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July 26, 2019, 9:07 a.m. EDT

Juul’s billionaire co-founder plays defense as House Democrats question company’s moves on youth vaping

‘How does making it harder to hold retailers accountable for selling your product to children help keep your products out of children’s hands?’

By Victor Reklaitis, MarketWatch


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James Monsees, co-founder and chief product officer at Juul Labs, testifies Thursday in Washington, D.C.

Juul Labs Inc. co-founder James Monsees faced tough questions Thursday, as a Democratic-led House panel grilled him about the e-cigarettes heavyweight’s role in the youth vaping epidemic.

Rep. Elijah Cummings was among the Democrats blasting Monsees at a Capitol Hill hearing, with the congressman from Maryland focusing on a key ballot measure in San Francisco that Juul has backed.

San Francisco last month became the first major U.S. city to ban the sale of electronic cigarettes in an effort to crack down on youth vaping, but the new ballot measure aims to overturn the prohibition and deliver other changes .

Read more: Vaping may be more harmful to teens than we thought

And see: Makers of flavored e-cigarettes face ‘a make-or-break year’ in Washington

“If you wanted to keep your product away from kids, you would support holding bad businesses accountable for illegal sales, not adding loopholes,” Cummings told Monsees, after saying the measure would “insulate” retailers from liability by raising the standard to “knowingly selling to minors.”

“How does making it harder to hold retailers accountable for selling your product to children help keep your products out of children’s hands?” asked Cummings, who is chairman of the House Oversight Committee.

“I don’t know the details of that. You’ve very much piqued my interest,” responded Monsees, who serves as San Francisco-based Juul’s chief product officer. “I hear your concerns, and I thank you very much for asking these questions in a way that we can go investigate and take some pro-active steps to get back to you. We certainly will do that.”

Cummings promised to give Monsees a set of questions, adding that he’ll work to bring him back to Capitol Hill. The congressman also said that while Juul says it’s committed to combating youth vaping, the company’s actions on the issue are “deeply troubling.” Other Juul critics have made a similar point, saying its lobbying efforts in various U.S. states, for example, run counter to its promise to curb youth vaping.

Related: Juul makes an audacious case against Trump’s tariffs on Chinese goods

And see: Teens can spend $1,000 a year on vaping — and the crackdown on Juul is making it more expensive

At the start of Thursday’s hearing before House Oversight’s subcommittee on economic and consumer policy, Monsees told the panel that he and co-founder Adam Bowen developed Juul’s products because they were smokers who were trying to quit. They became billionaires following a deal in which tobacco giant Altria Group Inc. (NYS:MO)  took a 35% stake in Juul.

“We never wanted any non-nicotine user, and certainly nobody under age, to ever use Juul products,” Monsees said. “Yet the data clearly shows a significant number of underage Americans are doing so. This is a serious problem. Our company has no higher priority than fighting it.”

This report was first published on July 25, 2019.

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