Juul cuts re­tail sales

Houston Chronicle - - BUSINESS | LEGAL NOTICES - By Drew Arm­strong, Anna Ed­ney and Olivia Zaleski

Juul Labs Inc., the maker of a hot-sell­ing va­p­ing de­vice that is in­creas­ingly pop­u­lar with teens, will stop sell­ing most fla­vored eci­garettes in re­tail stores, ac­cord­ing to a per­son fa­mil­iar with the mat­ter.

The de­ci­sion fol­lows word that U.S. health of­fi­cials are pre­par­ing to step up ef­forts to cur­tail un­der­age use of e-cig­a­rettes. On Thurs­day, a se­nior of­fi­cial at the Food and Drug Ad­min­is­tra­tion said the agency plans to re­strict sales of many fruit- and dessert-fla­vored nico­tine pods to adult-only stores.

The new curbs will ap­ply only to car­tridge-style de­vices, such as Juul, ac­cord­ing to the FDA of­fi­cial. The Juul de­vice has be­come pop­u­lar with young peo­ple in part be­cause its small size and re­sem­blance to a USB drive make it easy to con­ceal.

Juul’s move is ex­pected to af­fect 45 per­cent of its in­store re­tail sales, ac­cord­ing to the per­son fa­mil­iar with the com­pany’s plans. To­bacco and men­thol-fla­vored Juuls will still be avail­able in stores.

Un­der the FDA’s planned re­stric­tions, on­line sales will be al­lowed, but only by re­tail­ers who ver­ify the buyer’s age, just as al­co­hol can be sold on the web as long as there’s some­one 21 or older to sign for the pack­age, said the agency of­fi­cial. The reg­u­la­tions, which are ex­pected to be an­nounced next week, will take ef­fect in the coming months.

E-cig­a­rettes have cre­ated a para­dox for the FDA and the com­pa­nies that make them: They need to be at­trac­tive enough to lure tra­di­tional smok­ers to switch, but not so en­tic­ing that they cre­ate an en­tirely new class of nico­tine users.

Ac­tion on e-cig­a­rettes would par­al­lel moves the FDA has al­ready made to ban dessert fla­vors in tra­di­tional cig­a­rettes. The agency has also been ex­am­in­ing re­strict­ing men­thol fla­vors in cig­a­rettes. Re­duc­ing or elim­i­nat­ing men­thol fla­vor in tra­di­tional cig­a­rettes would be a sep­a­rate reg­u­la­tory ac­tion from the e-cig­a­rette pro­posal, said the se­nior FDA of­fi­cial.

“I am fairly con­fi­dent there will be a le­gal chal­lenge,” said Lyle Beck­with, se­nior vice pres­i­dent of gov­ern­ment re­la­tions at the Na­tional As­so­ci­a­tion of Con­ve­nience Stores. He said there’s no data he knows of show­ing that vape shops do a bet­ter job of age ver­i­fi­ca­tion than con­ve­nience stores.

Spokes­men for the FDA and Juul de­clined to com­ment.

“Any ac­tion that slows down the growth tra­jec­tory of Juul will be a pos­i­tive for to­bacco sen­ti­ment,” Jef­feries In­ter­na­tional Ltd. an­a­lyst Owen Ben­nett wrote in a note.

Scott Ol­son / Getty Images file

Juul will cut re­tail sales of most of its fla­vored e-cig­a­rettes.

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