Juul products

When Francisco-based vaping giant Juul decided to suspend its Proposition C campaign, it came as a surprise to most everyone. And that includes the Proposition C campaign. 

Workers on the ballot measure — which would undo City Attorney Dennis Herrera and Supervisor Shamann Walton’s legislation demanding Juul receive FDA approval before its vaping devices can be sold in its home city — got the news along with everyone else on Monday evening — they were out of a job. 

It was, for those campaign employees, a very F*ck-it-Dude-Let’s-Go-Bowling moment. “Okay, let’s take the night off,” thought one. “Let’s see what happens tomorrow.” 

Well, tomorrow is now today. And, so far, most of what’s happened is black-box analysis and rubble-sifting of this expensive wreck of a campaign. 

But, we’re told, Juul — a company in turmoil among an industry in turmoil — did not scuttle its campaign because it sensed defeat in November’s election. Juul tossed $7 million into this fight just last week and has spent nearly $12 million to date. This is toothpaste money for a company valued at dozens of billions of dollars. 

When you put $11.6 million into a municipal election in a mid-sized city, you can afford polling. Lots of polling. All of these polls, we are told, indicated Prop. C was winning or was in a dead heat. Prop. C backers even boasted to their No-on-C opponents that their own polling put them 12 points up, for what that’s worth.

Certainly the winds of fate are blowing against Juul; when President Trump and San Francisco’s political leadership are in alignment against you, it doesn’t bode well. But with a bottomless pit of  money at Juul’s disposal, November’s election was figuring to be, at the very least, highly competitive. 

As hard as it is for San Franciscans to fathom, this decision to abort the campaign may be based on issues larger than a ballot measure in our mid-sized city. 

Shamann Walton
Supervisor Shamann Walton, who co-authored the legislation restricting the sale of e-cigarettes sans FDA approval, has won another political tussle. Photo by Joe Eskenazi.

Juul’s continued existence depends upon receiving Food and Drug Administration approval for its product. “San Francisco’s approach is straightforward,” noted City Attorney Dennis Herrera following Juul’s pullout. “Get FDA approval and you can sell your product here. If you don’t, you can’t. It’s that simple.” 

It’s not that simple, but this cuts to the heart of it. If Juul scattered enough money to leave San Francisco ankle-deep in cash and won at the polls in November — but didn’t eventually receive the FDA’s benediction — that would be a deeply Pyrrhic victory.

And the Yes-on-C campaign was, it seems, doing real damage to Juul’s efforts to win over the FDA. 

To wit, the FDA launched an investigation into Juul’s Prop. C ads claiming that Juul products are safer than cigarettes. That was clumsy — but it may pale in comparison to another Juul campaign claim. 

On Sept. 17, Walton sent the FDA a 13-page letter documenting myriad questionable claims and behaviors made by Juul and its representatives on the campaign trail. 

Walton’s letter, which is meticulously detailed, included a link to video of an Eastern Neighborhoods Democratic Club speech made by Juul consultant Tom Hsieh. During his presentation, Hsieh made a number of statements regarding the safety and effectiveness of Juul’s products of the sort the FDA had ordered Juul to curtail. 

Most damningly, he claimed Juul — which is, again, desperately seeking FDA approval — is more effective than FDA-approved smoking-cessation products:  

And just don’t take our word for it. You can go on to our website and you can look. There are hundreds of San Francisco — thousands of San Francisco smokers who have made the switch, who say they’ve tried the patches, they’ve tried the Nicorette® gum, they’ve tried the Chantix® and all the anti-smoking cessation products. They just don’t work. 

The FDA had, specifically, earlier warned Juul and its campaign about specious claims devoid of scientific backing. But, in additionally claiming Juul to be more effective than FDA-approved products (“they just don’t work”), the company was not only disregarding the FDA’s warning but actively poking its finger in the agency’s eye. 

Juul, again, desperately needs that FDA approval. This is, to put it mildly, bad politics. 

YouTube video

It’s the kind of politics that Juul’s new CEO, K.C. Crosthwaite, is evidently loath to engage in. Crosthwaite is a career tobacco executive who was most recently a higher-up at Philip Morris’ parent company. He replaces the outgoing CEO Kevin Burns, who apologized to parents for a “teen vaping epidemic” before falling on his sword. 

Our sources say the decision to pull the plug on the campaign was likely made by the new CEO. The company is, evidently, moving away from the San Francisco disruptive-move-fast-break-things-ask-forgiveness-not permission model in which rules are made to be broken — and then changed — to the incremental behind-closed-doors dealmaking model of established big business players. 

Along similar lines, Juul recently curtailed its advertising campaigns in the United States. And why not? Cigarette companies are doing just fine, and they don’t advertise. Crosthwaite knows that. 

Insofar as Juul is a competitor to traditional Big Tobacco, moves by Trump and Sen. Mitch McConnell to kneecap it are just good, protectionist politics for a favored constituency. With this president, it may additionally be a heavy-handed means of soliciting a campaign donation. Regardless, expect the  money that would’ve been spent on a scuffle here in San Francisco to be redirected to lobbyists in Washington — where Juul is fighting a war. 

And yet, could Juul have its pen and vape it too? Possibly: Prop. C could well still win at the polls even after Juul defunds it; the ballots are already off the the printers and we’ll be voting on this regardless. 

If some other entity wants to start funneling money into the Prop. C fight — a grocer’s association or some such — that could happen. No-on-C forces say, however, they’re less worried about that than they are about working against the framework Juul laid with its $11.6 million and months of campaigning. 

The nomenclature about Prop. C being a measure to crack down on youth vaping; the “regulate don’t ban” wordplay; and the overall confusion about what happens when you vote yes or no are all obstacles for the No-on-C forces. 

So, as the out-of-work Prop. C campaign worker said, “Let’s see what happens tomorrow.” 

“There’s a whole campaign full of people who just got laid off,” adds a Prop. C backer. They may be itching to get back to work. “They feel like the game got called at halftime and the score is tied.” 

Previously: Mission vape shops bracing for San Francisco e-cigarette ban

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Managing Editor/Columnist. Joe was born in San Francisco, raised in the Bay Area, and attended U.C. Berkeley. He never left.

“Your humble narrator” was a writer and columnist for SF Weekly from 2007 to 2015, and a senior editor at San Francisco Magazine from 2015 to 2017. You may also have read his work in the Guardian (U.S. and U.K.); San Francisco Public Press; San Francisco Chronicle; San Francisco Examiner; Dallas Morning News; and elsewhere.

He resides in the Excelsior with his wife and three (!) kids, 4.3 miles from his birthplace and 5,474 from hers.

The Northern California branch of the Society of Professional Journalists named Eskenazi the 2019 Journalist of the Year.

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  1. Cigarette sales are not “fine”…..MSA money to the States has dropped significantly…..and Big Tobacco is spending more money on Lobbyist and Politicians than ever……Shutting down vaping is the only way the States will get their expected revenue…..and the cost of Public Health…..follow the money….

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  2. Also worth noting the US Attorney for Northern CA opened a criminal investigation into Juul.

    Altria not only sent a new CEO to Juul, today they transferred over a new high-ranking regulatory officer.

    As the author notes, it’s all about the FDA at this point. Juul has until May to repent and duly submit their plan to the FDA. Meanwhile the company has lost 33% in valuation, but is still increasing market share.

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