Juul founders Adam Bowen and James Monsees.
Jeniece Pettitt I CNBC
Juul co-founder James Monsees defended the company in a Congressional hearing on Thursday where lawmakers grilled him over the company’s role in allegedly fueling a teen vaping “epidemic.”
The House Committee on Oversight and Reform’s Economic and Consumer Policy subcommittee is scrutinizing Juul’s advertising, design, flavors, outreach efforts and health claims in a two-part hearing called “Examining Juul’s Role in the Youth Nicotine Epidemic.” Thursday’s hearing marks the first time lawmakers have grilled Juul executives.
Monsees told the committee the company “never wanted any non-nicotine users, and certainly not anyone underage” to use its products. He acknowledged federal data showing millions of high school students started vaping as Juul’s products became popular.
Monsees tried to distance Juul from Big Tobacco, even though Juul sold a 35% stake of its company to Marlboro-cigarette maker Altria.
“Put simply, Juul Labs isn’t Big Tobacco,” he said. “We are here to eliminate its product, the cigarette.”
Rep. Debbie Wasserman Schultz, D-Fla., pressed Monsees on this relationship, asking whether Juul considered itself Big Tobacco because of it.
“I consider traditional big tobacco company as a major investor in our company,” Monsees said, to which Schultz responded, “actions speak louder than words.”
Committee chair Rep. Raja Krishnamoorthi, D-Ill., presented images comparing Marlboro cigarette branding with Juul’s nicotine pod design. He pressed Monsees on a settlement Juul made with Philip Morris USA in 2015 over its design, saying Juul purposely replicated the popular Marlboro brand.
“I do deny that you’re comparing here, with all due respect Mr. Chairman, you’re comparing a piece of packaging to piece of product hardware,” Monsees said in response to a question on whether he denies that Juul’s initial pod design resembled Marlboro’s design. “There was never any intent. The last thing we wanted was to be confused with any major tobacco company.”
Lawmakers criticized Juul’s fruity flavors, which some say mask the harsh nicotine taste and appeal to kids. Monsees defended the company’s flavors, saying they help adult smokers stop smoking cigarettes. Juul pulled nearly all of its flavors out of retail last year facing pressure from the Food and Drug Administration.
Anti-smoking advocates on the first day of hearings told lawmakers how Juul, maker of the market-leading e-cigarette, has become ubiquitous among teenagers. Stanford professor Robert Jackler displayed Juul advertisements featuring bright colors and attractive, young-looking models.
Democrats ripped into Juul for designing an e-cigarette that’s sleek and easy to hide from parents and teachers. They also criticized fruity flavors like mango and creme.
Republican members of the committee appeared more sympathetic to Juul, reminding colleagues that millions of Americans still smoke and struggle to quit.
Last year, nearly 21% of U.S. high school students — roughly 3 million teens — vaped, according to federal survey data. Critics say Juul targeted minors and caused what regulators are calling a teen vaping “epidemic.” Juul says its products are for adult smokers who want to stop smoking cigarettes, not kids.
Juul’s CEO apologized in an interview with CNBC following a recent documentary, “Vaporized: America’s E-cigarette Addition.” CNBC’s Carl Quintanilla asked Juul’s Kevin Burns what he would say to a parent with a child who was addicted to Juul.
“First of all, I’d tell them that I’m sorry that their child’s using the product,” said Burns. “It’s not intended for them. I hope there was nothing that we did that made it appealing to them. As a parent of a 16-year-old, I’m sorry for them, and I have empathy for them, in terms of what the challenges they’re going through.”