We see there is tremendous interest in this hearing. We welcome you and respect your right to be here. We also ask in turn for your respect as we proceed with the business of the committee today. It is the intention of this committee to proceed with this hearing without any disruption. Any disruption of this committee will result in the u. S. Capitol olice restoring order. Now listen up. This is very important. If a disruption occurs, a Capitol Police officer will go up to the individual and instruct that they crease the demonstration. The the person does not cease after the initial warning, the individual or individuals will be removed from the hearing room. We are very grateful for your presence today. And we very much appreciate that you want to listen to the witness, but we also ask you to respect the witness ability to express himself. I would also remind all members to avoid dage engaging in adverse personal references. I recognize myself for five minutes to give an opening statement. Big tobacco preyed upon generations of americas youth. Eventually we stood up as a country and stayed enough. State attorneys general reached a Settlement Agreement with the five largest cigarette manufacturers forcing them to stop marketing to kids. The u. S. Department of justice then brought ri crmp o charges against big tobacco in a decades long conspiracy to hide the dangers of smoking and did he accepttively market products and target kids. While we have made tremendous progress, we face a much different challenge today. In 2018, more than 20 of high school and 5 of middle School Students are using ecigarettes. In fact, 3. 6 Million High School and middle School Students use ecigarettes in 2018 an increase of 1. 5 million in one year. As a parent of three Young Children myself, including a teenager, these statistics are alarming. In 2018, the leading manufacturer of ecigarettes, a company by the name of juul, show its marketplace grow from 24 to 76 . And that companys growth also accompanied a spike in youth ecigarette use by 76 . E surge of ecigarette use caught nearly everyone off guard and it was labeled a epidemic by the food and Drug Administration and centers for disease and prevention and department of health and human services. How did we get here . First from the documents my office has received thus far in my investigation, im concerned about juuls Marketing Tactics targeting youth. Today, well learn how juul if he cantively used social media to build a youthoriented brand making vaping a cultural phenomenon. Just before as an aside, just before i came to this hearing, my wife informed me that my childs high school is now installing vape detectors in the rest rooms. Im very concerned about the negative Health Consequences of youth nicotine addiction sm the ability of kids to get addicted to ecigarettes and inability for adults to prevent it poses an unprecedented challenge. It produces a smell that lingers. Ecigarettes are small. And easily concealable products that produces aerosol that quickly dissipates. Nlike cigarettes, juul has mango, fruit and mention. Juuls contain twip will the nicotine content. Yet, 2 3 of americans between know es of 1524 do not ecigarettes contain nicotine and think it only contains flavors. Yesterday our subcommittee heard from two brave high School Students. Juul went into their school and gave a presentation that was supposed to be antivaping. Outside the presence of any parent or teachers, the high school reported to us that juul gave a presentation that painted their vaping instrument as healthy and left kids believing they could use ecigarettes without health risks. When the Big Tobacco Companies settled, they were required to release documents detailing their plan. Today, we will examine whether or not juul used these documents as a model to for their own marketing campaigns. Before i conclude, i want to make one thing clear. The most important task ahead of us today is to help prevent health risks. But to effectively do so we must trace the origins that led to this epidemic, expose the Health Risks Associated with vaping and hold accountable anyone and everyone who knowingly put children in harms way. Th that, i would like to recognize the Ranking Member, jim comer. I thank our witnesses. We know beyond a shadow of the doubt that are smoking is dangerous and linked to 480,000 preventable deaths. But these deaths are only preventable if an individual stops smoking. The Research Suggests that Electronic Cigarettes are 95 less harmful than tobacco cigarettes. The focus of our hearing is focused on one manufacturer, juul. What concerns me about this hearing is once again this committee is using its Oversight Authority to bring in another private company and question them about their business. While this is certainly an important topic because of the legislation pending in congress, i would like to emphasize that i hope this subcommittee will provide oversight of government. We are the Government Oversight Committee not the private business oversight committee. This hearing has been an interesting experience. A senator testifying spreading out over two days and numerous. We are examining juuls im interested to hear from juul on the topic of this hearing. I hope the discussion will be respectful. Ago, thew Years Company was started in a stanford dorm room and it has grown to be valued at over 30 billion and represented over 60 of the ecigarettes market. Their product was never meant to be used by juveniles. The potential for Harm Reduction suggests that products such as juul should be considered a component of cessation. There is a growing consensus in the Scientific Community that ecigarettes are less harmful than Tobacco Products. Studies have found that the use of was associated with Smoking Cessation. Thing,e clear about one no one wants kids to use tobacco. No one wants kids vaping. No one wants Vaping Companies to target children with advertisements. Juul needs to recognize the senate has an Important Role to play in deterring new smokers. Im sure we will hear more from juul and their testimony. If Congress Moves ahead pursuing more regulations for these products, we should know the effects on positive Public Health alternatives. Prematurely over regulating companies such as juul could one a disastrous effect impeding access to a product that helps Smoking Cessation. The way this hearing was presented to the minority and the public was we were going to have one panel. I see we have switched to two panels. Makinge a reason we are the change . That was never agreed to. We added a witness. But we never agreed to have them testified together. But they are here and i thought we agreed that we are going to have one panel. You waited a half an hour to start the hearing even though we were here. Im looking at what makes sense in a practical sense. The way it was noted to us was there would be one panel today with witnesses from juul on that panel. We provided notice of two panels. That is how we are going to proceed. We will allow they witness to give his opening statement. We are joined by the cofounder and chief product officer of juul labs. Point of order. Im working looking at the notice. While i really respect the perhaps he has been misinformed as to how it was noted. Talk about two panels. Maybe the first panel was senator durbin. I have the actual the notice has been posted on the website for days. Thell have to waive you on committee. I guess the question is, what reasonable reason do we have two panels . We have a lot of material to get through. So were going to have two panels. The second panel will have another witness. It will balance out. That is how we are going to proceed. I need to waive you on so you will participate. To represent the notice. One last point. The two panels were yesterday. Today has always been one panel. We have a grand total of three witnesses. And youre going to divide them up even though you waited a half an hour to start the panel. It was not how you portrayed it or announced it. But you are going to make the change at the last minute. Even though all three witnesses are here ready to testify. Thank you. Today we are joined on panel one by the cofounder and chief product officer of juul labs. If you would please rise and raise a red hand begin by swing you in. Do you swear and affirm that the testimony you are about to give is the truth, the