Cloudy Perspective
President Trump’s listening session on vapor products provided a much needed forum for the vapor industry.
It was a contentious situation. Groups both for and against flavored vapor products spoke passionately about their position during a listening session with U.S. President Donald Trump. Held in late November, the roundtable discussion centered on e-liquid flavors and youth vaping. Overall, Trump seemed to have softened his opinion of an outright ban on all flavored vapor products except tobacco.
During the meeting, Trump announced that the federal rule for purchasing tobacco products will be raised from age 18 to 21. “We’re going to be doing that. Twenty-one, we’re going to be doing that,” Trump said. While whether he favors a flavor ban is clouded in uncertainty, Trump did show concern that an all-out flavor ban could push consumers toward the black market and counterfeit products. Trump stated that a decision on the flavor ban “would be coming soon.”
“This is a very big subject, and it’s a very complex subject. Probably a little bit less complex than some people think. But I’m here to listen, and I have very divergent views,” said Trump. “We’re going to be announcing very soon. We did have an instinct, but we’ll be announcing, and we’re going to continue this meeting for a little while.”
Only the first hour of the meeting was open to the media. Held at the White House, the session included vapor industry leaders, public health advocates, politicians, regulatory officials and others to address a surge in underage vaping and what would happen to the industry if flavored e-liquids were to be banned. It became heated at times as both sides tried to convince the president of their point of view. A Washington Post columnist likened the ordeal to a public policy version of the reality TV show The Apprentice as industry and government representatives randomly shouted at each other in hopes of swaying Trump.
Ryan Nivakoff, CEO at NJoy, for example, stated that a hundred thousand Americans were going to lose their jobs (if flavors were banned), adding that it’s not disputed by anybody in the public health sector. Tony Abboud, executive director for the Vapor Technology Association (VTA), which recently released an independent economic impact study that puts the number of jobs lost at over 150,000 (see “Significant Impact”), stated, “Actually, the number is higher, Mr. President.” Senator Mitt Romney, sitting at the right hand of the president, then stated, “[It’s actually] much lower.”
Romney later stated that there are approximately 10,000 vape shops in the U.S. with an average of four employees and conceded the “flavors” segment of the industry only accounted for about “50,000” jobs and that not all those jobs would be lost if flavors were banned. Romney did not include in his assessment employees at e-liquid manufacturing companies or flavor houses that also serve the industry as well as numerous other ancillary players in the market.
“They will lose their jobs, sir. They sell—I’d like to finish [Romney was trying to speak over Nivakoff]. [Vape shops]
sell exclusively flavors. So … I don’t think we need to argue the virtue of youth not using these products,” said Nivakoff. “We all agree that they shouldn’t.”
Overall, the vapor industry represented itself well. As one of the first speakers, Greg Conley, president of the American Vaping Association, explained to Trump that unlike on Sept. 11, when he initially announced his intent to ban flavors, Trump now knows the U.S. Centers for Disease Control and Prevention (CDC) was wrong in saying nicotine vapor products were killing people. “But now we know from the CDC that their main focus of their investigation, it’s not store-bought nicotine products,” said Conley. “It’s not the companies that Tony Abboud represents. It was illicit THC oil cartridges.”
Conley explained that he agreed with Trump’s decision to raise the age to purchase tobacco products to 21, but more can be done. “We need bulk sales purchase limits. We need marketing restrictions. And also, most importantly, there is—in May of 2020, every single vaping product on the market has to go through what’s known as a premarket review,” explained Conley. “That’s going to cost several million dollars per product. So even if we solved this crisis today—which I hope we do—in five, six months, we’re back where we started with potentially only the largest multibillion-dollar companies being able to survive … and all these small businesses, they’re the ones that are employing people—70,000, 80,000 direct jobs, 70,000 indirect jobs.”
Regarding the flavor ban, Trump asked members of the meeting if banning flavors would lead to any negative consequences for the consumer. “Isn’t that going to be just sold, you know, illegally, or somebody is going to open up a shop in China and ship it in with flavors and you don’t know what standard you’re getting? Isn’t that a problem?” Trump asked. Most members of the industry agreed. “In New York City, if you go to a bodega to buy the Juul pods, you can buy 15 different versions of Juul mango, which have been off the market since September,” Nivakoff explained.
