We welcome you and respect your right to be here. We also asked in turn for your respect as we proceed with the basis of the committee today. It is the intention of this committee to proceed with this hearing without any disruptions. Any disruption of this committee will result in the u. S. Capitol police 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 seize the demonstration. If the person does not cease or begin the demonstration after the initial warning i the officer, 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 witnesses ability to express himself. I would also remind all members to avoid engaging in adverse personal references. I now 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 said enough. State attorneys general reached a master some grant more than 20 years ago with the five largest cigarette manufacturers forcing them to stop marketing to kids. The u. S. Department of justice then brought rico charges against big tobacco for their engagement in a decades long conspiracy to hide the dangers of smoking, manipulate the nicotine delivery of cigarettes, deceptively marketed products, and target kids. While we made tremendous progress in preventing youth nicotine addiction at the start of the millennium, we face a much different challenge today. In 2018, more than 20 of high school and 5 of middle School Students are using ecigarettes here in fact, 3. 6 Million High School and middle School Students use ecigarettes in 2018, and increase of 1. 5 million in one year. Saw its share of the ecigarette market probe from 24 76 . The companys growth accompanied a spike in youth by 76 . The surge of ecigarette use caught everyone off guard. It was quickly labeled an epidemic, the fda, and the health and human services. From the documents my office has received in our investigation im extremely concerned about juuls Marketing Tactics targeting youth. Today, we learn how juul effectively used social media to build a youthoriented brand making they being a cultural phenomenon. As an aside before i came to this hearing my wife informed me that my childs high school is now installing vaping detectors. On concerned about youth nicotine addiction. The youth children getting addicted to ecigarette and inability of adults to do anything about it poses an unprecedented challenge. Cigarettes were easy to detect, they produce smoke at a smell that lingers. Ecigarettes are small, easily concealable products that it is only a small amount of aerosol that quickly dissipates. I like cigarettes that have a harsh juul sells many flavors including mango, fruit and mint. In addition, juul contain triple the nicotine content of previous ecigarettes yet 2 thirds of americans between the ages of 15, and 24 do not know that ecigarette contain nicotine. Instead they think it only contains flavors. Yesterday the subcommittee heard from two brave high School Students juul went to the school and gave a presentation that was supposed to be about antiabca2. After teachers left the room the high School Students reported sworn testimony yesterday that juul gave a presentation that painted their vaping instrument as healthy and left kids believing they could use ecigarette without health risks. When the Big Tobacco Companies, they were required to release mountains of proprietary documents detailing their plan. We will another examine whether juul use these documents as a model for their own Marketing Campaigns. I want to make one thing clear. The most important task ahead of us is to help prevent ecigarette you sent nicotine addiction. To effectively do so, we must trace the origins of what led to this epidemic, expose the Health Risks Associated with raping vaping and hold accountable anyone who knowingly puts children in harms way. I would like to represent the Ranking Member, jim comer. I want to thank our witnesses on both panels. I know yesterday we know beyond a shadow of a doubt that smoking is dangerous and linked to approximately 80,000 preventable deaths in america each year. These are only preventable if individuals stop smoking. The Research Suggests Electronic Cigarettes like juul are less harmful than tobacco cigarettes. The focus of the hearing is on one manufacturer of Electronic Cigarettes, juul. What concerns me about this hearing is once again this committee is a using its Oversight Authority to bring in another private company and question them about their business, this is an important topic because of legislation pending in congress i would like to emphasize i hope we will refocus on providing oversight of government. We are the government oversight committee, not the business oversight committee. This is an interesting experience. A senator testifying over todays and numerous panels. Examining juuls role in youth nicotine epidemic. Im interested to hear from juul in the topic of this hearing and hope this discussion will be respectful and seek facts to inform Public Policy decisions. The company was started in a stanford ornament is going to be valued at 30 billion and represent 70 of Electronic Cigarette market. Juul insisted its product was never designed for usage, and will have the opportunity to present their case, steps they have taken to prevent youth usage. The potential for Harm Reduction suggests products like juul will be considered a component of cessation. There is a growing consensus in the Scientific Community Electronic Cigarettes are less harmful than traditional Tobacco Products. And and theyre only twice the usual nicotine replacement, no one wants to use tobacco for kids. No one wants kids using tobacco. And no one wants kids raping and no one wants raping companies to target children with advertisements. It has an Important Role to play in ensuring all possible steps to deter youth smokers. I am sure we will hear more from juul about their efforts to follow. If Congress Moves ahead with additional regulations for these products we should know the effects on positive Public Health