- San Francisco banned the sale of e-cigarettes Tuesday, making it the first U.S. city to do so.
- The ordinance pits San Francisco against one of its most prominent hometown startups, e-cigarette maker Juul Labs.
- Juul said the ordinance is counterproductive and will fuel a black market for e-cigs.
The city of San Francisco on Tuesday voted to impose a blanket ban on e-cigarettes — making it the first American city to outlaw the sale, distribution and manufacturing of vaping products.
The sweeping restriction also puts San Francisco at odds with one of its most prominent hometown startups, Juul Labs, which last Tuesday said it bought an office building in San Francisco — the same day the city board unanimously backed the e-cigarette ordinance in a preliminary vote. The city's board of supervisors ratified the e-cig sales ban Tuesday.
Juul claims the ordinance will "drive former adult smokers who successfully switched to vapor products back to deadly cigarettes." It will also "deny the opportunity to switch for current adult smokers, and create a thriving black market instead of addressing the actual causes of underage access and use," the company said in a statement to CBS MoneyWatch.
The ordinance now awaits mayor London Breed's signature. It will take effect in six months to give retailers time to remove the product from their shelves, and subject offending retailers to fines and other penalties, including jail time.
The ordinance is aimed exclusively at e-cigarettes, which Supervisor Shamann Walton said endanger San Francisco's youth. It doesn't affect the local sale of cigarettes.
Walton emphasized that many of the health effects of e-cigarettes remain largely unknown: "Middle school and high school students are becoming addicted to nicotine because of e-cigarettes, so we want to do everything we can to keep e-cigarettes out of the hands of young people until the FDA conducts the appropriate clinical trials and finds out how these should be marketed. We need to make sure we protect young people," he told CBS MoneyWatch.
City Attorney Dennis Herrera weighed in with a statement last week after the city board supported the measure in its preliminary vote. "If the federal government is not going to act to protect our kids, San Francisco will," Herrera said.
"E-cigarettes are a product that, by law, are not allowed on the market without FDA review. For some reason, the FDA has so far refused to follow the law. Now, youth vaping is an epidemic, Herrera said, encouraging Juul and other e-cigarette companies to prove that their products are a benefit to public health "rather than a lure to addict another generation."
Juul, which is 35% owned by tobacco company Altria, was spun off as a separate company from vaporizer maker Pax Labs in 2017. Juul had revenue of about $2 billion last year and its share of the fast-growing e-cig market is estimated at 72%. The Altria stake, purchased last year, valued the entire startup at more than $35 billion, Bloomberg reports.
The company said in a statement to CBS MoneyWatch it has taken "the most aggressive actions in the industry" to prevent youths from using its tobacco and vapor products. "We also continue to develop technologies to further restrict underage access with our distributors, at retail establishments and as features of potential new products," the company said.
The company added that it supports stronger regulation and enforcement, but not "complete prohibition."
The consumer watchdog U.S. Public Interest Research Group on Tuesday praised San Francisco for taking unprecedented action against e-cigarette manufacturers.
"San Francisco's lawmakers have done what the FDA should have done years ago: ensure that e-cigarettes undergo the appropriate health review before hitting shelves. WIth the rampant rise in e-cig use among our kids, it's clear the agency made a bad call by letting e-cigarettes remain on the market," Matt Wellington, U.S. PIRG's End the Nicotine Trap Campaign Director told CBS MoneyWatch in a statement.
He urged the FDA to expedite its health review cigarettes and pull products from shelves until it is complete.
"In the meantime, other cities and towns should pass legislation to help ensure that children don't get hooked on e-cigarettes, including banning all flavored e-cigarettes and other flavored tobacco products," Wellington said.