A new report highlights why prohibition doesn't work.

March 11, 2024

Bootleg cigarette smuggling is an ongoing drain on law enforcement as illicit tobacco seizures surge and state tax revenue from tobacco sales continues to plummet, according to a new report by the Massachusetts Illicit Tobacco Task Force (ITTF), the New England Convenience Store and Energy Marketers Association (NECSEMA) said.

“Despite enforcement efforts and the hard work done by the Illegal Tobacco Task Force, smuggling of untaxed tobacco products remains a significant challenge,” said Peter Brennan, executive director of the New England Convenience Store and Energy Marketers Association. “Smugglers are developing more sophisticated operations to counter the Task Force’s targeted investigations. It’s clear that the Commonwealth is struggling with enforcement.”

According to the NECSEMA, the report illustrates how the state’s ban on flavored tobacco has not only failed to curb use of these products but has created a robust market for illicit untaxed products and cross-border smuggling. The ban has cost the state nearly $150 million in lost tax revenue from legal sales since it went into effect in 2020.

“Moving flavored tobacco products out of the heavily regulated retail sales environment has been counterproductive and ineffective,” Brennan said. “While criminals rake in cash and flood the streets with contraband to fund illegal enterprises, taxpayers have lost, public health is threatened and retailers, who continue to demonstrate high rates of compliance, are left to suffer as they follow the law.”

The report also notes:

• New challenges associated with the storage and destruction of Electronic Nicotine Delivery Systems (ENDS).
• Field personnel routinely encountering or seizing untaxed menthol cigarettes, originally purchased in other states, and flavored ENDS products and cigars purchased from unlicensed distributors operating both within and outside the Commonwealth.
• A decrease of $25.2 million in cigarette excise tax collections from 2023.
• An overall decline in tobacco product revenues for the fourth consecutive fiscal year.

The report acknowledges the need for continued data collection, compliance resources and enforcement coordination to uphold state policy. This suggests ongoing challenges in effectively coordinating enforcement efforts and addressing emerging issues within the tobacco industry.

“It’s clear that criminals—including organized crime syndicates—are profiting from bootleg cigarettes and vapes, and have made contraband tobacco products a lucrative part of their racketeering endeavors,” Brennan said.

Read the full report here.