alternatives. Prematurely over regulating Companies Like juul could have a disastrous effect that impedes access to one of the most successful products for Smoking Cessation. I look forward to the discussion this afternoon and with that i yield back. I thought the way this hearing was presented to the public is we will have one panel. I see you switch to 2 panels. Initially it was James Monsees and miss gould were supposed to be on the panel together. What is the reason for the change . That was never agreed to. I think miss gould agreed to be on the panel, we accommodated her by having a second panel and added her but we never agreed to have James Monsees and miss gould testify together but they are here and i thought you agree we were going to have one panel, we have 3 witnesses, you waited half an hour to start the hearing even though we were here and weve got three witnesses and you invited two panels. I am looking at what makes sense in a practical sense and the way it was noticed to us is once we had a hearing yesterday, only one panel today with respective witnesses from juul on that panel. We provided notice of 2 panels. That is how we are going to proceed. We will allow the witness to give his Opening Statement. Today we are joined on panel one by mister James Monsees, cofounder and chief product officer of juul labs. Point of order. Im looking at the notice and i respect the chairman and perhaps he has been misinformed to how it was noticed, and the first panel was senator durbin, the only panel that had them together. I have got the actual the notice is posted on the website. I can be a pain, if not, the question is what reasonable reason to we have two panels. We have a lot of material to get through so we have two panels and the second panel will have another witness as well so you can do that. That is how we will proceed and i will wave you once a we can participate. I would like to note the presence of mister meadows and ask unanimous consent that mister meadows be allowed to participate. Without objection mister meadows is waived on. The two panels were yesterday. Today it has always been one panel. We have a grand total of 3 witnesses and you are going to divide them up even though you waited half an hour to start a hearing that was announced for 2 00. I dont get that but that is how youre going to go, it wasnt how you portrayed it or how you announced it or how it was noticed but you are going to make the change at the last minute even though all 3 witnesses are here and ready to testify in front of the committee that started half an hour ago. Thank you, mister jordan. Today we are joined on panel one by mister James Monsees, cofounder and chief product officer of juul labs. If you would please rise and raise your right hand i will begin by swearing un. James monsees, do you swear or affirm the testimony you are about to give is the truth, the whole truth and nothing but the truth so help you god . Thank you. Let the 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 and with that, James Monsees, you are recognized for five minutes. There is a lighting system in front of you. Green means youre in good shape. Yellow is different from stoplights. Here you have to speed up, not slow down and read means please stop. James monsees, with that you are recognized for your Opening Statement. Thank you, mister chairman, distinguished members of congress. My name is James Monsees. Adam bowen and i found it juul labs and the chief product officer of the company, i am really quite grateful to address you all. From the moment adam and i began what would lead to the juul system it was clear in our goal to improve the lives of adult smokers. We are proud of the progress we have made towards that goal. We never wanted any nonnicotine users and nobody underage to ever use juul products. If the data clearly shows a significant number of underage americans are doing so there is a serious problem. Our company has no higher priority. To understand, it is helpful to understand how the company came about in the first place. Adam and i smoked, tried to quit and failed. We are on our way to becoming one of the 500,000 americans who die each year from smoking related disease. For us giving up smoking required an alternative which did not exist at the time. We found it juul labs. The product we developed, to do what no Previous Technology has done. Help adult smokers stop smoking multiple cigarettes on a widespread and consistent basis. Recent behavioral studies find more than half of adult smokers who purchase and use juul products which completely from smoking cigarettes within six months, the fact that we could not be more proud of. That study aligns with realworld experience. In 2018, the fastest rate of decline in a decade. Mister chairman, put simply juul labs isnt big tobacco. We are here to illuminate its progress product, the cigarette. Our difference is fundamental. First our product does not involve burning tobacco. 7000 chemicals, at least 200 250 of which are known to be harmful. Juul products contain nicotine which is addictive but is not directly responsible for the many diseases associated with smoking. Public Health Authorities like Public Health england have concluded that vaping is a fraction of the risk of smoking, at least 95 harmful, less harmful and negligible risk to bystanders. Second, companies incentives a totally different from those of Tobacco Companies. Traditional Spirit Companies face a saturated, concentrated Global Market. Juul labs has reached just 0. 