Topic: Tobacco Bonds

Altria sold its US rights for the IQOS heated tobacco system to Philip Morris for $2.7 billion. This move signals a shift away from liquid-based vapes toward tobacco-based "smokeless" products. The transition is seen as a way to protect the tobacco bond market and state tax revenues which were threatened by the rise of independent vaping companies.

States like California and New York are incentivized to oppose vaping because their budgets rely on the 1998 Master Settlement Agreement with Big Tobacco. Many states sold bonds based on projected tobacco tax revenue; as smoking rates decline due to e-cigarettes, these states face financial defaults. The segment claims public health concerns are secondary to the protection of state "wallets."