House Panel Grills Juul Chief Over E-Cig Marketing Tactics

House Oversight and Government Reform subcommittee chair Rep. Raja Krishnamoorthi, D-Ill., right, speaks as he questions Juul Labs co-founder and Chief Product Officer James Monsees during a Thursday subcommittee hearing on the youth nicotine epidemic. Subcommittee ranking member Rep. James Comer, R-Ky., is at left. (AP Photo/Susan Walsh)

WASHINGTON (CN) – In the span of a year, e-cigarette use among high school and middle school students increased by 1.5 million users, to 3.6 million young users in 2018. Several federal agencies have called the situation an epidemic.

During a House Committee on Oversight and Reform hearing Thursday, lawmakers grilled Juul Labs’ co-founder and chief product officer James Monsees about marketing strategies his company used for one of the most popular vaporizing devices on the market.

“Yesterday, our subcommittee heard from two brave high school students,” Rep. Raja Krishnamoorthi, who chairs the subcommittee said, during an opening statement. “Juul went into their school and gave a presentation that was supposed to be about anti-vaping. After teachers left the room, Juul gave a presentation that painted Juul as healthy, and left kids believing that they could use it without health risks.”

Juul products have used other questionable methods of marketing, which were highlighted in study on the company’s marketing practices published by Stanford University School of Medicine this past January. In the study, researchers juxtapose well-retired tobacco ads with ads created by Juul’s marketing team, noting various similarities.

Robert Jackler, a researcher from Stanford University School of Medicine, testified Wednesday that Monsees had said the use of the university’s tobacco ad database was “very helpful as they designed Juul’s advertising.” Monsees denied making the statement.

Juul Labs co-founder and Chief Product Officer James Monsees testifies Thursday before a House Oversight and Government Reform subcommittee on Capitol Hill in Washington, during a hearing on the youth nicotine epidemic. (AP Photo/Susan Walsh)

In addition to these tactics, hashtags, or trending topics, were developed to market the Juul on social media platforms. The study notes one topic, “#vapelife,” was used on Instagram to create a social identity among e-cigarette users and escalate usage. Another topic specifically aimed at Juul marketing, “#juulnation” had been used 10,299 times to market the product online, the study states.

“Youth perceived that flavored e-liquids advertisements are meant for them,” the study states. “An [Functional magnetic resonance imaging] study among college age youth showed greater nucleus accumbens activity (function is reward and reinforcement) for sweet/fruit versus tobacco flavor e-cigarette advertisements.”

Rep. Mark DeSaulnier, D-Calif., said Juul had falsely claimed it had partnered with Stanford University to create a vaping prevention curriculum. In reality, the company had changed the research to suit its own needs, he said. The university has sent several cease-and-desist letters to the company.

Selling Juul products to retailers at a lower margin than traditional cigarettes also gave the company a competitive advantage, DeSaulnier said. While traditional cigarette manufacturers pay on average $3.57 per pack in taxes, Juul only pays a 7-cent tax – allowing the company to sell its products at a lower price than traditional cigarettes, he said.

Monsees maintained throughout the hearing his company’s product is only intended to help eliminate traditional cigarettes and the group actively supported efforts to raise the smoking age in some states to 21. He said in written testimony the company stopped selling nontobacco and nonmenthol-based flavored products – which at that time represented 50% of the company’s revenue – in an effort to combat underage use.

“We’ve certainly made missteps, I understand the criticism of some of our past actions, but we moved on very quickly,” Monsees said. “Our earliest marketing efforts were targeting 25- to 34-year-old adult smokers. We never want any of our retailers to sell to underage consumers.”

But DeSaulnier wasn’t buying.

“I want to tell you, I’ve been involved in public health for a long time in the Bay Area. You, sir, are an example to me of the worst of the Bay Area,” DeSaulnier said. Juul is headquartered in San Francisco. “You don’t ask for permission; you ask for forgiveness. You’re nothing but a marketer of a poison and your target has been young people.”

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