3 of the Global Market of 1 billion smokers, 70 of whom want to quit actively. Our incentive is to help them achieve their goal of transitioning from cigarettes. It is an astonishing Business Opportunity no doubt but it is a historic opportunity for Public Health. Underage use of our products does not advance that goal. It imperils it. Unlike cigarette manufacturers, our company swiftly acknowledges and act upon Public Health data. We embrace appropriate regulation and voluntarily acted to restrain our own emphasis to serve Public Health goals. These actions included unilaterally ceasing sales of certain products to retail stores, investing our own funds to drive retailer compliance and raising the legal age to buy our own products. We believe the steps we have already taken became the category wide standard, would go a long way to driving down underage access and usage of vapor products. Mister chairman, we are prepared to do more. We have met with our sharpest critics and have sought their suggestions for how we can improve. We remain open to their input. We are committed to cooperating with this committee, state attorneys general and other officials who wish to examine our practices and we are dedicated to learning from our mistakes and not repeating them. In doing so we hope to earn the trust of this committee, congress, regulators, customers and the american public. We are grateful for the opportunity to discuss these important topics and look forward to answering your questions. Thank you. I would like to enter some exhibits that will be referenced by different members. I would like to enter exhibits one through 30 without objection, so entered. I now recognize myself for 5 minutes of questioning. James monsees, on august 17, 2006, judge Gladys Kessler 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 this case . More or less. Phillip morris owns the marlboro brand, correct . That is correct. Philip morriss Parent Company l3 a owns 30 of juul. That is correct. Yesterday doctor robert jekyll are from Stanford University testified under oath before the subcommittee that you confirmed to him that you reviewed stanfords Online Library of cigarette advertising and found it in sworn testimony, very helpful as you design, you met with doctor jackler didnt you . Yes but i did not make that statement. You are under oath and d9 you made that statement, is that correct . I think he may have misheard my commentary. The resource he compiled is a useful resource when adam and i were at stanford we were interested in understanding more about the bad actions of Tobacco Companies and at that point we were very interested in using his research to understand what bad actions Tobacco Companies have taken to familiarize ourselves with how not to run a business. You deny his statement under oath. I would like to put his assertion in context. Please show advertisement number one. Sir, these images that you see on advertisement one contain a few different images. Right over here is a picture of marlboros trade dress. In the middle is the original juul design that you came up with and the far right is the most recent juul design. Early on in your advertising you entered into a settlement with Phillip Morris and in 2 us it says, quote, due to requirements outlined in the pm i settlement we removed all juul branding that uses triangles and diamond shapes. Pmi is Philip Morris international, right . That is correct. You settle a lawsuit with Phillip Morris where they allege you copied marlboros what they said. How much did you pass part of the settlement . 0. It involved no exchange of money but required that you abandon the triangles and diamonds which are very similar to marlboros trade dress, correct . We never designed the product to look anything like marlboro. You deny they look similar . I do deny that you are comparing, with all due respect, mister chairman your 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. So the board minutes say due to requirements outlined in pmi settlement we removed all juul that uses triangles unite that was what was said in your blue minutes . I do not deny that. We request you provide the subcommittee with the pm i Settlement Agreement within two weeks. Would you do that please . I will have to get back to you on that. I dont see why that would be a problem but i will check with my colleagues. We will subpoena it if that is required. Marlboro is, quote, leading the leading youth initiation cigarette so it says something that juul shows marlboro to emulate. Please go to add 2. Lets look at the highlighted in this head. As you can see on the right, the marlboro products depicted in advertisement. On the left are the juul products. You notice the colors are very similar between the two companies products and one interesting thing i would like to point out is the flavors. Lets talk about the flavors for a second. You have mint, cream, mango and virginia tobacco. Which flavor is juuls topselling product . Currently after we have pulled voluntarily all of our flavored product off of market and they are only available on our website, the topselling product i believe is meant product followed by virginia tobacco. Mint accounts for 74 of your companys sales and mint is a flavor obviously. Mint is a menthol based product intended to appeal to consumers using menthol based cigarettes. It is a menthol based flavor, correct . A menthol based flavor, correct. Can you please put slide 3 or add 3 up. So recently you put you took out a full page ad in the washington post, you said taking flavored product out of stores, that is what you alluded to a moment ago, the problem here that i see is you left what you call the mentorbased flavors in the stores, correct such as mint. That is correct. And so mint is still a flavor that is available overthecounter in the stores and according to the 20162017 population assessment for tobacco health, 96. 