DENVER—Three discount cigarette manufacturers have filed a motion for a preliminary injunction against Colorado in U.S. federal court to enjoin the state from enforcing the recently approved minimum cigarette price requirement, which would raise retail cigarette prices for Colorado consumers to premium brand levels.
Earlier this month, Colorado voters approved Proposition EE to increase taxes on cigarettes and other tobacco products and create a tax for e-cigarettes and vaping products. Taxes would incrementally rise starting in 2021 through 2027. The law also set minimum price thresholds for tobacco products. For example, the minimum price for a pack of cigarettes will be $7 in 2021, increasing to $7.50 starting in 2024.
According to BusinessWire.com, the motion filed by Liggett Group LLC and Vector Tobacco Inc. both of North Carolina, and Xcaliber International Ltd. of Oklahoma, alleges that the minimum price requirement would eliminate price competition from companies selling discount cigarettes and hinder their ability to compete in Colorado.
The motion alleges that the minimum price requirement violates the Commerce Clause of the U.S. Constitution by favoring Colorado retailers’ in-state economic interests over the interests of out-of-state discount manufacturers. It also charges that the law violates the Colorado Constitution because the minimum price requirement was not properly disclosed to Colorado voters, who approved the bill on Election Day. The companies maintain that voters believed the tax increases would benefit education and other public purposes but instead will benefit retailers. Review the motion by clicking here.