whole truth, and nothing but the truth, so help you god . Record show that the witness answered in the affirmative. Thank you and please be seated. The microphones are sensitive so please speak directly into them. Without objection, your written statement will be made part of the record. With that, you now recognized for five minutes. There is a lighting system in front of you. Green means you are in good means speed up, and read means please stop. With that, you recognized for your opening statement. Thank you. My name is james monsees. Labs and i nowl serve as the chief product officer of the company. I am grateful to be here today to address you all. From the moment we began the journey that would lead to the juul system, we were clear and our goal. To help her to improve the lives of adult smokers. We never wanted nonnicotine users and certainly nobody juul underage to ever use juul products. The data clearly shows that a significant underage americans are doing so. This is a serious problem. Our company has no higher priority than fighting it. To understand our stance on important to it is understand how this company came about. We smoked and we tried to quit and we failed. We were on our way to becoming nearly one of the 500,000 americans who die each are from smokingrelated disease. For us, giving up smoking required an alternative that did not exist at the time. To invent juul labs one. This promises to do what no technology has done. Help adult smokers stop smoking combustible cigarettes on a widespread and consistent basis. Recent behavioral studies find that almost half of adult smokers who purchased and used products switched completely from smoking cigarettes in six months, a fact that we could not be more proud of. That study combines with realworld experience. In 2018, cigarette sales to client 5 , the fastest rate of decline in a decade. Mr. Chairman,s put simply, juul labs is not big tobacco. We are here to eliminate its product, the cigarette. In 2018, cigarette salesour difo manufacturers is fundamental. Our product does not involve burning tobacco, which unleashes 7000 chemicals, at which to 50 of which are known to be harmful. Products to contain nicotine, which is addictive, but they are not directly responsible for the many diseases related with smoking. Public Health Authorities have concluded that vaping is a fraction of the risk of smoking. 95 less harmful and of negligible risk to bystanders. Our companies incentives are totally different than those of Tobacco Companies. Traditional Cigarette Companies face a saturated, concentrated Global Market. 0. 3 of reached just the Global Market of one billion smokers, 70 of whom actively want to quit. Our incentive is to help them achieve their goal of transitioning from cigarettes. It is an astonishing business opportunity. And it is a historic opportunity for Public Health. Underage use of our products does not advance the goal, it imperils it. Unlike cigarette manufacturers, our company swiftly big and acts upon Public Health data. We embrace appropriate regulation. We have acted voluntarily to restrict our own practices in service of Public Health goals. These actions including ceasing certain products, investing our own funds to drive retailer compliance, and practically activating for raising the legal age to buy our products. We believe that the steps we have gone a taken long way to driving down underage access and usage of vapor products. We are prepared to do more. We have met with many of our sharpest critics and have sought their suggestions for how we can improve. We remain open to their input. Cooperatingtted to with this committee, the state attorney general, and other officials who wish to examine our practices. We are dedicated to learning from our mistakes and not repeating them. So, we hope to earn the trust of this committee, congress, regulators, customers, and the american public. There grateful for opportunity to discuss these important topics and look forward to answering your questions. Thank you. I would liketion, to enter some exhibits that are going to be referenced during the questioning by different members. Exhibits 130. I now recognize myself for five minutes of questioning. On august 17, 2006, a judge ruled that Phillip Morris and other Big Tobacco Companies were liable for intentionally marketing to youth while denying the Adverse Health effects of smoking. Are you familiar with the case . More or less. Philip morris owns the marlboro brand. And Philip Morriss parent now owns 35 treo, of juul. A doctor and professor from stanford testified under oath before the subcommittee that you confirmed to him that you reviewed stanfords Online Library of cigarette advertising and found it, very helpful as you designed juuls advertising. Did you meet him . I did. But i did not make that statement. So you are under oath in your denying that he made that statement . Unfortunately he may have misheard my commentary. The resource he compiled is a useful resource. We were very interested in understanding more about the historical bad actions of Tobacco Companies. Were veryint, we interested in using his resource to understand exactly what bad actions those Tobacco Companies took to familiarize ourselves with how not to run a business. So you deny his statement under a . Under oath. I would like to put his exertion and contacts context. These images contain a few different images. Right over here is a picture of marlboro. In the middle is the original juul design that you came up with. On the far right is the most recent juul design. Early on in your advertising, you entered into a settlement with Philip Morris. In a set of portman its that you said dueto us, to requirements in that settlement, we removed all juul branding that use triangles and diamond shapes. You settled a lawsuit with Philip Morris where you alleged they alleged you copied this . That was what they said. How much did you pay as part of the settlement . Zero dollars. It involves no exchange of money but it required that you abandon the triangles and diamonds that are similar to marlboro. To theever designed product to look anything like marlboro. You deny that they look similar . I do deny. You are comparing a piece of packaging to a piece of product hardware. There was never any intent. The last thing we wanted was to be confused with any major tobacco company. The board minutes say due to the settlement, we removed all juul branding that use the shapes. Do you deny that was set in your board minutes . I did not deny that. Use ould requests that you provide us with the agreement within two weeks. I will have to get back to you on that. I dont see why that would be a problem. We will subpoena it if that is required. The doctor testified that marlboro is the leading youth initiation cigarette, so it says something that juul chose marlboro to emulate. Lets look at the flavors highlighted in the sad. This ad. On the right are marlboro products, on the left are juul products. The colors are very similar. One of juicing thing i would like to point out is the flavors. T, creme,meant min mango, and virginia tobacco. Which is your bestseller . Currently, after we pulled all of our flavored products off the market voluntarily and now theyre only available on our website with age verification. The topselling product is the mint product shortly followed by virginia tobacco. Is correct. It is a flavor . It is a mentholbased product intended to appeal to consumers who are using mentholbased cigarettes. Can you please put slide three up . You took out a fullpage ad in the washington post. You said, taking flavored products out of stores. The problem here that i see is that you left what you call a mentholbased flavor in the stores. That is correct. Mint is still a flavor that is available overthecounter. According to the 20162017 population assessment for tobacco health. Youths started with a flavor product. Flavors have kids, and though you say you took all the flavors out of the stores, you left the mint flavor. With all due respect, i think that what you will find is these were unprecedented actions that we took. Concerns. Hese i agree with you that we should be concerned. Ever since we first heard these concerns, we look to ourselves without a regulation coming and being imposed upon us. We took these actions in and of ourselves. The products that we pulled from market, the flavored products, represented more than 50 of our business at the time. I cannot imagine a more thatnsive, proactive step we could take to exactly the point youre making. But when you are pulling the other flavors of the market, mint took the place. Do you disagree with that . I do. What is mostly taken the place is illicit, illegal products. Mint in your stores or not . It is. Great to have you here. Everu feel that juul has purposely use deceptive Marketing Tactics that say the products in a harmful . Never. What was the purpose of creating fruity flavored pods . The purpose of flavors is to create a more efficacious solution. The mission of this company is to eliminate death and disease. To improve the lives of adult smokers around the world. We know that 70 of those people want to quit. There were a number of tools that we use when we were designing the juul platform. We could see opportunities to make a product that could be superior to cigarettes. That would make cigarettes obsolete. Is thatsee in studies index onproducts over switching efficacy. 