Industry News

Juul Ends Support for Prop. C

Juul Ends Support for Prop. C

SF measure to overturn e-cigarette sales ban

juulBy Catherine Ho San Francisco Chronicle

Juul will end its support for Proposition C, the San Francisco ballot measure that the vaping company has spent millions of dollars promoting through political ads, election mailers and canvassers.

Prop. C will still appear on the Nov. 5 ballot. If approved, it would overturn a San Francisco ordinance suspending the sale of e-cigarettes in the city, and replace it with regulations supported by Juul, which is headquartered in San Francisco.

In a statement issued Monday evening, Juul said the move comes as part of a company-wide review by new CEO K.C. Crosthwaite, whose appointment was announced last week. It means Juul will not put any additional money into the Prop. C campaign, called the Coalition for Responsible Vaping Regulation. Juul is the sole funder of the measure.

The coalition said it plans to wind down campaign activities by the end of the week.

Any money from Juul that the campaign has already received but not yet spent will be returned to Juul. Juul has contributed $18.6 million to the Prop. C campaign; the campaign has spent $10.5 million and has $1.3 million in unpaid bills. That leaves about $7 million in unspent dollars that will be returned to Juul, the coalition said.

“I am committed to seeing that Juul engages productively with all stakeholders, including regulators, policymakers and our customers,” Crosthwaite said in a statement. “This decision does not change the fact that as a San Francisco-founded and -headquartered company we remain committed to the city. San Francisco is not only the home of our company’s founding but is also the home of many of our talented employees.”

Prop. C ads were being investigated by the Food and Drug Administration as part of a broader probe by the agency into Juul practices, including marketing tactics that regulators believe were targeting youth. The company last week said it would suspend all print, broadcast and digital ads, but did not say at that time whether the Juul-funded political ads would also be suspended.

Juul’s about-face is believed to be the first time a corporation has invested millions of dollars into a San Francisco ballot measure, only to withdraw its support shortly before voting begins, said Jon Golinger, a San Francisco political consultant who teaches election law at Golden Gate University. In the rare instances when a ballot measure backer has withdrawn their effort before an election, it was because the issue was resolved or the measure became moot, he said.

“That is historic,” Golinger said. “A colossal failure of a ballot measure campaign that will go into the history books as a cautionary tale for corporations attempting to use the ballot box this way in the future.”

The move comes amid immense regulatory and political pressure on Juul, which is being investigated by multiple federal and state agencies over its marketing tactics to youth.

Spending on Prop. C has by far eclipsed spending on all other ballot measures this election cycle, combined. The five other ballot measures have collectively garnered $1.4 million in spending.

The major backer opposing Prop. C, billionaire and former New York City Mayor Michael Bloomberg, has spent $3.7 million to finance ads urging San Franciscans to vote down the measure. It is part of the $160 million Bloomberg has committed to spending nationwide to help cities and counties pass policies meant to reduce youth vaping.

Larry Tramutola, campaign director for the No on C campaign, called SF Kids vs Big Tobacco, said he will remain skeptical until the Prop. C campaign returns the $7 million to Juul.

“This could very well be yet another of a series of lies and exaggerations from Juul and Big Tobacco,” he said. “Until they return the 7 million unspent dollars that is in their political account, until they suspend their mail, their advertising, their paid phone calls and lay off their consultants, we do not believe them.”

Catherine Ho is a San Francisco Chronicle staff writer. Email:  Twitter: @Cat_Ho

 

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