Abboud explained to Trump that this is a complex problem, so it needs a sophisticated plan. “A flavor ban will not work. And you’ve articulated one critical reason why it will not work: People will just go to the black market. And that’s because adults are demanding these flavors,” said Abboud. “And I think the better approach would be to raise the age to 21, put severe restrictions on how you market the product. Then, on top of that, you have to increase penalties for retailers because our retailers are fine with the increasing penalties because they do know that they are age-gating and keeping these products out of the hands of kids.”
Additionally, Abboud said his organization supports a “three strikes and you’re out” rule for sales violations to underage customers. “Today, the FDA can allow you to have seven strikes before you’re actually told to stop selling tobacco products. That’s unacceptable,” he said. “On top of that: age verification. We are in the day, age, of technology. And that is what this is; this is a technology product that is helping people quit smoking.”
Trump likened the situation to the prohibition of alcohol. “You watch prohibition, you look at—you know, with the alcohol—you look at cigarettes, you look at [it] all—if you don’t give it to them, it’s going to come here illegally, OK? They’re going to make it,” Trump said. “But instead of Reynolds or Juul or, you know, legitimate companies, good companies, making something that’s safe, they’re going to be selling stuff on a street corner that could be horrible. That’s the one problem I can’t seem to forget. I mean, I’ve seen it. You just have to look—you have to look at the history of it. And now, instead of having a flavor that’s at least safe, they’re going to be having a flavor that’s—that’s poison.That’s a big problem.”
The anti-vapor groups never acknowledged the black market growth potential. They did, however, talk about the rise in youth vaping and their position that flavors don’t help smokers quit. “Mr. President, we have 5.3 million kids who are addicted, and it’s separate from the lung disease— 5.3 million kids. A million kids a day are using these products repetitively with addiction,” said the Campaign for Tobacco- Free Kids’ president, Matt Myers. “Since the flavors have been introduced, we have seen a meteoric rise in use by kids. We have seen no increase whatsoever before flavors were marketed so heavily … the No. 1 flavor of e-cigarette on the market was tobacco flavor.” Romney agreed with Myers, adding that “most adults are not using flavors.”
No Nielsen data or any other study could be found that showed tobacco flavor was once a market leader. However, several studies and all available Nielsen data shows nontobacco flavors to be the most popular in every market. Nivakoff said that “92 percent of my revenue is flavors, and I had 1.2 percent of [the] U.S. [market].”
Sally Goza, president of the American Lung Association, called the situation of youth vaping “a crisis.” She suggested to Trump that she represented “the nation’s doctors … and we’re all of the same message—that we need to take all flavors off the market, pending FDA investigation of that. And then we are worried that if we leave one flavor on the market—even menthol—that the children will go to that because they’re going to want something to help—they’re going to want something. And that’s why action is so desperately needed here.”
However, when asked by Trump what she would do about the potential problem of a black market and the public health issues that could arise (similar to the black market THC deaths), she had no answer. “I’m looking at Secretary Azar and hoping he has the great solution for that,” she said. “Well, it’s the problem,” replied Trump. “I think you have the same [black market] problem with drugs and everything else.”
Robin Koval, CEO and president of the Truth Initiative, said that the black market isn’t a problem; addicted kids will just quit. “If I may, on the counterfeit issue: We know, actually, that many of these kids want to quit. They need help quitting,” she said. “We asked kids, ‘What would you do if all the flavors were taken off the market, including menthol?’ Sixty percent—the No. 1 answer was ‘quit.’”
Toward the end of the open session, Abboud explained to Trump that the vapor industry is a new industry that’s—for the first time—competing for the cigarette smoker with a less harmful product. “You have a new industry that’s competing … trying to yank [cigarette smokers] off of that cigarette. And so, we have to do both things. There is no reason we can’t do both things in this country [have vapor products and combustible cigarettes],” said Abboud. “But if you eliminate flavors … because flavors make up about 85 [percent] to 90 percent of their sales … [many small businesses] will go out of business. There is no question about that because no small-business owner could take that kind of hit to their revenue.”
“It’ll destroy the business,” replied the president.