54 of adult smokers who pick up juul and use juul quit smoking entirely after a sixmonth. That number continues to grow up. When thosehigher consumers have access to flavored products. You essentially created the company to disrupt the cigarette industry . Smoking cigarettes is the leading cause of preventable death on earth. It kills almost 500,000 americans every year at the cost of 300 billion. Are you concerned by the number of teenagers who report vaping or using juul. I could not be more concerned about that. Was your product ever intended for underage use . No. Absolutely not. 100 not. So you never intended on that product having the rates of underage usage that it apparently has . Longfortunately, the history of tobacco is also the long history of underage use of Tobacco Products. For as long as they have been available, underage consumers have access them and use them. Always a legally. I was one of those people. I bought this product illegally and use them. There has not been a lot of advancement in the way we control access to those products. In building these products, not only are they not designed for youth, it imperils the business if youth uses this product. Andfully this committee everyone we can get our hands on can help us create industrywide practices. We are trying to improve what those practices should be an candy. There is no higher priority for this company. What steps are you taking . Year, we have taken escalating steps as we learned about this problem. Most of the criticism we received is that come directly to the company. Wouldcome that and we love to work more directly with people who have critiques. But when we hear that criticism, we take this seriously and we take action. Move escalating steps through to one i want to highlight. 50,000 50 of our revenue off the market proactively. There was nothing requiring us to do that. We were hearing a lot of critique about flavored products. Left on the market were tobaccobased and mentholbased products. Just the same way that cigarettes exist on the market. Have you been working with the fda to institute any changes to the Regulatory Environment to prevent youth use of your product . There have been some conversations the fda has taken up with us where they provided some guidance on how to run surveys. When we want to better understand the usage issue, it is very difficult for us to study youth directly. Had a the ways we have valuable, positive relationship with fda is just getting guidance from them on how we can better study usage. I want to set the stage really quick, because we have a recurrent acquisition or investment by altria that doubled the value of juul. We also saw a recent uptick in tactics by Big Tobacco Companies. I have an article i would like to enter into the record about juuls lobbying efforts. Just today on my phone i was reading a political article and an ad theft up about juul. I want to talk about influencers that are pushing the product. I know social media is clearly the place where young people are getting a lot of information. Influencers are social media users who have large on my followings and established audience credibility. Many companies, from clothing to cosmetics to food and beverages, sign contracts with known influencers on instagram to sell their products. Are you aware of what an influencer is . I am generally aware. Population, growing companies now have the ability to influence through smartphones. Just out of curiosity, do you happen to know off the top of your head to create an instagram . Ccount mr. Monsees i dont. Hill 13. You say you do not have a traditional celebrity or Influencer Program. Is that response accurate . Mr. Monsees i believe it is. Rep. Hill exhibit four is a contract with an influencer or ram program. It wanted to curate influencers in los angeles and new york. Is that correct . I dont have a copy of that document. Rep. Hill we will be happy to provide one for you. Did you fail to mention these . Mr. Monsees i would have to at least take a look at the document. Rep. Hill it is information you provided us. Exhibitees there were a lot t five, and contract dated july 20 7, 2015 to secure socialmedia buzz makers and to develop influencer engagement effort to establish a network to leverage for juul. So that was not the only company you hired to engage influencers like this, there are others. Correct . Mr. Monsees maybe i can help cut this short a little bit. There were a number of Different Things that we tried early on in pursuit of the mission of this company. We know that of the billion smokers globally, 70 want to create. We also know that. 4ounger consumers, it is 253 would be the target of our initial campaign, because what we found was that they would be more receptive to the Technology Solutions that hadnt been available before. Rep. Hill i want to get to a couple of other things. Exhibit six is a may 6, 2015 a male from your field Marketing Manager who oversaw parties. A quote saying we have a target to build 1000 juul influences internet is. Identifying 29,000 influencers. I realize youre saying you are doing this to target young people, and that is fine. 4,2015, there is any mail saying that he will introduce juul to over 1. 5. Illion people in the letter to the subcommittee, you said you do not have a traditional celebrity Influencer Program. But in 2018, a juul document details steps your team had already taken, and we continue 2018this to december 5,. Influencers. Casted do you still maintain he did not have an Influencer Program . Mr. Monsees to the best of my knowledge, i am sorry, are you talking about a paid Influencer Program . Rep. Hill no, we are talking about a Influencer Program. You are on the record. You said a moment ago that you did not have a traditional celebrity or Influencer Program. Do you maintain that. Chairman krishnamoorthi i will let the witness answer. Mr. Monsees bezos agree or getting into territory and not familiar with. I am more than happy to look at rep. Hill i will ask you to respond in writing in the followup to this about your influence of program and whether you would like to revise your statement that you did not have a traditional celebrity Influencer Program. When kids learn about a dangerous product from influencers on socialmedia, it avoids the knowledge of parents, which could help explain the way juul got its product into 20 of influencers before parents had even heard of juul. Thank you. Chairman krishnamoorthi think you. I now recognize congresswoman miller. For questioning. Rep. Miller thank you. , yesterday and no hearing with Public Health experts, we heard about how important noncombustible cigarettes can be to help adults quit smoking. What is juuls success in helping adults quit . Mr. Mr. Monsees there are number of different studies that speak to the category in general. The new england journal of there was ad twotime higher likelihood of quitting once consumers use. Cigarettes there wasnt of a controlled study that showed a 77 increased correlation including and in the journal of addiction, which is a survey data of close to 19,000 smokers that is also associated with a double tendency to quit. What you asked in particular was how well juul does. Traditional nicotine replacement therapies which are generally regarded as the Gold Standard those arequitting, the