[UPDATE 4 September 2018: I’ve challenged people over and over, including at conferences and on twitter, to name a jurisdiction that taxes tobacco by nicotine content, and no one has.]
I was considering potency as a tax base in Laws To Tax Marijuana for a variety of reasons – mainly that it correlates with intoxication, which must be why society disfavors marijuana. (It’s more complicated than that . . .)
But marijuana is not fungible (except maybe some processed liquid products), and labs trying to measure THC, the primary intoxicant, show huge variances in results among themselves. You need a clear number to apply tax to, and those results aren’t clear enough.
Similar variances turn up for cigarettes, where the EU reports that “ISO standard 8243 provides confidence intervals which have been estimated for tar and nicotine at a level of 95%, to be ± 20% for sampling at one point in time, and ± 15% for sampling over a period of time.”
New York City once taxed cigarettes by tar and nicotine content once with a step-based tax, i.e., with cliffs adding on extra taxes of either three or four cents, but that experiment flopped. From this web site http://legacy.library.ucsf.edu/tid/gpl33b00/pdf?search=%22new%20york%20nicotine%20tax%22 I pulled down this document describing the tax during its brief life. New York Nicotine Tax
Does anyone try that now? [UPDATE, 5 JUNE 2017: I’ve been asking for current nicotine taxes since 2013, and haven’t heard of one yet.] Beyond the issue about inhaling combustion products, these products (tobacco and marijuana) are not fungible enough for precise taxation. That’s my opinion. I like potency best in theory, so I hope I’m wrong.
UPDATE: See later posts on this blog by searching for potency.
More sources, all but the first dealing with tobacco:
— The Tar and Nicotine Tax: Pursuing Public Health Through Tax Incentives
William Drayton, Jr.
The Yale Law Journal
Vol. 81, No. 8 (Jul., 1972), pp. 1487-1516
The constituents to be reported in mainstream and sidestream smoke are ammonia, aromatic amines, benzo[a]pyrene, selected volatile carbonyls, hydrogen cyanide, mercury, toxic trace metals, nitric oxide, TSNAs (tobacco-specific nitrosamines), selected basic semi-volatiles, phenolic compounds, tar, nicotine, carbon monoxide, and selected volatiles. (http://www.qp.gov.bc.ca/statreg/reg/T/TobaccoSales/282_98.htm, 12/18/2003) – required in British Columbia, page 11
A further complication is that the degree of underestimation of human smoking intensity is not constant across all existing cigarette designs but is exaggerated in low-yield cigarettes because smokers tend to compensate by increasing both puff frequency and the volume of smoke inhaled. P 14