Health and Science

E-cigarette maker Juul boosts lobbying spending as regulatory scrutiny increases

Key Points
  • Juul spent $560,000 on lobbying in the third quarter, according to a disclosure form. 
  • The FDA is trying to crack down on youth e-cigarette use, including possibly restricting nicotine liquid flavors.
  • Lawmakers, including Senate Minority Leader Chuck Schumer, have criticized Juul, which is the market's leader.
Signs in the window of the Smoke Depot advertise electronic cigarettes and pods by Juul, the nation's largest maker of e-cigarette products, on September 13, 2018 in Chicago, Illinois. 
Scott Olson | Getty Images

Leading e-cigarette manufacturer Juul spent half a million dollars on lobbying last quarter — up 167 percent from the previous quarter — as regulators weigh restrictions on the industry to stem a surge in teens using the devices.

In the third quarter, Juul spent $560,000, according to a lobbying disclosure form. That compares with the $210,000 it spent in the previous quarter, according to a filing. The company focused its efforts on e-cigarette and vaping regulation, as well as tariffs on products manufactured in China, it said in the disclosure.

However, the $560,000 is half of the amount the company initially reported spending Tuesday. The company filed an amendment correcting the figure, Juul spokeswoman Victoria Davis told CNBC.

Juul has beefed up its Washington operations amid growing scrutiny that could threaten its business. It has hired Tevi Troy, deputy Health and Human Services secretary in the George W. Bush administration; Jim Esquea, an assistant HHS secretary in the Obama administration; and Ted McCann, a senior policy advisor to House Speaker Paul Ryan, among others.

Lawmakers, including Senate Minority Leader Chuck Schumer, have urged the Food and Drug Administration to ban sweet nicotine flavors they say entice young people to use e-cigarettes. In September, FDA Commissioner Dr. Scott Gottlieb announced the agency would crack down against teen use that he said has reached "epidemic levels."

Preliminary federal data show high school students' use of e-cigarettes has surged 77 percent over the past year and use of conventional cigarettes has also ticked up, though the increase is not statistically significant. Those figures have Gottlieb and the FDA considering a slew of options, including restricting e-cigarette manufacturers from selling flavored nicotine liquids.

Any changes could weigh on Juul's revenue. The company represents 75 percent of the e-cigarette market, according to the most recent Nielsen data compiled by Wells Fargo analyst Bonnie Herzog. Its sales over the past year have reached $1.5 billion, according to Nielsen.

"We are focused on engaging with FDA, lawmakers, regulators, public health officials and advocates to drive awareness of our mission to improve the lives of the world's one billion smokers and to combat underage use so we keep JUUL out of the hands of young people," said Victoria Davis, a Juul spokeswoman, in an email to CNBC.

Note: This story has been updated to reflect an amendment Juul filed with regulators Tuesday correcting the amount it spent on lobbying in the third quarter. The correct amount is $560,000. This amendment was filed after CNBC reported on the company's initial filing.