nicotine patch or gum form typically. The efficacy rates of those hover just below 10 or so. Large study a very of juul consumers, ask who had x smokers who had picked up juul. , and this was not ask him reduces a research study, a thirdparty independent agency run a study that we funded and what we found was , 54 of those smokers had stopped smoking completely for a minimum of 30 days already. The most interesting part of the study is that if you follow that out further to 180 days, the number continues to go up dramatically. Oppositeis quite the of what happens with traditional nicotine replacement therapies. Rep. Miller i think we can all agree that it is important to keep these products out of the hands of underage use while also ensuring they are available to adults who would like to quit smoking combustible cigarettes. Juul products can be bought both instore and online, correct . Mr. Monsees that is correct. Although the kinds of jewell juul products at the store are Still Limited in scope. Rep. Miller when an individual buzz a product in the store, what are the steps they have to go through to ensure they can purchase the product . Mr. Monsees when a consumer buys the product online, it is only available by juul. If you find it on the different website, it is an illicit product. No one should purchase the product from anywhere else online. Websites pop up constantly now. We take down tens of thousands of these websites selling illicit products that dont have good Quality Control standards and are breaking the law in a different way. When you come to our website, we dont just ask you your age, we actually register you as a user of age what we. Will do is first of all check your i. D. , do an i. D. S can, we run that and make sure the person who exists is of a valid age. What we sometimes will do is look or ask for the last four digits of someones Social Security number. What we have started to do, and this is even much more sophisticated is actually use twofactor authentication in nearly all circumstances, winning the user has to enter both their name and phone number. They get a text message on their phone. And hase is registered a credit check around when you register that phone to the individual, not just to the family, that verifies exactly who that person is and what age they are. Those credit checks use public akin to what you would check if your looking for a loan to buy a house. Rep. Miller i think i am out of time. Mr. Monsees sorry. Chairman krishnamoorthi thank you. I now recognize congresswoman presley for five minutes of questioning. Rep. Pressley thank you, mr. Chair. I want to ask the fdas process ecigarettes. And other rules, convicting products which were on the market prior to august of 2018 could avoid fda regulation. Can you explain what it means for a product to be in the market before that date . For example, let me be more in onec, would selling single store be sufficient . Mr. Monsees would it be sufficient to run a business . Rep. Pressley v the question again this let me read the question again. And are the fdas role, vp of that were on the market prior to august 8 2060, the date in which the rule went into effect would avoid fda regulation. Could he explain what it meant to be on the market before that date, what does it mean . Mr. Monsees my best standard wasof the at the product had to have been offered for commercial sale. That is the definition of the rule . Mr. Monsees did you rush any products onto the market before the august 8 grandfather date in order to beat that Effective Date . Mr. Monsees we did. Anything that is a fair way to put it. This is what effectively every product in the category was facing . Two,onsees so exhibit unfortunately our screens are not working, but i can recite in a february 2, 2016 internal email, six months before the grandfather date, from Sarah RichardsonCommunications Director and juul such executive director for marketing, the email says wanted to recap you on our chat this a. M. Messaging i. E. S regarding nicotine levels, choose. And number one, we dont want to frame these launches as being a test or a shortterm skew, limited launch or limited location is preferable. 2, we also dont want to imply anything around timing for expanded availability to protect ourselves, as many of you may very well not that many may very not be available by the end of the year. So you did try to introduce limited runs to beat the grandfather date, correct . Mr. Monsees i already committed to that. Rep. Pressley very good well, very bad. Why did you not frame these launches as being a shortterm skew . Mr. Monsees i will give you one specific example here. When we were first launching a Small Company with very limited resources and we had wanted from the very beginning to have a number of different nicotine strengths available to consumers. When we were faced with this did do aer date, we lot of light work done to develop all these products and actually push them out. We did actually sell those products to consumers. This was in general what the whole industry was doing to try provide optionally in the situation. Rep. Pressley what i am getting at and what is very disturbing about this and problematic, is that it seems that your looking to circumvent fda regulation. That is what is trouble some about this preparatory and what you are corroborating here today. Because juul did not want to imply that they were going away, but in the , acknowledges that many may not be available by the end of this year. Mr. Monsees right, so as i said. Rep. Pressley sorry, i am reclaiming my time. How many limited launches to you introduce after this email and how many are Still Available today . Mr. Monsees i dont know exactly. Rep. Pressley ok, you can get me. To exhibit three is from august 12, 2016 board minutes. It shows the volume of products juul tried to introduce between december of 2015 and august, 2016 when the rule went into place. You added three juul starter kits, 11 juul device colors, 17 pot flavors with seven major juice brands. To anyone 21 bottle juice flavors and three nicotine strengths. That is a major push. Mr. Monsees that is absolutely correct. Mr. Monsees , yes. Rep. Pressley so is your belief out of that is grandfathered and therefore shielded from fda regulation . Mr. Monsees we have a very limited set. Rep. Pressley yes or no. All ofour belief that this is grandfathered and therefore shielded from fda regulation and therefore that is why you rest these products . Mr. Monsees every product on the market now was not rushed. It was legitimately on the market. We have no intention of introducing any new flavors whatsoever until after the pmda takes place. Chairman krishnamoorthi time has expired. I now recognize the german from north carolina, mr. Meadows. Rep. Meadows thank you, mr. Chairman. We have two computing narratives, one is a desire to help people get away from traditional smoking, is that correct . absolutely. Rep. Meadows member of Congress Whose father died from lung cancer, i am sensitive to narratives, one of trying to get people away from those carcinogenic Tobacco Products and then yet at the same time, the number one complaint i get from teachers is all about the vaping in schools. Those other two narratives we have. Manager help. You said we need your help. What we have to do is really be very strong in making sure that doesng does not vaping not get in the hands of our youth. Would outlawing the product for anybody under the age of 21 help . Marcie that has actually been our crusade. For the past i believe it was the past nearly two years or so, we have been pushing for the regulation. I tell you where that will help, we believe substantially that within high schools, our best understanding right now is that social sourcing, meaning essentially one student buys from someone whos actually above the legal age of purchase cells or gives the product is eagerly to another student. Distance, it is much harder for someone in high school to find a willing participant to illegally by products and distribute them to minors. It goes over the long way in prevention. Rep. Meadows . Rep. Meadows so. Rep. Meadows you are saying you support outlawing these products for anybody who is not 21 years of age or greater, is that correct . Mr. Monsees absolutely, all Tobacco Products. We are strong supporters of the tobacco 21 bill. I think we have seen