1 of 1217yearolds did with the flavored product. Additionally it found 97 of current youth, ecigarette users use of flavored ecigarette in the past month such as mint. Flavors hook kids. And though you say you took all the flavors out of the stores you left the mint flavor. Mister chairman, with all due respect i think that what you will find is this, these were unprecedented actions that we took. We heard these concerns and i agree with you that we should be concerned and ever since we first heard these concerns we look to ourselves without new regulations being imposed upon us we took this action in and of ourselves, the products that we pulled from market, the flavored product we pulled from market represented 50 of our business at the time. I cant imagine a more responsive, proactive steps that we could take to exactly the deck you are making. But when you pull the other flavors off the market mince took their place, mint is a flavor and it took the place of all the other flavors. Do you disagree with that . What has mostly taken the place of pulling this product off of market is illicit illegal products that dont comply. Is mint in your stores . It is. That is all i need to know. It is a flavor, flavored product, still in the stores. With that i will now recognize Ranking Member comer. Great to have you here. Do you feel that juul has ever purposely used deceptive Marketing Tactics to convey that their products are not harmful . Know, never. What was the purpose of creating fruity flavored pods . The purpose of flavor is to create a more efficacious solution, the mission of this company is to eliminate the death and disease, improve the lives of 1 billion adult smokers around the world and we know that 70 of those people want to quit and there were a number of tools that we used as we were designing the juul platform in the first place through need finding and the pathetic research with smokers where we could see opportunities to make a product that could be superior to cigarettes. It would make cigarettes ultimately obsolete. We see in the studies we have run that flavored products overindex in switching efficacy. I said in my Opening Statement that 54 of adult smokers who pick up juul and use juul quit smoking entirely after a 6month period. More importantly that number continues to go up as we look longitudinally. The number is much higher by as much as 30 when those consumers have access to flavored product. That is their intent. He was 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 and costs 300 billion. Are you concerned by the number of teenagers who report vaping or use juul. I cannot be more concerned. Was your product ever intended for underage use . Know. Absolutely not. 100 not. You never intended on that product having the rates of underage uses it apparently has. The long history of tobacco is also the long history of underage use of Tobacco Products. As long as Tobacco Products 7 available underage consumers have had access to those products and used them, oftentimes pretty much for always illegally. I was one of those underage youth. I bought this product illegally and i used them. There hasnt 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 use but it imperils the business if you use these products and what we need to do is work hopefully with this committee, every stack of Research Analysts possible, everyone we can get our hands on to help us create industrywide practices and we are trying to prove what those practices should be, what they can be. It is a priority for juul. There is no higher priority for this company. What steps are you taking to prevent this . As i mentioned earlier, last year in november 2018, going back further than that weve taken escalating steps as we learned about these problems. Most of the criticism we received doesnt come directly to the company, we welcome that and we would love to work more directly with people that have critiques with the company. When we hear the criticism we take it extremely seriously. These escalating steps move through to one that i want to highlight. In november 2018 we pulled 50 of our revenue off of the market proactively. Nothing requires us to do that so we were hearing a lot of critique about flavored product. We left on the market tobaccobased and mentholbased products, the same way cigarettes exist on the market. Have you been working with the fda to institute changes to the Regulatory Environment to prevent youth use of your product . There have been conversations with the fda, provided some guidance on how to run the surveys. When we want to better understand youth usage issue, it is difficult for us to study youth directly. One of the ways in which we had the most valuable positive relationship with the fda was how we can better study youth usage. Our time is expired. You have 5 minutes. I want to set the stage really quick. We have a recent acquisition by al tria that brings you to 35 and double the value of juul and we have seen an uptick in similar tactics used by big Cigarette Companies, Big Tobacco Companies in the years leading to the crisis we face in the last generation of tobacco users. I have an article i would like to enter into the record. Ahead of congressional hearings, 1 million in quarterly lobbying payouts for the first time in the forbes article and just today on my phone i was reading a politico article and an ad popped up from juul talking about combating youth vaping and i dont think a lot of people outside the political sphere read politico. Here we are and i want to talk about influencers that are pushing the product. Social media is clearly the place where young people are getting a lot of their information and so everyone is on the same page, influencers, social media users, a lot online following and establish audience credibly, many have hundreds of thousands of not millions of online followers, many reading clothing brands, food and beverages and so on and contract with no influencers on sites like instagram to sell their products. Are you aware of what and influence the program is and how one might be used to sell the product . I am generally aware of how the program would work. To market products to the smart phones of consumers and inevitably seen by people of all backgrounds. Just out of curiosity do you happen to know off the top of your head how old you need to be to create in its graham account . I dont. You have to be 13. In advance of this hearing we asked juul a letter asking to identify every celebrity influencer and Marketing Agency engaged by juul. Juuls june 21st letter pointed to only four influencers and dont have a traditional celebrity or Influencer Program. I believe it is. What you provide in advance of this hearing, march 2nd, creative groups that juul launched influencer feeding program. It required to curate and identify 280 influencers in new york and la for three months. I dont have a copy of that document. 