Since their introduction to the U.S. market in 2007, e-cigarettes and vaping devices—tobacco harm reduction products that are 95 percent safer than combustible cigarettes—have helped more than three million American adults quit smoking.
1. Economic Impact
According to the Vapor Technology Association, in 2018, the industry created 271 direct vaping-related jobs, including manufacturing, retail, and wholesale jobs in South Dakota, which generated $71 million in wages alone. Moreover, the industry has created hundreds of secondary jobs in the Mount Rushmore State, bringing the total economic impact in 2018 to $220,537,500. In the same year, South Dakota received more than $8 million in state taxes attributable to the vaping industry. These figures do not include sales in convenience stores, which sell vapor products including disposables and prefilled cartridges. In 2016, sales of these products in South Dakota eclipsed $3 million.
2. State Health Department Data
Since November 2019, the South Dakota Department of Health (SDDH) is reporting 13 cases of vaping-related lung illnesses. Patients range in age from 16 to 44 years-old. There is no other data available including median age, gender, and substances vaped. This is alarming because many state health departments have already linked vaping-related lung illnesses to the use of products containing tetrahydrocannabinol (THC) and provided this information in their own updates. The Heartland Institute gives SDDH a grade of F for information available on vaping-related lung illnesses.
3. More Information Needed
The most recent report on youth e-cigarette use in South Dakota is from the 2015 South Dakota Youth Risk Behavior Survey. According to the survey, in 2015, only 2.3 percent of South Dakota high school students reported daily vapor product use. Unfortunately, South Dakota did not have weighted data in 2017 to participate in that year’s survey. More data is needed to not only determine youth vapor product use in South Dakota, but to also understand the effects of public health campaigns on youth e-cigarette use.
4. Youth Sales Miniscule
From January 1, 2018 to September 30, 2019, the U.S. Food and Drug Administration (FDA) administered 649 tobacco age compliance inspections in South Dakota, in which the agency used a minor in an attempt to purchase tobacco products. Of those, 128, or 19 percent, resulted in a sale to a minor. Of the violations, seven (5 percent of violations and 1 percent of all compliance checks) involved the sale of e-cigarettes or vaping devices. The number of violations involving sales of cigars and cigarettes were 16 and 102, respectively, during the same period.
5. Misspent Money
In 2019, South Dakota received an estimated $86.9 million in tobacco taxes and tobacco settlement payments. In the same year, the state spent only $4.5 million, or 5 percent, on funding tobacco control programs, including education and prevention.
Electronic cigarettes and vaping devices have proven to be tremendous tobacco harm reduction tools, helping many smokers transition away from combustible cigarettes. Despite recent fearmongering, their use is significantly safer than traditional cigarettes, as noted by numerous public health groups including the Royal College of Physicians, Public Health England, and the American Cancer Society. Rather than restricting their use, and undoubtedly reducing public health gains and millions of dollars in economic output, lawmakers should dedicate existing tobacco funds on programs that actually reduce youth use.
1. South Dakota’s vaping industry provided more than $220 million in economic activity in 2018 while generating 271 direct vaping-related jobs. Sales of disposables and prefilled cartridges in South Dakota exceeded $3 million in 2016.
2. Since November 2019, SDDH has reported 13 cases of vaping-related lung illnesses. SDDH does not give any information on substances vaped. SDDH earns an F for its reporting on vaping-related lung illnesses.
3. In 2015, only 2.3 percent of South Dakota high school students reported daily e-cigarette use. More data is needed.
4. Only 1 percent of FDA retail compliance checks in South Dakota resulted in sales of e-cigarettes to minors from January 1, 2018 to September 30, 2019.
5. South Dakota spends very little on tobacco prevention. In 2019, South Dakota dedicated only $5.8 million on tobacco control, or 10 percent of what the state received in tobacco settlement payments and taxes
 Vapor Technology Association, “The Economic Impact of the Vapor Industry SOUTH DAKOTA,” 2019, https://vta.guerrillaeconomics.net/reports/4ee3de70-83ee-491b-872c-deec0621f556?.
 Teresa W. Wang et al., “National and State-Specific Unit Sales and Prices for Electronic Cigarettes, United States, 2012-2016,” Preventing Chronic Disease, Centers for Disease Control and Prevention, August 2, 2018, https://www.cdc.gov/pcd/issues/2018/17_0555.htm.
 South Dakota Department of Health, “South Dakota Information,” Outbreak of Lung Disease Associated with E-Cigarette Use, or Vaping,” January 14, 2020, https://doh.sd.gov/news/ecigarettes.aspx. Accessed January 16, 2020.
 Centers for Disease Control and Prevention, “High School YRBS South Dakota 2015 Results,” 2015, https://nccd.cdc.gov/youthonline/App/Results.aspx?LID=SD.
 U.S. Food and Drug Administration, “Compliance Check Inspections of Tobacco Product Retailers,” September 30, 2019, https://www.accessdata.fda.gov/scripts/oce/inspections/oce_insp_searching.cfm.
 Truth Initiative, “Tobacco use in South Dakota,” June 28, 2019, https://truthinitiative.org/research-resources/smoking-region/tobacco-use-south-dakota-2019.
 Royal College of Physicians, Nicotine without Smoke: Tobacco Harm Reduction, April 2016, https://www.rcplondon.ac.uk/projects/outputs/nicotinewithout-smoke-tobacco-harm-reduction-0.
 A. McNeill et al., “Evidence review of e-cigarettes and heated tobacco products 2018,” Public Health England, February 2018, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/684963/Evidence_review_of_e-cigarettes_and_heated_tobacco_products_2018.pdf.
 The American Cancer Society, “What Do We Know About E-Cigarettes?” June 19, 2019, https://web.archive.org/web/20190806152535/https://www.cancer.org/cancer/cancer-causes/tobacco-and-cancer/e-cigarettes.html.
For more information, please refer to:
Tobacco Harm Reduction 101: A Guidebook for Policymakers
This booklet from The Heartland Institute aims to inform key stakeholders on the much-needed information on the benefits of electronic cigarettes and vaping devices. Tobacco Harm Reduction 101 details the history of e-cigarettes, including regulatory actions on these products. The booklet also explains the role of nicotine, addresses tax policy and debunks many of the myths associated with e-cigarettes, including assertions about “popcorn lung,” formaldehyde, and the so-called youth vaping epidemic.
Nothing in this Policy Tip Sheet is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this and other topics, visit the Budget & Tax News website, The Heartland Institute’s website, and PolicyBot, Heartland’s free online research database.
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