tremendous progress on it. Sounds like by the end of next year, over half of the people in this country will be covered by tobacco 21. I know there are number of people who have long fought efforts of trying to push to look at anyone, but i think our support has really pushed that over the edge substantially. Rep. Meadows there are number of bills floating around on both the senate and the house side. I know that diane has one that we have supported. That you have given over 180,000 pages of documents to this committee for review . Mr. Monsees that is my belief, yes. Rep. Meadows 180,000 pages of documents for this committee to review in terms of your intentions and what you did, and what he should have done. So i can just tell you, i have been on this committee, this is my fourth term in congress to be on this committee, and that level of participation is certainly unique. In fact, i would say it is greater than most federal agencies in terms of their responding. Many of those 180,000 pages of documents have you redacted most of the information on this, or are there blank pages . Mr. Monsees i believe none. Rep. Meadows so in that spirit of transparency, here is what i that ask you, is knowing your goal is to help people get off traditional Tobacco Products , in north carolina, i can tell you, we know tobacco, and vaping has gone to be a big problem in high schools. Problem in a big terms of typical cheering of tobacco and the like like. G tobacco and the how can we address the increased. , andine use among youth then at the same time not prohibit . The chairman was talking about mint, lets be clear, it is menthol. And let us also be clear, that users of menthol products have a unique demographic. I see menthol being very different than bubblegum or con candy. Would you agree with that . Mr. Monsees 100 , sir. And this is one of the major unfortunate facts, that as a result of our action, pulling our favorite products of the market, the market has been backfilled by a number of thirdparty manufacturers, mainly chinese flybynight companies with little to no manufacturing practice. We have raided a number of these facilities in china, and it is startling what you will see, the low quality standards there. This is what is backfilling these products and actually giving us, oddly enough, a much worse reputation. Because now people believe that juul sells cotton candy flavored products. Rep. Meadows here is what i would ask, three things that i think would help this committee. Neg to help us identify those areas that are counterfeit, and preying oneally prayin the lives of teenagers, be in marketing or importing from china. Is, more than just outlawing it at 21, what are other steps we can do to make sure he doesnt get in the hands peace, and thirdly, how are you willing to partner with congress to accomplish the first two . Mr. Chairman, your back. Chairman krishnamoorthi thank you, mr. Meadows. Without exemption, representative Wasserman Schultz from florida will be permitted to join and question the witness. I would also like to recognize that our chairman is with us as well. Miss Wasserman Schultz committee have five minutes. Thank you, mr. Chairman. Returnciate your alarm participant. The rise in smoking in children is really rising. This year i introduce the protect act, which would authorize funding for ac Dc Initiative to address the Public Health epidemic. I know that your company is supportive of the act and i appreciate that. I want to take your Statement Today in good faith, they are taking the epidemic of youth cigarette use seriously. I am hoping you can offer me some answers and some clarity. When your products enter the market, the ecigarettes contained about 1020 millimeters of liquid. They removed the harshness in the bad taste of nicotine, and then you tripled the nicotine content in the product, making them the most potent products out there. Kept. K. And the e. U. Have the amount of nicotine in their products to a third of the amount in your products. It was capped at 20 milligrams per litter, calling juul products a grave danger to Public Health. You recalled your 59 milligrams per milliliter product and enter that market in israel with a 20 milligrams per milliliter product. Correct . Mr. Monsees correct. Rep. Wasserman schultz so juul has, determined it can make money with products with less dangerous nicotine levels. Could you believe you can accomplish her stated mission of helping adult smokers quit smoking conventional cigarettes . Mr. Monsees let me provide a little context. So the first concentration, the 5 products you are talking about right now were designed to mimic but never exceed the pharmacogenetics of cigarettes. Rep. Wasserman schultz i want a clear answer, can you achieve your stated mission of helping smokers quit smoking conventional cigarettes using a 20 milligram per milliliter product . Mr. Monsees we would love to try. Rep. Wasserman schultz you are in everyrying country but this one. You fail to mention the participants in your study were using liquids below the 20 milligrams per milliliter number, nowhere near the 59 level in your u. S. Products. Late last year, it was reported that juul began developing a pod that would comply with the 20 milligrams per milliliter cap, but would also increase the voltage and temperature of the device but therefore deliver more nicotine into the blood. Is that accurate . Mr. Monsees i am not sure what you are referring to with fault agent temperature. Rep. Wasserman schultz the actual delivery device where you are increasing the voltage and the temperature of the device having a 59ssistin milligrams per milliliter cap, you would go down to 20 but deliver a more potent delivery of nicotine into the system. Is that accurate . Mr. Monsees i am not aware. Rep. Wasserman schultz if you could answer the question for the record, i would appreciate that. It is mindboggling that you dont know the answer. Are you aware that this would make the pots even more addictive and heighten the risk for young people, if that were the case . Mr. Monsees if we were to increase the voltage . Rep. Wasserman schultz and the temperature at which the liquid is delivered . Mr. Monsees our products are temperature control for product safety. We are the only product in the market that is temperature controlled. We would never increase the temperature. Rep. Wasserman schultz so you are saying that this is not accurate . Barbara lee, juul has been supportive of regulations, but your actions speak differently verbally, juul has been supportive of regulations, but your actions the differently. You appear to be market yourself as a Smoking Cessation device, however, you are not fda approved for that purpose. And your products highlight why that is the case. Fda approves Smoking Cessation products for weaning off nicotine entirely. Mr. Monsees, do your products come with these instructions . Mr. Monsees they do not. We would never market them as a Smoking Cessation product. Juul is not a sufficient product. Rep. Wasserman schultz so you dont market that is news to me and probably everyone in this room that juul is not marketing yourselves as a nicotine or Smoking Cessation product. Every other vaping product except yours . When someone starts on juul, would you have any problem keeping them as a customer for life . You dont want to use your products as a Smoking Cessation tool, you just want people to be addicted to nicotine their entire life . Mr. Monsees absolutely not. 70 of the worlds one billion smokers want to stop smoking immediately. The most important thing they can do to improve their Life Expectancy is move away from cigarettes. That is the stage we are at right now. Juul does a great job of. Rep. Wasserman schultz do you consider yourself part of big tobacco . Mr. Monsees i consider traditional Big Tobacco Companies as a major investor in our company. Representative Wasserman Schultz actions speak louder than words. I appreciate the time, mr. Chairman. Chairman krishnamoorthi thank you, congresswoman. I now recognize the congressman for five minutes of questioning. I will just follow up on the last thing. Is there any correlation when juul and similar products came to the market, and the rate of growth sales . Mr. Monsees sure. Since juul came on the market, cigarette sales have declined quite a bit. In 2018, we saw a 5 decline from the tobacco market. We