280 influencers in your response to the subcommittee . We have a document it is what you provided us. I am sorry. Staff work on that. Lets look at exhibit 5. July 27, 2015, to secure social media buzz makers with a minimum of 30,000. And to leverage as loyalists, wasnt the only company hired to engage in. There are others. Maybe i can help a little bit. And early on in pursuit of the mission of this company. 1 billion smokers globally, 70 want to hate. 2530 for the target of the initial campaign. The target of our initial campaign because what we found was it would be more receptive to new Technology Solutions that havent been available before. I want a couple of other things. Exhibit 6 is an email from kate morgan. She references 280, we are doing a target to build 1000 juul influences in email campaign. And identifying 29,000 influencers. Youre doing this to target young people. The marketing update stated, quote, they get juul in the hands of over 12,500 influencers of slowly introducing 1. 5 million people. Lets go back to the june 21st letter to the subcommittee, you do not have a traditional somebody or Influencer Program. And juul Influencer Programs, and we continue through december 5, 2017, and influencing the department roundup, 200 influencers. Do you maintain you didnt have an Influencer Program . To the best of my knowledge we are talking in Influencer Program. You are on the record and you said a moment ago that you did not have a traditional celebrity or Influencer Program. I will let the witness answer but we are running out of time. It sounds like were getting into territory im not completely familiar with. I am more than happy we will ask you to respond in writing as a followup to this and whether you would like to revise a statement that says you did not have a traditional celebrity or Influencer Program and when kids learn about a dangerous project from influencer, it avoids public detection when many of these social media sites used by millions of kids under 18. 20 of High Schoolers before parent heard of juul little on had a chance to step in. Congressman miller for the next questions. Yesterday in a hearing with Public Health efforts, we heard about how important noncombustible ecigarette can be to help adults quit smoking. What is juuls relative success in getting adults to quit . A number of different studies that speak to the category in general, new england journal of medicine, once consumers use ecigarette as Tobacco Control study, 77 correlation, and in 19,000 smokers that is also associated with double the odds. Looking at the category, what you asked in particular is how well juul does. Regarded as the Gold Standard for quitting. Nicotine in a patch or gun form and the efficacy rates just below 10 , juul, now we ran a very large study of juul consumers, exsmokers who picked up juul and looked at their usage on a longitudinal basis. We found 54 , this was not us but Substance Abuse research and thirdparty independent agency running a study we did fund. It was found that after 90 days 54 of those smokers stopped smoking completely through minimum of 30 days. The most interesting part of the study is if you follow further to 180 days that number continues to go up dramatically. It is quite the opposite what happens with traditional nicotine replacement. It is important to keep these products out of the hands of underage use to ensure they were available to adults, quit smoking combustible cigarettes. In a store and online. Is a correct . The kind of juul products are very limited. When an individual buys a product, what steps do they have to go through to ensure they can purchase the product . First of all it is only available on a different website, purchased from a different, from anywhere else online. These sorts of sites pop up constantly. It is a tremendous effort for the company, we take down tens of thousands of these websites do elicit products that do not have good quality standards, breaking the law in a number of ways. We dont just ask you your age, we register you as user of age. What we will do is check your id, your id scan, we will run that and make sure that person exists, what we sometimes still do is look and ask the last four digits of one Social Security number that has to tie back to their license. This is much more sophisticated, two factor identification nearly all circumstances and that user has to enter their name and phone number that is a matchup with their drivers license. They get a text message on their phone. The phone is registered as a credit check when you register that phone to the individual, not just the family that verifies who that person is and what age they are and use Public Record the can to what you check by a house. I think i am out of time. I now recognize congresswoman pressley for 5 minutes of questioning. I want to ask about the fda process for regulating ecigarettes. Under the fda, vaping product on the market prior to august 8, 2016, the date it went into effect could avoid fda regulation. Explain what it means for product to be on the market before that date. You are talking about with selling pot in one single store be sufficient . Would it be sufficient to run a business . I am not sure. I dont want you under the fda rule, vaping product on the market prior to august 8, 2016, the date they went into effect could avoid fda regulations. Can you explain what it means for a product to be on the market before that . What does it mean . My best recollection of the standard, offered for commercial sale is