Thursday, March 27, 2014

Bill Prohibiting Smoking on School Property Passes in Md. Senate

A bill prohibiting smoking on school property passed Friday with an overwhelming majority of the vote in the Maryland Senate.

The bill passed 32 to eight, and now heads to the Maryland House of Delegates.

The current law prohibits the sale or use of tobacco on school grounds. Current regulations require each local school system to maintain a tobacco-free school environment. The sale or use of tobacco in any form is prohibited by everyone, including teachers, other staff and students at all times.

Also, the current law states each school system must post notification to students, staff and the general public that school buildings and grounds are tobacco-free. Students are prohibited from possessing or using tobacco in any form on the school premises.

Further stated, smoking is prohibited in any indoor place of employment, including teacher's lounges and other private areas within the school building.

Lawmakers say the current statute does not specifically prohibit smoking on public school property. School property includes the entire school grounds, and surrounding fields.

"Smoking" means the burning of any lighted cigarette, cigar, pipe or other device containing tobacco.

If passed, any person breaking this law would be charged $50 for each violation. Also, if approved officials expect the law to take effect October 1, 2014. 

Thursday, March 13, 2014

What Should Investors Do About Reynolds American’s Rumoured Acquisition of Lorillard?

According to a recent Financial Times article, Reynolds American (NYSE: RAI  ) is considering acquiring its competitor Lorillard (NYSE: LO  ) . Notwithstanding the authenticity of this piece of news, this potential acquisition doesn't make much strategic sense.
Not for the e-cigarettes Being the first among the Big Three tobacco companies to enter the e-cigarettes space with the purchase of Blu eCigs in 2012, Lorillard now accounts for nearly half of the e-cigarette sales volumes in the U.S. While Reynolds American's potential acquisition of Lorillard will greatly expand its market share in e-cigarettes, it runs contrary to Reynolds American's current actions.
Reynolds American introduced its VUSE digital vapor cigarettes into Colorado in June 2013 and has experienced very positive feedback from consumers there. VUSE is the no. 1 ranked e-cigarette brand in the state and has achieved a market share of 61.5% as of October 2013. In fact, VUSE's market share is more than three times that of Lorillard's Blu in Colorado. With a nationwide launch planned for mid-2014, it seems premature for Reynolds American to buy Lorillard now because of e-cigarettes.
Not for mentholAnother potential reason for the purchase of Lorillard will be its market leadership in menthol, given that Lorillard's Newport is the leading menthol brand in the U.S. However, Reynolds American does have exposure to the menthol segment and is doing decently well. Reynolds American's premium menthol brand Camel Menthol has seen its market share rise from below 2% in 2010 to about 3.5% now.
On the other hand, its value menthol brand Pall Mall has also increased its market share from 8.5% in the first quarter of 2011 to about 8.9% as at the end of the third quarter of 2013. Furthermore, there remains significant uncertainty as to the degree of menthol regulation in the future.

Wednesday, March 12, 2014

Should city police respond to complaints about smoking?

A proposal to designate certain public places as smoke-free, including bus stops and possibly parks, stirred up a debate at Monday's Ann Arbor City Council meeting.
A number of council members indicated they have hesitations about adopting an outdoor smoking ordinance that could have city police officers responding to complaints about people smoking cigarettes outdoors.
Council Member Stephen Kunselman, D-3rd Ward, said his concern is people would start calling 911 to resolve "personal space disputes."
"I cannot support having our police department chasing people who are smoking cigarettes," Kunselman said.
Council Member Jane Lumm, an independent from the 2nd Ward, agreed, saying city police officers have more important things to do.
The council voted 9-2 to postpone consideration of the ordinance to April 7, when it will come back for first reading.
A public hearing will be held if the ordinance eventually advances to second reading. It's been postponed multiple times now.
The two dissenting votes came from Mayor John Hieftje and Christopher Taylor, who were ready to advance it to second reading Monday night.