Robert Gehrke: How Utah lawmakers tried to keep vape shops away from schools and why it didn’t work

(Francisco Kjolseth | The Salt Lake Tribune) Robert Gehrke.

Back in 2011, the number of high schoolers using e-cigarettes was 1 in 50. By 2019, it was 1 in 8. That spike prompted alarm from Utah’s lawmakers.

Utah raised the legal age to purchase the products from 19 to 21 (which Congress enacted nationally shortly after), limited some of the fruity flavors and jacked up the tax on the products.

Studies have also shown a correlation between tobacco shops near schools and youth tobacco use, according to Braden Ainsworth, project director for the Health Department’s tobacco control and prevention.

So there has also been a push to make tobacco and vape shops move elsewhere. That effort, however, hasn’t gone as planned. Actually it has been such a disaster to the point that, as of now, it appears the shops will be able to stay put, and many have actually expanded their sales of vape products near schools.

If the state wants to force them to move, taxpayers might be on the hook for millions and millions of dollars to relocate them.

How did we end up here? Like any good story it starts with a scintillating explanation of Utah’s business licenses.

There are two kinds of tobacco licenses. Places like convenience stores and grocery stores get a general tobacco retail license that allows 35% of their sales to be tobacco or vape products. The other is a “retail tobacco specialty business,” that can sell unlimited amounts and can sell flavored vape liquids that the other stores can’t.

In 2015, lawmakers prohibited the specialty stores within 600 feet of schools, parks and churches, then expanded the setback to 1,000 feet in 2018.

Existing stores were grandfathered in, but new stores that wanted to set up shop in no-man’s land tried to straddle the line, getting a general license and using some dubious tactics — like discounting a $20 bottle of vape juice by $15 if the customer bought a plastic bracelet or T-shirt for $15. Ta-dum, under the 35% threshold!

Local governments had taken steps to try to restrict the vape shops and sales of flavored oils, but last year legislators passed HB23 limiting local government regulation, despite opposition from anti-smoking advocates. In exchange, however, the Legislature told specialty shops they had to relocate no later than Aug. 15, 2020.

The shops pushed back, insisting the state couldn’t legally force them to move. So in a special session over the summer, Senate Majority Leader Evan Vickers sponsored a bill pushing the deadline to July 2021.

The bill also gave those shops with a general tobacco license four months to get a specialty license — and 45 of them did. That’s a 40% increase in the number of speciality shops licensed by the state.

Now, with the second deadline approaching, lawyers for the vape shops have notified the Utah Attorney General’s Office they will sue if the state tries to make them move. They argue the owners have invested considerable amounts of money into their businesses and forcing them to move without compensating them for the cost of relocation and lost sales would constitute an illegal “taking.”

They’re probably right. Legislative attorneys assessed the situation and determined “there is significant risk to the state,” said Vickers, who summarized the situation as accurately as anyone could: “We keep addressing it and, frankly, we keep messing it up even more.”

So now Vickers is sponsoring SB189, which drops entirely the requirement that the shops move away from schools — and education groups like the Utah PTA and anti-tobacco advocates are not happy with how it has played out.

“All of the discussion about trying to keep school children safe, the one thing we managed to get out of [last year’s bill] is the one thing that’s being undone in this bill,” Susan Edwards, public engagement coordinator for the Canyons School District, told a Senate committee recently.

“I absolutely hate where this is going,” said Sen. Dan McCay, R-Riverton, who indicated he’d be willing to support paying the money to relocate the shops if it means protecting kids. He estimated it shouldn’t be more than a couple hundred thousand dollars for each of them and said no judge would be sympathetic to an argument from owners who say they lost tobacco sales by not being able to be next to a school.

A lobbyist for the shops that had been grandfathered in wouldn’t tell McCay how much the shops would seek in damage, but I’ve since learned the figure could be as high as $80 million.

So here’s where things stand: The vape shops, it appears, will get to keep their locations near schools. Moreover, the Legislature’s false starts spurred a 40% increase in those specialty tobacco and vape stores — meaning more sales of more types of products than when the whole would-be crackdown began. And local governments have been limited in regulating the businesses on their own.

Vickers’ bill — which got unanimous preliminary approval in the Senate on Monday — doesn’t give up completely on cracking down on bad actors. His bill tightens the prohibition on people under the age of 21 entering speciality stores and increases penalties significantly, from $1,000 on a first offense to $5,000 and a 30-day suspension of the store’s license. A second offense would be $10,000 and revocation of the license.

That’s a major hammer to bring down and it’s an appropriate step. But, frankly, it would have been a tidier way to accomplish the goal in the first place, without making the entire problem of vape shops near schools worse than it was in the first place.