In the first section of the MSA, this agreement was made “to avoid the further expense, delay , incovenience, burden and uncertainty of continued litigation” by the state against the tobacco industry for expenses occured to Medicaid as a result of smoking.
Unfortunately, the MSA did not make provisions for how the MSA money is to be spent.
Since the 4 tobacco giants entered an agreement to pay the state though the MSA, other tobacco companies are to be penalized by the state for doing business. So, since vaping helps smokers get off of cigarettes (which would lower MSA payments) the states catigorized vaping as tobacco.
Vaping is no more tobacco than vitamin C is an orange.
Some of the state governments issued bonds based on the projections for future MSA payments. Unfortunately, they underestimated the rate at which smokers would stop smoking which means the payments were lower than they banked on. Those payments were short to pay the bonds when due.
The S & P securities ratings assessed the immerging vaping industry as reducing the amount of smokers. Therefore they anticipated a drop in cigarette sales and the amount of MSA payouts. This means the governments that issued the bonds would have to find money elsewhere to pay them out when due.