effectively the definition. Did you rush any products onto the market before the august 8th grandfather date in order to beat that Effective Date . We did. That is a fair way of putting it. Effectively every product in the category that the deadline did, none of those products. Reclaiming my time. Screens arent working. I can recite well here. February 2, 2016, internal email 6 months before this grandfather date from sarah richardson, including juuls executive director of brandnew product marketing, mobile customer implementation, the email, it says, quote, regarding juuls limited you messaging, various nicotine levels and flavors, guidelines. We dont want to frame these launches as being a shortterm sku, limited launch or limited location is preferable. We also dont want to imply timing for expanded availability to protect ourselves. By the end of this year. Juul did try to introduce unlimited run to be the grandfather date. I already admitted to that. Very bad but thank you for honoring it. Why was it important that you, quote, not frame these launches as being a test or a shortterm sku . I will give you one specific example. When we were first launching juul we were a small company, very limited resources. A number of different when we were faced with this grandfather date that was coming quickly, we did do a lot of work to develop those products and push them out. We sold those products to consumers. This is in general what the whole industry was doing to try to preserve optimality given the situation. A couple more things. What was disturbing about this and problematic as it seems you were looking to circumvent fda regulation and that was troublesome. And did not, and by the end of this year. And how much did you launch after this email and available today. I dont know exactly. And and the rule went into place. Three jewel starter kits, 11 device, and 29 partner labors with 7 major brands. And 2 or 3 additional nicotine strength and 27 bottled juice flavors in three nicotine strains. It is a major push. Absolutely do you believe that is grandfathered and shielded from fda regulations . A limited set is a your believe this is grandfathered in from the fda regulation and rest these products. Every product on market now is in no way rushed. It was legitimately on the market for some period of time. Now introduction with new flavors whatsoever until after p. M. Pa takes place. Time is expired. I now recognize the gentleman from North Carolina, mister meadows. We have two competing narratives. One is a desire to help people get away from traditional smoking. Is that correct . Absolutely. As a member of Congress Whose father died from lung cancer i am very sensitive to both narratives. One, trying to get people away from carcinogenic Tobacco Products and at the same time the one complaint i get from teachers is all about vaping in schools. Those of the narratives we have. We need your help and it is a priority. What we have to do is really be very strong in making sure it doesnt get in the hands of youth. What outlying the product for anybody under the age of 21 help . That has been quite a crusade for us recently. The past twitter pushing i tell you why that would help. Within high schools our best understanding right now, social sourcing, one student above the legal age. To another student. If we create that distance, that divide to find willingness, and distributing to minors, youth prevention. Anybody that is not 21 years of age or greater. All Tobacco Products, strong supporters of tobacco 21 bill. We have seen tremendous progress. By the end of next year, over half of all people in this country will be covered by tobacco 21. A number of people with long thought ever trying to push tobacco 21, pushing that over the edge. A number of bills floating on the senate side and how side, has one that we supported and is it true that you have given 180,000 pages of documents to this committee for review . That is my belief. 180,000 pages of documents for this committee to review in terms of your intentions and what you did and should have done. I can just tell you i have been on this committee, this is my fourth term in congress and that level of participation is unique. It is greater than most federal agencies in terms of responding. How many of those pages of 180,000 pages of documents have you redacted most of the information on those where there are blank pages . Not as far as im aware. In that spirit of transparency heres what i would ask. Knowing your goal is to help people get off of traditional Tobacco Products in North Carolina i can tell you we know tobacco. Vaping has gotten to be a big problem in high schools. Those other products, it is still prohibit, the chairman was talking about lets be clear, it is menthol and lets also be clear the users of menthol products have a unique demographic and i see menthol being very different from bubblegum or cotton candy. Would you agree . 100 . This is one of the major unfortunate factors as a result of our action pulling flavored products off of the market. That market has been backfilled by a number of thirdparty manufacturers, mainly chinese flybynight companies with little to no manufacturing practice. We have rated a number of these facilities proactively in china and it is startling what you will see this is what is backfilling these products. And now people believe juul sells cotton candy flavored products. Is what i would ask with the chairman of indulgence, three things that would help fiscally, to identify those areas that are counterfeit and praying on the lives of the teenagers whether it be in marketing or importing from china if you will do that. The second is more than just outlying it, three other steps we can do to make sure it doesnt get in the hands of youth and the third thing is how are you willing to partner with congress in terms of legislation to accomplish the first two and i will yield back. Thank you. Without objection, Debbie Wasserman schultz