Regulation, Industry News

San Francisco has moved to ban e-cigarettes

Juul has a backup plan

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Catherine Ho  - June 18, 2019 - San Francisco Chronicle

The San Francisco Board of Supervisors on Tuesday unanimously voted to approve first-of-its-kind legislation to suspend the sale of e-cigarettes in the city, amid concerns over underage use of the addictive nicotine products. The measure is already being challenged by the nation’s largest e-cigarette company, Juul, which is laying the groundwork to take the issue to voters in November.

The bill still requires final approval, but the board voted 11-0 to pass the ordinance on the first reading, telegraphing its intent to make it official as early as next week.

The measure, if passed, would go into effect seven months after it is signed by the mayor. It would halt the sale of e-cigarettes in San Francisco’s brick-and-mortar stores and bar the delivery of e-cigarettes bought online to San Francisco addresses until the U.S. Food and Drug Administration reviews the safety of the products, which it has not yet done.

“We spent the ’90s battling Big Tobacco and now we see the new form in e-cigarettes,” said Supervisor Shamann Walton, who co-authored the bill with City Attorney Dennis Herrera. “I’m not going to put the profits of Big Tobacco over the health of young people.” Juul, the largest seller of e-cigarettes, agreed to sell a 35% stake in itself to tobacco company Altria in December.

Juul is collecting signatures for a ballot measure for the November election that would override the board’s e-cigarette ban and allow the sale of vaping products to continue in the city.

The board on Tuesday also signaled its intent to pass a separate measure prohibiting the sale, manufacture and distribution of e-cigarettes on city property — a move aimed at Juul, whose San Francisco headquarters on city-owned property at Pier 70 has generated much public outcry.

This legislation would not be retroactive, so it would not kick Juul out of the pier property, where the company is leasing space, but it would prevent e-cigarette companies in the future from leasing on city land. Juul said it does not sell, manufacture or distribute e-cigarettes at the pier offices, and that its activities there consist of research, product development and design. The company on Tuesday announced it has bought a 28-story office towerin San Francisco to accommodate its growing workforce — it employs 1,200 people in San Francisco alone — but said it will maintain its space at the pier.

“This legislation (halting the sale of e-cigarettes) would not entirely prevent youth vaping, but we hope it is a start,” said board President Norman Yee. “We’ve created public discourse about the potential danger of this product (that) is moving us in a better direction.”

In a statement, Juul said it shares the board’s goal of keeping vaping products away from under-21 customers and pointed to steps the company recently took to restrict youth access, such as pulling flavored nicotine pods off of store shelves and shutting down its social media accounts.

“The prohibition of vapor products for all adults in San Francisco will not effectively address underage use and will leave cigarettes on shelves as the only choice for adult smokers,” Juul spokesman Ted Kwong said in a statement. “We will continue to work with local policymakers, small businesses, community leaders and adult smokers who have switched to vapor products to enact stronger regulation and enforcement rather than complete prohibition.”

The move to ban the sale of e-cigarettes is also being hotly contested by the owners of vape shops, corner stores and other small businesses who say they rely on the sale of e-cigarettes to keep their stores open. It has also riled many adult vapers who say they should be able to buy e-cigarettes if they so choose, as long as they’re over 21.

Walton and Supervisor Sandra Lee Fewer said they are forming a working group to help mitigate the impact on small businesses by identifying alternative sources of revenue.

“I’m outraged,” said Carlos Solorzano, CEO of the Hispanic Chambers of Commerce of San Francisco, which represents hundreds of businesses in the city. “They have no idea how this is going to impact small businesses and our employees. We’re going to oppose it as strongly as we can. They can’t take away a right to choose for adults who want to buy legally.”

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