.7% Maryland 16.4% 10th 6.2% 11.9% 4,400 7,500 288,900 92,000 $2.71 bill. $2.00 12th $8.5 17.8% * Due to changes in CDC s methodology, the 2013 state-specific adult smoking rates cannot be compared to data prior to 2011. Pregnant smoking rate in bold type from 2005 and in regular type from 2002. Tobacco Prevention Spending % of CDC Target ** Youth smoking rates from most recent years available; in bold type from the Youth Risk Behavioral Surveillance (YRBS); in regular type from Youth Tobacco Surveillance (YTS); and in italics from state- specific su States that have not increased their tax rate since 2004 or before are in bold type. Includes deaths caused by cigarette smoking but not deaths caused by other forms of combustible tobacco or smokeless tobacco products, which are expected to be in the thousands per year. National data include 1400 I Street NW - Suite 1200 - Washington, DC 20005. Phone (202) 296-5469 Fax (202) 296-5427 www.tobaccofreekids.org Adult Pregnant Smoking Smoking State Rate* Adult Smoking Rank (1=low) Rate Youth Smoking Rate** New Youth Smokers Per Year Annual Adult Smoking Deaths (approx.) Kids Now Alive Who Will Become Smokers Kids Now Alive Who Will Die From Smoking Smoking Caused Health Costs 2009 (millions) Cigarette Tax (per pack) Cigarette Tax Rank (1 = high) FY 2014 Funding for State TC Programs (millions) Massachusetts 16.6% 11th 8.1% 10.7% 5,000 9,300 322,300 103,000 $4.08 bill. $3.51 2nd $4.0 5.9% Michigan 21.4% 38th 13.4% 11.8% 10,300 16,200 666,500 213,000 $4.59 bill. $2.00 12th $1.5 1.4% Minnesota 18.0% 19th 9.5% 18.1% 4,900 5,900 319,000 102,000 $2.51 bill. $2.83 7th $21.3 40.2% Mississippi 24.8% 48th 12.1% 17.2% 3,300 5,400 213,900 68,000 $1.23 bill. $0.68 37th $10.9 29.9% Missouri 22.1% 42nd 18.2% 14.9% 6,100 11,000 398,600 128,000 $3.03 bill. $0.17 51st $0.1 0.1% Montana 19.0% 25th 19.1% 15.2% 900 1,600 59,000 19,000 $440 $1.70 19th $5.4 37.0% Nebraska 18.5% 21st 15.4% 10.9% 1,800 2,500 118,600 38,000 $795 $0.64 38th $2.4 11.4% Nevada 19.4% 28th 10.0% 10.3% 2,000 4,100 128,700 41,000 $1.08 bill. $0.80 35th $1.0 3.3% N. Hampshire 16.2% 8th 14.0% 13.8% 1,000 1,900 67,900 22,000 $729 $1.78 18th $0.1 0.8% New Jersey 15.7% 5th 7.8% 12.9% 6,900 11,800 445,800 143,000 $4.06 bill. $2.70 9th $0.0 0.0% New Mexico 19.1% 27th 7.9% 14.4% 1,900 2,600 124,500 40,000 $844 $1.66 21st $5.9 26.0% New York 16.6% 11th 8.1% 10.6% 13,500 28,200 873,900 280,000 $10.39 bill. $4.35 1st $39.3 19.4% North Carolina 20.3% 34th 10.0% 15.0% 8,700 14,200 562,500 180,000 $3.81 bill. $0.45 45th $1.2 1.2% North Dakota 21.2% 37th 17.4% 19.0% 600 1,000 43,400 14,000 $326 $0.44 46th $9.5 97.1% Ohio 23.4% 44th 18.6% 15.1% 12,500 20,200 809,800 259,000 $5.64 bill. $1.25 29th $1.5 1.1% Oklahoma 23.7% 46th 15.7% 18.5% 4,200 7,500 275,600 88,000 $1.62 bill. $1.03 31st $22.7 53.7% Oregon 17.3% 16th 12.4% 9.4% 3,300 5,500 213,400 68,000 $1.54 bill. $1.31 28th $9.9 25.2% Pennsylvania 21.0% 36th 15.6% 18.4% 11,800 22,000 761,500 244,000 $6.38 bill. $1.60 22nd $5.0 3.6% Rhode Island 17.4% 17th 9.6% 8.0% 700 1,800 48,700 16,000 $640 $3.50 3rd $0.4 3.0% South Carolina 22.0% 41st 15.7% 16.0% 5,000 7,200 322,900 103,000 $1.90 bill. $0.57 42nd $5.0 9.8% South Dakota 19.6% 30th 19.3% 16.5% 1,000 1,300 65,700 21,000 $373 $1.53 24th $4.0 34.2% Tennessee 24.3% 47th 17.1% 15.4% 6,000 11,400 391,400 125,000 $2.67 bill. $0.62 39th $5.0 6.6% Texas 15.9% 6th 6.3% 14.1% 24,200 28,000 1,557,800 498,000 $8.85 bill. $1.41 25th $11.2 4.2% Utah 10.3% 1st 5.0% 4.4% 1,800 1,300 120,800 39,000 $542 $1.70 19th $7.5 39.1% Vermont 16.6% 11th 16.7% 13.3% 400 1,000 31,500 10,000 $348 $2.75 8th $3.9 46.4% Virginia 19.0% 25th 7.5% 11.1% 7,300 10,300 469,800 150,000 $3.11 bill. $0.30 50th $9.5 10.3% Washington 16.1% 7th 9.0% 9.5% 5,000 8,300 324,900 104,000 $2.81 bill. $3.025 6th $0.8 1.2% West Virginia 27.3% 51st 29.7% 19.6% 2,200 4,300 147,900 47,000 $1.00 bill. $0.55 44th $5.3 19.2% Wisconsin 18.7% 22nd 14.9% 11.8% 5,100 7,900 332,000 106,000 $2.66 bill. $2.52 10th $5.3 9.2% Wyoming 20.6% 35th 20.7% 17.4% 500 800 37,800 12,000 $258 $0.60 40th $5.1 60.0% Sources for Table Tobacco Prevention Spending % of CDC Target

THE COUNCIL OF STATE GOVERNMENTS June 2013 State Cigarette Tax Rates and Tobacco Tax Revenue Cigarette Tax Rates 1 Tobacco Tax Revenue 2 State Tax per pack Rank Total (in millions) Per Capita As Percent of Total Tax Revenue Alabama (a) $0.43 47 $126.15 $26.16 1.4% Alaska $2.00 11 $67.38 $92.12 1.0% Arizona $2.00 11 $319.47 $48.75 2.5% Arkansas $1.15 31 $246.98 $83.75 3.0% California $0.87 33 $895.68 $23.54 0.8% Colorado $0.84 34 $203.40 $39.21 2.0% Connecticut $3.40 3 $418.23 $116.49 2.7% Delaware $1.60 22 $120.85 $131.78 3.6% Florida (b) $1.34 27 $381.49 $19.75 1.2% Georgia $0.37 48 $227.15 $22.90 1.4% Hawaii $3.20 4 $121.97 $87.60 2.2% Idaho $0.57 42 $48.46 $30.37 1.4% Illinois (a) $1.98 16 $606.42 $47.10 1.7% Indiana $1.98 16 $465.20 $71.16 3.0% Iowa $1.36 26 $225.50 $73.35 2.9% Kansas $0.79 36 $103.64 $35.91 1.4% Kentucky (c) $0.60 40 $276.54 $63.13 2.6% Louisiana $0.36 49 $133.19 $28.94 1.5% Maine $2.00 11 $139.73 $105.12 3.7% Maryland $2.00 11 $411.43 $69.92 2.4% Massachusetts $2.51 9 $573.76 $86.33 2.5% Michigan $2.00 11 $951.32 $96.25 4.0% Minnesota (d) $1.23 29 $421.55 $78.37 2.1% Mississippi $0.68 37 $157.43 $52.74 2.3% Missouri (a) $0.17 51 $104.92 $17.42 1.0% Montana $1.70 18 $87.15 $86.70 3.5% Nebraska $0.64 38 $33.73 $18.18 0.8% Nevada $0.80 35 $102.64 $37.20 1.5% New Hampshire $1.68 20 $215.16 $162.91 9.8% New Jersey $2.70 6 $792.07 $89.35 2.9% New Mexico $1.66 21 $74.80 $35.87 1.5% New York (a) $4.35 1 $1,632.00 $83.39 2.3% North Carolina $0.45 45 $294.75 $30.22 1.3% North Dakota $0.44 46 $28.24 $40.36 0.5% Ohio $1.25 28 $843.18 $73.04 3.3% Oklahoma $1.03 32 $292.97 $76.80 3.3% Oregon $1.18 30 $255.65 $65.56 2.9% Pennsylvania $1.60 22 $1,118.96 $87.67 3.4% Rhode Island $3.50 2 $130.81 $124.55 4.7% South Carolina $0.57 42 $26.25 $5.56 0.3% South Dakota $1.53 24 $60.37 $72.44 4.0% Tennessee (a) (e) $0.62 39 $279.02 $43.22 2.3% Texas $1.41 25 $1,469.71 $56.40 3.0% Utah $1.70 18 $123.99 $43.42 2.1% Vermont $2.62 7 $80.23 $128.16 2.9% Virginia (a) $0.30 50 $192.44 $23.51 1.1% Washington $3.03 5 $470.77 $68.26 2.7% West Virginia $0.55 44 $109.62 $59.08 2.0% Wisconsin $2.52 8 $597.87 $104.41 4.1% Wyoming $0.60 40 $25.98 $45.08 1.0%