are seeing yearoveryear declines of about 8 in the traditional combustible market. How long have you been available in the country . Mr. Monsees i would say we began to be widely distributed sometime in 2016. Rep. Grothman in general, when i spea think of ecigarettes, i think people trying to stop smoking. Do people buy your products for that reason . Yes. Onsees nearly everyone uses our products as an alternative to products. L tobacco rep. Grothman there have been a lot of things on the market my whole life, nicotine gum, blah, i know somebody who couldnt quit at all. Was know she used juul, but never able to quit smoking. Have there been studies done comparing how effective your products are to these other things . Mr. Monsees not necessarily direct studies or studies looking at one versus the other but the efficacy rates of nicotine cessation therapies which ar you are i believe speaking to, are well known. There are studies of ecigarettes by the new england journal of medicine regarding Tobacco Control and addiction, all are very well respected and relevant studies, that generally show that for the improvementout a 2x in cessation, or the ability for a consumer to stop smoking completely. They vacant to using ecigarettes afterwards, but they have stopped using cigarettes they may continue using ecigarettes afterwards, but they stop using cigarettes. One of the studies looked specifically at, does anyone continue using these products. All the studies i just mentioned are great, but they dont study juul. The studies we have commissioned via a thirdparty Research Laboratory looked at about 18,000, i believe it was about 18,000 juul consumers on a longitudinal basis, smokers who picked up juul. 54 of those smokers quit smoking completely within the days. 90 they had to abstain totally from using these combustible cigarettes for over 30 days at that point. And if you follow out the data on an even longerterm basis, the numbers continue to go up. You are asking about traditional cessation products, the interesting thing is that while the efficacy rates for those products looks meaningful, not nearly as promising as 54 percent, the longterm efficacy of those products tends to go down quite substantially. The longerterm efficacy for these studies on juul continue to go up, as much as 80 . These are huge opportunities for Public Health. Any grothman and i take it health downsides i know a guy he hadt smoking, years. E gum for 25 it worked, but he had it for 25 years. Your product is widely more healthier than cigarettes . Mr. Monsees yes. Rep. Grothman i will give you another question, i didnt know ,f you have thought of this given that many more people have stopped smoking with juul or similar products than these other things like the patch and that, and given that Life Expectancy for cigarette smokers goes down, do you know how many lives have been saved so far by people using juul compared to these other things . To say,ees it is tough because it would completely depend on them staying off cigarettes. Rep. Grothman why dont you i would think someone would be happy to brag about this in your company. Whether you have people go back and pencil the paper the percentage of people, quitting with gum, percentage of people quitting with juul. Make a stab at how many Leisure Company has saved so far. Mr. Monsees i would be happy to do that. Mr. Monsees . Rep. Grothman make a stab at how many lives your company has saved so far. Mr. Monsees thank you. Chairman krishnamoorthi when you say i dont know, it is actually lying. I just want you to know that. If you say you dont know something that you actually do, it is the same thing as alive. I just might you to know that. Extent ofs, when the the epidemic became clear and Health Agencies to juul as the source of your problem, instead, use of the transition to marketing juul as a healthy alternative to cigarettes for to. Rs to quote switch you this, yes ask or no, smoking cigarettes, correct . Mr. Monsees correct. Rep. Tlaib and switch means juul . Mr. Monsees correct. Rep. Tlaib the ad says switch, followed by no other mentions of start smoking again. You were a smoker. Does this add give a smoker hope that there may be a way to quit cigarettes for good . Mr. Monsees i think the intention of this ad is to make it clear to consumers that there is an alternative finally to combustible cigarettes. People. Of those rep. Tlaib do you agree that the ad conveys that your product can help smokers quit smoking cigarettes . Mr. Monsees i think what the ad what we have tried to convey with the ad to the best of my knowledge. Rep. Tlaib were trying to get away around fda regulations, but the fda regulate Smoking Cessation devices the things that actually help, people quit smoking. By juul has avoided. Exquisitely calling itself a Smoking Cessation device, which helps them avoid this particular fda regulation. I imagine you chose your words very carefully in these ads. Did your lawyer tell you that this ad was not claiming to be at therapeutic cessation device . Mr. Monsees we do not plan broadly. Rep. Tlaib did your lawyer say this does not convey that . Mr. Monsees i am giving you an here. Roader answer we did not plan for juul to be a cessation product. Me tell you exactly why the history of cessation products is extremely low efficacy. That is a problem were trying to solve. If we can give consumers an alternative and market it right next to other cigarettes, then we can actually make something work. Rep. Tlaib did your lawyers tell you that the word switch and switching were not therapeutic claims . Mr. Monsees i dont recall exactly what our lawyer. Rep. Tlaib are you allowed to say that your products are healthier than cigarettes . Mr. Monsees i believe in these chambers, we are allowed to say that. Rep. Tlaib you must feel really constrained right now. Mr. Monsees maam. Rep. Tlaib if you say that your products help people quit cigarettes the fda would regulate you. But if you say your products are safer, the fda would regulate you. You created a team of 20 people to pitch products to companies that you made to help people quit smoking. You hired douglas roberts, former executive and health care to run that team. Where would you do that unless you were conveying that juul is effective for Smoking Cessation or healthier than cigarettes . Mr. Monsees i think the real opportunity here is to improve the lives of the billion people worldwide. Rep. Tlaib why would juul call employers and insurers about the Health Benefits of juul . Mr. Monsees i just explained that. There is an opportunity here for Public Health. Why would Insurance Companies not want to explore all options to save peoples lives. Rep. Tlaib so if you make the direct statement to the u. S. Government that your product for a Smoking Cessation device, or as you have been telling other folks have the other cigarettes, you would expect them to be regulated, wouldnt you . Mr. Monsees i cant state more emphatically, juul is specifically and on purpose not a cessation product. Rep. Tlaib on june 14, juul sent a letter to the u. S. Trade representative about trumps tariffs on lithium batteries which are used in your products. You state imposing a 25 duty would indirectly increase the cost of health care. Leveling an additional duty would cause undue harm to consumers who are hoping to improve their lives by reducing or eliminating the use of Tobacco Products. Making jewels products cost prohibitive making juuls products cost prohibitive would lead them to return to the use of Tobacco Products, which may increase the cost of health care to customers as well as u. S. Health insurers. How are those not there at claims that your product is a multicessation device and not healthier than cigarettes, mr. Monsees . Mr. Monsees sorry, i have never seen that document before. Course not. Of mr. Chairman, if i may, one study found that every adult that successfully switched to ecigarettes, to eventually none products, teens like my son behind me, young , but try ecigarettes will eventually become daily smokers by the age of 40. , thank you, mr. Chairman for this hearing and for your leadership on this issue. Chairman krishnamoorthi thank you, mr. Congresswoman. Thank you mr. Chairman. Mr. Monsees, you have a product that consumers like, dont you . Mr. Monsees certainly. If i understand the story right, you and your friend are young people