Massachusetts Attorney General Maura Healey is investigating leading e-cigarette manufacturer Juul Labs for failing to prevent minors from buying its products.
High schools around the country have reported a rapid increase in students "juuling," the verb some use to describe using the brand's e-cigarettes. Administrators are racing to stem Juul’s popularity among students, while lawmakers have pressed the U.S. Food and Drug Administration to take action.
The Massachusetts probe, which Healey claims is the first of its kind, wants to find out how many minors use the company's products. The state also wants to see what steps the company is taking to monitor how effective its age verification system is and whether and how Juul monitors other sites that sell its products, among other aims. Healey plans to investigate whether Juul violated Massachusetts' consumer protection statute and the state's e-cigarette regulations.
Healey's office also sent cease-and-desist letters to two online retailers, Direct Eliquid LLC and Eonsmoke LLC, ordering them to stop selling e-cigarettes to Massachusetts customers until they implement adequate age verification technology.
Direct Eliquid and Eonsmoke didn't immediately respond to requests for comment.
"We welcome the opportunity to work with the Massachusetts Attorney General because, we too, are committed to preventing underage use of JUUL," said Juul spokesman Matt David in a statement. "We utilize stringent online tools to block attempts by those under the age of 21 from purchasing our products, including unique ID match and age verification technology."
"Furthermore, we have never marketed to anyone underage. In fact, we have done very little marketing relative to our growth," he said.
Sales of Juul have skyrocketed nearly 800 percent over the past year. The brand is the clear market leader, with 71 percent of share in the four weeks ended July 14, according to Nielsen figures compiled by Wells Fargo.
“Like many Silicon Valley technology startups, our growth is not the result of marketfing but rather a superior product disrupting an archaic industry,” David said. “When adult smokers find an effective alternative to cigarettes, they tell other adult smokers."
But that opinion is not shared by Healey.
"I want to be clear with the public. This isn't about getting adults to stop smoking cigarettes," Healey said Tuesday. "This is about getting kids to start vaping. That's what these companies are up to. They're engaged in an effort to get kids addicted, get them hooked so they will have customers for the rest of their lives."
The U.S. Food and Drug Administration in April requested information from Juul about how it markets its e-cigarettes and what it knows about how they appeal to teens. In its response, Juul submitted “tens of thousands” of pages, FDA Commissioner Scott Gottlieb told CNBC in a phone interview last week.
Massachusetts recently joined other states to submit comments to the FDA on an advance notice of proposed rulemaking — the first step the agency takes in implementing a rule — about the role flavors play in attracting users to certain tobacco products.
Critics argue high schoolers and middle schoolers are attracted to flavors such as creme brulee and mango but are unaware that each pod contains as much nicotine as a pack of cigarettes.
Healey ripped Juul for its plans to craft an anti-vaping curriculum for school districts to use, saying the company is borrowing Big Tobacco's playbook.
However, Juul Chief Administrative Officer Ashley Gould told CNBC last week the company decided to scrap its school curriculum plans after hearing from anti-tobacco advocates that its involvement could be more hurtful than helpful. Instead, it's working with Iowa Attorney General Tom Miller, a proponent of the use of e-cigarettes as a way to reduce cigarette smoking, to identify the best strategies to curb youth use.
While Juul has backed off the school curriculum plan, the company has pledged to spend $30 million over the next three years on research, youth and parent education and community engagement.