The nation is in the grips of a moral panic about flavored e-cigs that could ultimately benefit Big Tobacco companies. Following a rash of vaping-related illnesses, including eight deaths largely tied to illicit THC cartridges, New York became the first U.S. state to ban flavored e-cigs on September 17. Michigan, Illinois, and Massachusetts are finalizing similar measures and President Trump has also suggested banning e-cig flavors. (Even India recently announced a ban on all vaping, a move embraced by the World Health Organization.)
More big news dropped Wednesday morning. Kevin Burns, the CEO of Juul Labs, is being replaced by K.C. Crosswaithe, an executive from Altria, the big tobacco company that owns a 35 percent stake in Juul. Other outlets are reporting that Juul is suspending advertising and that layoffs are imminent.
If flavored Juul pods and illegal weed vapes seem unrelated to you, you’re not alone. Drug policy experts have described this overreaction as more drug war delirium. But as we're already seeing, big tobacco companies are using this crisis—as they have used other public health crises in the past—as an excuse to consolidate their power over the newly massive vape market.
Big Tobacco stands to gain from this hyper reaction in a few ways. First, nicotine users who may be spooked by heavy-handed media reports could smoke combustible cigarettes instead, according to Jidong Huang, an associate health policy professor at Georgia State University, who specializes in tobacco economics.
“This panic is likely to change the risk perception of electronic cigarettes,” Huang says. He expects e-cig use to drop among certain populations. “They might actually think that vaping is more harmful than combustible cigarettes. And then they would just stop using an electronic cigarette and switch back to combustible cigarettes. This is a possible scenario, for at least some adult smokers.”
The anti-vape frenzy could also clear the market of independent competitors to massive vaporizer companies like Juul Labs, which dominates the e-cig market with about 75 percent of sales. Last year, Altria Group, the company that owns Marlboro, invested $12.8 billion in Juul, earning a 35 percent stake in the company. The move to install an Altria executive at the head of that company should be concerning.
Juul and others, like Vuse, produced by Camel maker Reynolds American, will likely survive the current vape panic. Juul already removed some flavored nicotine pods from retail stores months ago, creating a gap for counterfeits to enter stores. Smaller vape companies might not weather the storm as easily.
“At least in the short run this is going to be a negative for the e-cigarette industry,” Huang says. “There's definitely opportunities for the tobacco industry to take advantage of those recent events to either change the market or change their focus.”
Philip Morris International split from Altria some years ago, but now the two tobacco giants are in talks to merge again, according to the New York Times. This would help Juul expand overseas, but also provide space in the market for IQOS, Philip Morris’ answer to the e-cig. Currently only available in Atlanta, Georgia, the electronic device works by heating tobacco without burning it, providing a burst of flavor and nicotine. Philip Morris announced Wednesday morning that it was redoubling its efforts to push IQOS onto the market.
If the e-cig market takes a hit, British pharmaceutical giant GlaxoSmithKline also stands to profit with its new nicotine spray. The oral spray, marketed as a way to quit smoking, is already for sale in 45 countries through Johnson & Johnson, and just received FDA backing this month to bring the product to the U.S.
This extra competition won’t matter much to major e-cig companies like Juul, Huang says. “Juul definitely has deep pockets to withstand the changing regulations in the electronic market and so the impact [will be on] those smaller vaping businesses, especially vape shops.”
But more importantly, it seems like flavored e-cig bans are unlikely to stop anyone from getting the mysterious vaping illness.
“Banning flavors in nicotine vaping products is not going to discourage youth from buying contaminated cartridges of filled with THC from drug dealers,” Gregory Conley told Motherboard. As president of the nonprofit advocacy group American Vaping Association, Conley has helped shape public policy on vaping for almost a decade. “It's remarkable that you have politicians that are pretending that somehow banning flavors is going to do anything about THC cartridges on the black market.”
In Michigan, the flavor ban implemented by executive order carries some steep criminal penalties. Someone caught with four or more flavored pods could be slapped with an intent to distribute charge, “punishable by a fine of up to $200 and/or six months in jail per item.”
“Threatening [and] enforcing legal action does not work for people with other substance use disorders,” Jessica Moreno, a clinical pharmacist who lives in Detroit, said. “I do not see why anyone would consider it reasonable to implement yet another war-on-drugs era approach for this matter.”
A moratorium on e-cig flavors has been in the works for over a decade, largely pushed by Big Tobacco. And the current frenzy surrounding vaping could provide excellent cover for a flavor ban to finally happen, which would have the effect of further consolidating the market and pushing out small independent players.
"Banning flavors will have zero effect on the actual problem which is the potentially fatal illness being caused by black market products"
Last November, the FDA announced its intent to ban e-cig flavors and Commissioner Scott Gottlieb presented an outline of the ban to the White House in March. (The motive of these bans is, like many acts of prohibition, upheld as “protecting youth.”) When Gottlieb abruptly resigned in the spring, later joining the board of pharmaceutical giant Pfizer, the FDA’s flavor ban was tabled indefinitely.
Attempts to ban e-cig flavors date back to the Obama Administration, around the same time e-cigs were first introduced to the U.S. In 2009, Congress decided that tobacco was, in fact, a drug, which categorized it under the jurisdiction of the FDA and passed the 2009 Tobacco Control Act. (This law reversed a 2000 Supreme Court decision saying the FDA couldn’t regulate tobacco. The lawsuit was pushed by Big Tobacco companies, which sued to block regulation attempts by the FDA in 1996.) Under the new legislation, the Obama Administration outlawed flavored cigarettes, except menthol.
E-cigarettes were not yet on the FDA’s radar, and not really on Big Tobacco’s mind either. Juul and Vuse wouldn’t appear for several more years, and Blu was still independent. (It’s now owned by Imperial Brands, maker of Kool cigarettes, and the world’s fourth-largest international cigarette company.)
Just two months after the Tobacco Control Act passed, an Oregon Attorney General sued a vaping company, claiming it had “targeted children with sweet flavors,” according to The Oregonian. The attack on e-cig flavors had begun, but it still wouldn’t attract FDA attention until May 2016, when regulatory changes gave the Administration authority over vaping devices, including flavored products.
If the FDA and Big Tobacco companies get their way, flavored e-cigs could finally be outlawed. But that’s likely to create more problems, according to Dan Marchant, owner and founder of Vape Club, the UK's largest vaping retailer and founding member of the Vaping Industry Association.
“There is absolutely no evidence that any of the illnesses have been caused by nicotine containing e-cigarettes, including the flavourings used,” Marchant said in an email. “Banning flavors will have zero effect on the actual problem which is the potentially fatal illness being caused by black market products … If you ban flavors, you instantly create what will be a thriving black market. And what has caused the outbreak of these illnesses? Black market products.”
According to Marchant, this backwards logic strikes at the heart of the bans. Some research suggests that never-smokers who vape may be turned onto combustible cigarettes. However, Marchant argued, “If the end goal here is to stop children smoking, why is vaping the big target at the end of the FDA’s sights? Surely the real villain here would be tobacco? Why are there no calls to ban tobacco?”
Troy Farah is an independent journalist from Southwest California. His reporting on drug policy and science has appeared in WIRED, The Guardian, Undark, Discover Magazine, VICE and more. He co-hosts the drug policy podcast Narcotica. Follow him on Twitter.
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