sitting around in college and said, you know, we will develop a product. We would like to develop a product that is much less harmful than traditional cigarettes, could actually be a way to get people away from smoking traditional cigarettes, and you actually did that, right . Marcie correct. Rep. Jordan when you started marketing the product, did you follow the law . Marcie we did. Rep. Jordan you never broke any laws when you have 70 market growt share growth . Mr. Monsees sounds about right. Rep. Jordan so you had this amazing product, this tremendous market share growth and you follow the law the entire time, is that right . Mr. Monsees i believe so. Rep. Jordan people want a product that will take us away from more harmful, traditional cigarettes, and products that can help you phase off using nicotine altogether and somehow you are a terrible guy. Mr. Monsees this is a very complex company, no doubt about it. In a large part, empathetically, went to really express this this is not my favorite thing, to be here today, but i do mind. Because this is extremely important. I very much understand the skepticism. This is an industry that has done long for a truly long less has done wrong for a truly wrong an industry that has done wrong for a long time. And we want to change that by developing products by a company that is 100 committed to changing the fabric of this market, to eliminating cigarettes for good. And we are seeing that these tools actually work. Stated, by thes chairman extremely well at the beginning, we dont want any underage consumers using this product. We need to Work Together to make sure that no underage consumers use this product. It is terrible for our business, terrible for Public Health, terrible for our reputation. None of this is good stuff we want to get on to the business of eliminating vigorous and saving lives. Rep. Jordan even though you follow the law there are some things that took place when you have the amazing growth in market share that youre not changing, is that right . You are no longer marketing on socialmedia platforms . Mr. Monsees correct. Rep. Jordan you are placing limits on the quantity and types of things that can be sold at retail outlets . Mr. Monsees correct. Rep. Jordan even though you follow the law, you dont have to make those changes, you said first traditional concerns you as a company has made a decision to do those things . Mr. Monsees not just for that reason alone. Rep. Jordan and t for the safety of young people . Mr. Monsees and also as an example. I stated this earlier analysis this again, the actions that were taken, we were trying to lead by example, trying to show that we are willing to take independent action to protect young people from access to these products. If those standards were adopted on an industrywide basis, required on an industrywide basis, we could stop these counterfeit products from market. The if other companies were not willing to do these things on a proactive basis, and were held accountable to the same standards, then i believe we would be looking at usage. Tially lower youth rep. Jordan how many people work for you juul . Mr. Monsees 3000. Rep. Jordan 3000 jobs you provide. You develop a product as a way to have an alternative to more harmful traditional cigarettes, as a way to help people move off traditional cigarettes and hopefully stop smoking altogether, an amazing product that now has a 76 growth in market share, you employ 3000 people, you made some decisions early on that you decided to change to make sure young people dont get access to your products, like stopping marketing on socialmedia platforms and limiting a quantity that can be sold to retail outlets, you have come out and said you dont think anyone should be using i Tobacco Products including your own until they are 21, and yet the reward for all of that is that you get brought in front of congress and get yelled at by democrats . Mr. Monsees i think it is just an important mission. Yes, we had 3000 people now. I have never met a more missionoriented group of folks, then the people who come here. We know that there is a lot of stigma historically in this industry. We know that it is easy to assume that we are a tobacco 2. 0, but we are quite the opposite. Rep. Jordan i yield back. Chairman krishnamoorthi thank you, mr. Jordan. I now recognize chairman cummings. Thank you for being with us, sir. Rep. Cummings thank you very much. Mr. Monsees, juul made a statement we are as committed as ever to combating youth usage, but dont take our word for it, look at our actions. We are looking at your actions, and they are deeply troubling. In 2017, the city of San Francisco band favored Tobacco Products. Then Big Tobacco Company r. J. Reynolds tried to reverse that with a ballot measure. The voters rejected big tobacco ban byheld the flavor a whopping 68 . Last month, San Francisco banned the sale of ecigarettes and just like that, your fellow tobacco company, juul is trying to overturn the measure through a ballot measure. But your ballot measure is even bolder than r. J. Reynoldss. Beyond overturning the ecigarette ban, is it true that it would also repeal the flavor ban the 68 of san franciscans already approved . Mr. Monsees i am sorry, chairman. If there is a provision in that, i may be unfamiliar with it. But suggesting that there is a provision in that legislation ban would repeal the flavor on cigarettes, on combustible cigarettes, i am not aware of that. I personally would not support that. Rep. Cummings kids are especially attractive to flavored Tobacco Products. You know that, right . Mr. Monsees we have taken direct action on that. Rep. Cummings i just ask if you agree with that, young people are attracted to flavored Tobacco Products; yes or no . Mr. Monsees we have heard that concern and taken action. Rep. Cummings the National Institute on drug abuse found that 66 of teenager ecigarette users believe that the product on a contains flavoring. They did not realize there is nicotine. It is better to find flavors that are not dangerous for kids. Do you agree . Mr. Monsees i think that was a flawed study. I agree with you that if underage consumers are being attracted to flavored products and getting access to it, that we need to do something about it. Those are the actions we wanted to present to when we pulled those products proactively off the market. Rep. Cummings that your ballot measure goes even further it would preempt local Public Health laws effectively barring local bodies from protecting their communities. Do you believe the juul knows what is best for local communities better than the communities themselves . Mr. Monsees congressman, i am withearly familiar enough my details of that law to comment on it, but i can tell you, you have piqued my interest in it will certainly investigate this with my team afterwards. Rep. Cummings how long have you been in your position . Mr. Monsees the company in some form or another was started at a graduate school back in 2007, so for a long time. Rep. Cummings thousands of retailers have been caught selling your products to children. Your ballot measure also seeks to insulate those peddlers from liability by raising the standard to knowingly selling to minors. If you wanted to keep your products away from kids, he would support holding bad businesses accountable for illegal sales, not adding loopholes. How does making it harder to hold retailers accountable for selling your products to children help keep your products out of childrens hands . Mr. Monsees again, mr. Cummings, congressman, i cant really i dont know the details of that. You have very much piqued my interest. I hear your concerns. Thank you very much are asking the questions in a way that we can investigate and take proactive steps and get back to you. Rep. Cummings what i would do is i would prepare a series of questions for you. And then i will encourage the bring youo perhaps back so you can answer all the questions. Because i think this is a very urgent issue. Thank you very much, chairman. Chairman krishnamoorthi thank you, chairman cummings, for being with us. I now recognize Ranking Member cloud for five minutes of questioning. Cloud thank you, mr. Chairman. What is your role . Mr. Monsees chief product officer. What was it in 2015 . Mr. Monsees i was still ceo of pacs labs at the time. Ceo ined down as september of 2015. Who handles the