shall be permitted to join the subcommittee and be recognized for questioning the witness and i would like to recognize our chairman is with us as well. So miss wasserman schultz, you have 5 minutes. Appreciate the indulgence of the committee allowing me to participate. James monsees i have met with kids in my district who have become addicted to nicotine through your product. I is the protect act introducing 100 million in annual funding for cdc initiatives to address the Public Health epidemic. I know your company is supportive of the protect act and i appreciate that and i want to take your statement in good faith that you are taking the epidemic of ecigarette use seriously but unfortunately there is so much evidence to the contrary. I hope you will offer me some answers and some clarity. When your product entered the market existing ecigarette contained 1020 mg of nicotine per milliliter of liquid. You used nicotine formulation it removed harshness and bad taste of nicotine and tripled the nicotine content over existing products making juul the most potent ecigarette on the market, the eu and the uk tapped nicotine levels, a third of us products. With that, you do still sell the product in the eu in the uk, correct . Last year israel capped nicotine content, 20 mg ml, telling them a grave danger to Public Health. Juuls 59 mg ml product was on the market. He recall 59 ml product indented that marketing is real with a 20 million per milliliter product, correct . Correct. Juul determined to can make money selling a product less dangerous. Yes or no, do you think a 20 g ml juul, she stated mission of helping adult smokers to quit smoking conventional cigarettes . Let me provide a little context. If you could answer briefly. I understand. The first concentration, the 5 product you are talking about right now was designed to mimic but never exceed the systematic curvature. I want to clear answer of can you achieve your stated mission of helping adult smokers quit smoking conventional cigarettes using 20 g ml product . We would love to try. You are trying in every country except this one. Juul sites uk study to the proposition ecigarette may help people quit smoking but you failed to mention participants in the study were using liquid below the 20 mg ml number. Nowhere near the 59 level in your us product. Late last year it was reported juul began developing a pod that would comply with the 21 g ml but would also increase the voltage and temperatures of the device and deliver more nicotine to the blood. Is that accurate . Im not sure what you are referring to. The delivery device where you increase the folded and temperature of the device instead of having a 59 ml, you would have going down to 20 and you deliver a more potent Delivery System of nicotine into the bloodstream. Is that accurate . Im not sure. Im not aware. If you could answer the question for the record i would appreciate that. It is mindboggling you dont know the answer. Are you aware this even more addictive tightening the risk for young people if that were the case. If we increase the voltage. And the temperature at which the liquid is delivered. Our products are notably temperature controlled for product safety, the only one that closed temperature control. We would never increase the temperature. You are saying it is not accurate. I would like to get more back to the record. Juul is supportive of relations but your actions speak different, it would technically comply with nicotine caps while manipulative nicotine delivery seems to disregard the spirit and intent of the law. You appear to be marketing yourself as a Smoking Cessation device but you are not fda approved of the purpose and efforts to increase nicotine delivery highlight why that is the case. Fda approved Smoking Cessation products including stepping down nicotine intake, does this come with those instructions . It does not and we would never market it is a cessation product. Juul is not a cessation product. You dont want to use your products as a Smoking Cessation tool. You just want people to be addicted to nicotine for their entire life . Absolutely not. 70 of the world 1 billion smokers wants to stop smoking immediately. The first the most important thing they can do to improve their Life Expectancy is move away from cigarettes. That is the state where at right now. You juul does a great job altruist owns 35 of your company . That is true. You consider yourself a part of big tobacco . I, i consider traditional Big Tobacco Company as a major industry in our company. Okay. Actions speak louder than words. Thank you. Appreciate that chairman spindle just. Yield back. I now recognize congressman crossman for five minutes of questioning. Did you just give, follow up unless think it is there any correlation since jewel and similar products came on the market and the rate of cigarette sales . Any oh, sure. Since juul has come on the market cigarette sales have declined quite a bit. In 2010 we saw 5 decline in the tobacco market. So far this year were seeing yearoveryear declines about 8 in the traditional combustible tobacco. How long have you been available over the country, how long . I say we were, we begin to be widely distributed sometime in 2016. In general when i think of ecigarettes i think people who want to stop smoking. Do people buy your product for that reason . Yes dick its nearly everyone uses a product as an alternative to traditional Tobacco Products. There have been a lot of things on the market my whole life, nicotine gum. Have there been any studies to see the success i know somebody couldnt one of these type products, if i was able to quit smoking. Have there been any studies done comparing how effective you are with your product compared to these other things . Absolutely. So not, not necessarily direct studies but studies looking at one versus the other. But the efficacy rates of nicotine cessation therapies, which are i believe speaking to, a wellknown. There are