December 2022 Issue Highlights

CALIFORNIA VOTERS APPROVE FLAVORED TOBACCO BAN

SACRAMENTO, CA. —California voters have approved Proposition 31, which bans the sale of flavored tobacco products in the state.

Included in the ban are flavored tobacco products, including fruit flavors and menthol cigarettes. It also bans the sale of pods for vape pens, tank-based systems and chewing tobacco. The law exempts hookah, expensive cigars and pipe tobacco from the ban.

The California Legislature had already passed a similar ban in 2020 which was signed into law. However, the ban was suspended after Proposition 31 qualified for the ballot, putting the issue of a flavored tobacco ban in front of the voters.

The Associated Press reported that Proposition 31 passed with 76.5% of voters in favor of the ban.

Proponents of the ban included doctors, child welfare advocates and the California Democratic Party. Their campaign claimed that that flavor ban would stop teenagers from starting to smoke by making the flavor of tobacco less attractive.

The tobacco industry and the California Republican Party opposed the ban, saying it would create a black market for flavored tobacco products as well as causing a massive loss of tax revenue. The California's Legislative Analysts' Office predicted the loss in revenue to be approximately $100 million annually.

California is the second state to ban flavored tobacco products, following Massachusetts.

CFCA WITHDRAWS FROM THE EMA

SACRAMENTO, CA. —In a decision sure to draw attention and some concern from petroleum marketers across the nation, the California Fuels & Convenience Association has withdrawn from the Energy Marketers of America (formerly the PMAA), effective as of January 1, 2023.

The California marketers and retailers group had been a member of the EMA/PMAA for many decades and many Californians have served in top leadership positions for the national association. California's importance to the association was seen earlier this year when the state asked for an adjustment of its EMA dues after several major marketer acquisitions cut the CFCA's income and the EMA Board voted to approve the request.

It was not enough, however. The CFCA Board of Directors voted unanimously to "pause" its membership in the EMA in November.

CFCA President Erin Graziosi, Robinson Oil, Santa Clara, CA., explained, "We made an an evaluation of what's the best value for our members and decided to pause our membership.

"During COVID and the consolidations, we started going over all the expenses and looking at the value of our dues. A lot of our members are also members of SIGMA and NACS and were getting things from these organizations that we were not getting from the EMA."

Graziosi continued, "We believe the more voices for our industry, the better. We decided it was better to pause our membership in the EMA and look and see what happens and move forward from there."

"We're sad to see CFCA withdraw their membership for 2023," said Rob Underwood, president of the EMA. "However, CFCA EMA Director Mike Downs, with Downs Energy in Corona, CA., will remain on the EMA Executive Committee. Mike fully supports EMA's legislative and regulatory efforts in Washington, D.C. and we will continue to work with California's lawmakers including GOP Leader Kevin McCarthy next year."

Underwood continued, "EMA is proud of our accomplishments over the years to help California marketers including most recently expanding the HOS air mile radius exemption. California remains an important voice nationally and we look forward to continuing our work representing energy marketers across the country."

In an official statement, CFCA Executive Director Elizabeth Graham noted "We are grateful for all of the important work that EMA has done and will continue to do on behalf of small business retailers in California and throughout the country, and hope to maintain a collaborative relationship with EMA to achieve shared goals. CFCA will continue engaging with other national trade associations, such as NACS and SIGMA, to ensure that our CFCA members' interests are well represented on the national level."

"California is such a special place," noted Graziosi. "A lot of time we're in front of everyone else Federally. We're the canary in the coal mine. Unfortunately, what these organizations do on a Federal level isn't that important to us today because we dealt with that issue five years ago. It's kind of a tough spot. There could be better engagement.

"I really do believe we need all the voices we can get and I understand not every state agrees with everyone else on every issue," said Graziosi. "It's not a closed door. We're open to rejoining but the value has to be there for our members."

She added, "It's a changing world."

NESTE BUYS CRIMSON RENEWABLE ENERGY USED COOKING OIL BUSINESS

ESPOO, FINLAND —Crimson Renewable Energy Holdings, LLC has agreed to sell its used cooking oil collection business and related assets in the United States to Neste.

The sale includes includes shares in SeQuential Environmental Services, LLC, and Pure, LLC, as well as a used cooking oil processing plant in Salem, Oregon. Following the transaction, Neste's operations will include the collection, logistics and storage of used cooking oil in California, Oregon and Washington.

"This acquisition further strengthens Neste's presence and operations in the United States," said Matti Lehmus, president and CEO of Neste, announcing the deal. "We continue to execute our renewables growth strategy by expanding our renewable raw materials sourcing platform to the U.S. West Coast, which is also a location for our upcoming renewable diesel production joint operation in Martinez, California, and a key market for serving our customers."

Neste's 50-50 renewable diesel joint venture with Marathon Petroleum is expected to begin production in early 2023. Pretreatment capabilities are expected to come online in the second half of 2023. Martinez Renewables is expected to increase Neste's renewable products capacity by slightly over 365 million gallons per year.

"I look forward to welcoming the professional team and high-quality operations to contribute to Neste's activities in North America," said Lehmus.

"I want to thank our SeQuential team for their invaluable efforts and contribution in building a leading UCO collection and aggregation business on the U.S. West Coast," said Harry Simpson, president and CEO of Crimson Renewable Energy Holdings. "Joining Neste is a great opportunity for that team to develop its UCO business and operations further with a leading manufacturer of renewable fuels." The sale is subject to customary closing conditions and regulatory approval.

Originally published in the December 2022 issue of the O&A Marketing News.
© KAL Publications Inc. 2022