marketing decisions in your company . Mr. Monsees we have a chief marketing officer now named craig bremmers. Rep. Cloud versus 2015 . , we had as 2015 different chief marketing officer. There was a long gap where we had no cmo, and effectively no marketing department. Rep. Cloud can you touch on how your management changed . You have grown from 2015 to currently, kenny can you speak to that . Mr. Monsees the company has grown dramatically since then. Juul. E first launched rep. Cloud quickly. Mr. Monsees i just have to estimate. We have probably had 70 people in the Company Total back then. Rep. Cloud from 17. Mr. Monsees 70. Rep. Cloud and the Management Team wouldve been how many people . Mr. Monsees four or five. Rep. Cloud and now it is . Mr. Monsees i believe it is 28 people right now. Rep. Cloud and who has the final say on what the companies doing now, operationally or related to marketing . Mr. Monsees it is a combination between kevin burns, our ceo, and then our board, of which i am a member. Rep. Cloud my understanding is that the ceo offered and asked to testify before the committee. Mr. Monsees yes. Rep. Cloud was he denied or permitted, why is he not here today . Mr. Monsees i am not exactly sure why he was whether he was denied. We were told, ashley and, that we were going to testify together. A lot of things have changed that i am just not familiar with. Rep. Cloud would it be helpful to have him here to question . Mr. Monsees kevin is amazing at keeping his pulse on a lot of things at one time. I think kevin could have certainly helped to answer some of these questions more definitively or with more clarity. Rep. Cloud could you talk about what has happened in favors offered in 2015 versus now . Monsees we had flavors on the market in 2015. Rep. Cloud and what have you done since then . Mr. Monsees the flavors have increased a little bit. There is eight flavors now, it has slowly happened, a little bit over time. We have also introduced 3 strength pods as well. Rep. Cloud you have also changed the names dramatically. Mr. Monsees we have also done that. With an excess of caution, every time we hear in a concern about what we can do better, we are responsive to that as possible. We love to do that with a more open dialogue setting. Rep. Cloud i have seen the original flavor names. I was not all that familiar with the product before this, but i could understand the concern. Could you explain a bit of the thinking that went into the original marketing ideas . Mr. Monsees what we saw first of all when we were launching juul was that there was a market for ecigarettes already. And in fact, within that market, 16 percent of underage consumers were already using ecigarette consumers. Unfortunately, those same. Ecigarette products were not resonating with adult consumers. 60 of all adult smokers, before we even launched juul had tried only 3 ttes, but actually purchased those products. So we saw an industry that was failing at a promise that it to, to improve lives. Rep. Cloud you can finish spinning this if you want as well. Why do you think altria has invested so heavily in your company . Mr. Monsees because we represent something of an inevitability i hope. Obviously, we are facing a lot of pressure and scrutiny. But the hope is that we can, in collaboration with altria accelerate the decline and possibly the alteration of their business to one that does not kill people anymore. That is a sustainable business. Chairman krishnamoorthi thank you, mr. Cloud. , you arean t recognized for five minutes. Thank you, mr. Chairman. It has come to the communitys attention that you falsely claimed that he partnered with Stanford University to create a curricular. In reality, you took the researchers work without permission and changed it to suit your needs. Stanfordtrue that issued juul ac fantasies letter demanding that you stop using the misappropriated content . I am notes im sorry, aware of anything along those lines. Rep. Desaulnier exhibit 30 in your book is a timeline in which tellingor details juul stop using her work. She stated that your curriculum standards to be an evidencebased curriculum to fully educate youth and prevent their use of juul. She also said her assessment of a Company Shows a company with a record of misrepresentation, and she also believes that your behavior is typical of big tobacco and comes from big tobaccos. Playbook. Mr. Monsees. I would like to turn to two claims, one that your juu l pot delivers as much nicotine is a pack of cigarettes. A single juul pod is seven dollars cheaper than a pack of cigarettes, correct . Mr. Monsees defending state to state, but it can be. Rep. Desaulnier on an average, 80s, correct . Mr. Monsees correct. Rep. Desaulnier is it true that a retailer makes a higher profit margin selling juul than it does selling cigarettes . Mr. Monsees i dont know if i can answer definitively. Rep. Desaulnier exhibit 27 is a juul retailer education flyer highlighting that retailers make it 36 profit margin selling juul. Your documents show why. Exhibit 28 shows a cigarette manufacturer pays 3. 57 on inrage in the United States taxes on each pack of cigarettes compared to juul,s seven cents. Seems like a nice competitive advantage. That has allowed juul sell its products cheaper than cigarettes and give retailers a higher profit margin. So retailers have more incentive to sell your product, because they make a lot more money selling it thethan cigarettes. Given how many retailers have sold your products to children, do you believe that higher profit margin has controverted to selling to minors . Mr. Monsees no. Rep. Desaulnier you went to stanford. It is not a difficult question. Retailers made more money, so they were not motivated to sell to children . Mr. Monsees would you like me to answer . Structure is to beat cigarettes for adult smokers. Understand. E i rep. Desaulnier the retailer is making more money irrespective of who they are selling it to. You have been marketing to younger people, ergo, you make more money. Rep. Desaulnier we have been marketing mr. Monsees i dont want to come across as defensive here, we have certainly made missteps. I understand the criticism of some of our past actions, but we have moved on. Our earliest Marketing Efforts were targeted to 2534yearold adult smokers. We dont want any of our retailers to sell to underage consumers. Rep. Desaulnier i have got a limited amount of time and am trying to control my anger, to be perfectly honest. Tax treatment aside, would you consider raising it in prices so it was more equipment to cigarettes . We heard senator durbin talk yesterday about how cost affected whether young people by cigarettes are not. If you raise your prices, it would lower the sale to young people. You say you want to lower the sale to young people. Mr. Monsees that is an interesting question and one i think we deserve to debate, absolutely. We are focused on a number of different efforts that we believe to be potentially more efficacious than that particular one that you are mentioning. But it is certainly not off the table. The challenge here is that it is in large part the differential pricing that also makes the product appealing to smokers who otherwise have a 50 chance of dying if they dont move off cigarettes . Mr. Monsees. Rep. Desaulnier exhibit 29, longterm pricing i am quoting this is to investors in june, 2018 to prospective investors is toid longterm pricing reclaim excess margins. You said that your product is insulated from pricing shocks by demand profile. I want to tell you, i have been involved with Public Health for a long time in the bay area; view, sir, are an example to me of the worst of the bay area. You dont ask for permission, you ask for forgiveness. You are nothing but a marker of a poison and your target has been young people. I yield back. Chairman krishnamoorthi ok. That will conclude this first panel with mr. Monsees. They will take a very short break to bring the next panelist up. If the audience would remain seated, we will then expeditiously begin the second panel. Thank you, mr. Monsees. [captions Copyright National cable satellite corp. 2019] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. Visit ncicap. Org] [gavel pounds] thi thank you everybody. We are going to commence the second panel with our two panelists, matthew myers, president of campaign for tobacco free kids, and ashley g