Oregon bill would add all nicotine to tobacco law, shift enforcement to OHA; retailers warn of economic harm

House lawmakers on Feb. 27 considered House Bill 2528, a measure to add nicotine “from any source” to Oregon’s legal definition of tobacco products, expand licensing and civil enforcement authority for the Oregon Health Authority and extend tobacco taxation and related compliance deadlines into 2027.

The bill’s sponsor presentation and agency testimony said the changes are intended to close statutory loopholes that leave synthetic and tobacco‑free nicotine products untaxed and unevenly regulated, increase protections for youth and align state rules with federal Food and Drug Administration practice. Supporters described an amendment that narrowed OHA’s rulemaking authority and a Department of Revenue timeline that would delay tax implementation until Jan. 1, 2027, to allow technical system updates.

Sarah Wiley, manager of the Tobacco Retail License Program at the Oregon Health Authority, told the committee the bill would “close a series of loopholes in Oregon tobacco regulations” and bring oral nicotine pouches and other products under the same framework that already covers inhalant delivery systems such as e‑cigarettes. Wiley said smoking remains “the leading cause of preventable disease, disability and death in Oregon,” and highlighted that the Tobacco Retail License Program’s enforcement since 2022 reduced sales to underage buyers from 26% to 14%.

Supporters said the bill would: (1) add nicotine derived from tobacco or synthesized in laboratories to the statutory definition of tobacco product; (2) replace an old criminal sales prohibition with a civil enforcement regime for retailers administered by OHA; (3) require licenses to sell cigarettes, inhalant delivery systems and smokeless tobacco (now including synthetic nicotine pouches); (4) close an online‑sales loophole by prohibiting delivery via store employees as well as independent contractors; and (5) set the operative date for tax treatment of expanded products to Jan. 1, 2027, while authorizing the Department of Revenue to prepare systems earlier.

Wiley and other public‑health witnesses emphasized the bill excludes FDA‑approved smoking‑cessation medications and said nicotine pouches are not FDA‑approved quit aids. Wiley also described a dash‑1 amendment requested by OHA that narrows the bill’s initial broad rulemaking language so that OHA may adopt only rules “necessary for the administration” of specified ORS provisions (cited in testimony as ORS 431A.175–431A.183) and would parallel Department of Revenue rule authority across the shared retail license program.

Retailers, wholesalers and trade groups formed a long opposing contingent in public comment. Owners and managers from small and regional convenience‑store chains told the committee they rigorously check IDs, train staff and comply with inspections, and argued HB 2528 would (they said) give OHA authority to enact bans — especially on flavored products — without legislative oversight. Kevin Kumar, who identified himself as a convenience‑store owner on the Oregon Coast, said the bill “would give the Oregon Health Authority the power to ban flavored tobacco products without legislative oversight” and warned of lost sales, layoffs and black‑market substitution.

Multiple retail witnesses — including convenience‑store owners, wholesalers and trade representatives — also warned that higher taxes on so‑called reduced‑risk products (for example, nicotine pouches) could push consumers back to combustible cigarettes. Jonathan Polonsky, CEO of Plaid Pantry, said his chain’s combustible cigarette sales have fallen while nicotine pouch sales rose and argued a large tax increase on those alternatives could “risk reversing the progress made.” Doug Ball, category manager for Jackson’s Food Stores, told the panel the company has treated synthetic nicotine as 21+ since 2019 and said a 2024 Oregon vapor tax was followed locally by an increase in combustible cigarette purchases.

Retail speakers repeatedly asked that decisions about bans, product restrictions and taxation remain with the Legislature rather than an agency. They raised economic concerns — higher prices for customers, lost revenue for small family stores, disproportionate impacts on minority‑owned businesses — and predicted cross‑border and illicit sales if bans were enacted, citing Massachusetts and California experiences.

Committee members sought clarifications on language and intent. Representative Shashi pressed agencies about whether the bill would permit OHA to ban products; Wiley responded that the legislature retains that authority and that the bill’s intent is to clarify OHA’s civil enforcement authority under the 2021 Tobacco Retail License Program. Wiley confirmed the amendment was added after advocates raised concerns and that the agency worked to narrow the language to reflect program intent.

No formal vote occurred during the hearing. Committee members directed procedural questions and asked that written follow‑up be submitted through the committee analyst. The public hearing drew many in‑person and online witnesses — the committee clerk noted approximately 50 people signed up to testify before the hearing closed.

The committee will decide later whether to send HB 2528 to a work session, amend it further, or hold additional briefings. Supporters framed the bill as closing regulatory gaps that leave youth exposed to novel nicotine products; opponents framed it as an overbroad shift of policy authority, a new tax burden and an economic threat to small retailers.