studies of ecigarettes in the new england journal of medicine regarding Tobacco Control and addiction, all very well wellrespected ay well run studies. But generally, in general, show for the category about a two times, about a 2x improvement in cessation or the ability for consumer to stop smoking completely. Now, then they continue using ecigarettes afterwards but they stop using cigarettes. In fact, one of these, actually one of the studies looks more specifically at does anyone continue to use these products. All of these studies i just mentioned are great but they dont study juul. So the studies that we have commissioned via a Third Party Research laboratory looked at about 18,000, i believe believe it was about 18,000 juul customers on a longitudinal basis. So smokers who picked up juul. 54 of those smokers quit smoking completely within the first 90 days, and to mean complete switching, switching completely. They had to have abstained totally from using a combustible sigrid for over 30 days at that point. And if you follow out the data on even longerterm basis, those neighbors continue to go up. You asking about these traditional cessation products. The interesting thing is that while the efficacy rates for those products look meaningful, not nearly as promising as 54 , around 10 that something. The longterm efficacy for 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. Okay. And i take it, you know, any health downsides, i know a guy who quit smoking. He had nicotine gum for 25 years. Your product is widely more healthy than ecigarettes . Yes. Theres a a number of speakers argued another question. 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 sigrid smokers go down, do you know how many lives have been saved so far by people using juul compared to these other things . You know, its tough to say because it would completely depend on them staying off of cigarettes. Just an estimate. Why dont you, i would think youd be something you be happy to brag about. Why does your people go back and put pencil to paper, you know, or cinch of people quitting with the come versus people quitting with juul and make a stab at how many Elijah Cummings said so far. The happy to do that. Ms. Tlaib, five minutes of question. Mr. Monsees, just want to ask you a yes or no question but when you said i dont know and you actually know, its actually line, too, i just want you to know. If you say you dont know something that you actually do, its the same thing as a lie. I just want you to know that. So mr. Monsees, when extent of your epidemic became clear in federal Health Agencies pointed to juul as the source of the problem, your actions do not seem to grasp the urgency of this problem. Instead you simply transitioned to marketing juul as a healthy alternative to cigarettes for smokers to quote switch to. If we can put up, right behind me you see it says smoking, yes or no, smoking means cigarett, greg . Correct. And switch means juul, correct . Correct. After 30 lines starting with quick, the ad says switch followed by know for the mention of start smoking again. You were a smoker. Does this add give a smoker hope that that might be a way to quit cigarettes for good . I think the intention of this ad is to make it very clear that consumers, that theres alternative finally to combustible cigarettes. I am one of those people. D agreed it conveys your product can help smokers quit smoking cigarettes . I think what the ad is trying what we tried to convey with this ad to the best of my knowledge at least is this is the pattern speedy you are trying to get away around fda regulations, mr. Monsees, but the fda regulates Smoking Cessation devices, the things that help people quit smoking but juul has avoided calling itself a cessation device which juul please helps it avoid this particular fda regulation. Mr. Monsees, i imagine you chose your words very carefully in these ads. Yes or no, did your lawyer tell you that this ad was not claimed claiming to be a therapeutic sensation device . We do not your lawyers, did your lawyers say that this does not convey that . Im giving you an even broader answer here. We do not claim for juul to be a cessation product. Let me tell you exactly why. The history of cessation products have extremely low efficacy. Thats the problem were trying to solve. If we can give consumers an alternative and marketed right next to other cigarettes, then we can actually make something work did your lawyers tell you that the words switch and switching were not there. Sensation claims cessation claims . I dont recall exactly. Are you allowed to say her products are healthier than cigarettes . I believe in these chambers we are about to do so. You must feel really constrained right now. Maam speedy if you see her products help people quit cigarettes, the ft would regulate you. If you say their products are safer, the fda would regulate you. You create an Enterprise Market skin of the leased 20 people to pitch juul to companies to help the employee stop smoking. Supposedly lower their healthcare costs. Hired douglas roberts, a a forr Healthcare Executive to run that team. Why would employers or injures partner with juul unless you contain juul is effective for Smoking Cessation or safer than cigarettes . I think the real opportunity here is to improve the lives of the millions people worldwide and Work Together speedy what about supposed Health Benefits of juul . Look, i just explained that. Theres an opportunity here for Public Health. Why would Insurance Companies not want to explore all options to say peoples lives . If you make the direct statement to the u. S. Government that your product for Smoking Cessation device or what you been telling these other folks from healthier than cigarettes you expect to be regulated then, wouldnt you . I cant state a state and me emphatically. Juul is specifically, and on purpose, not a cessation product. On june 14, juul sends a letter to his trade about trumps tariffs on lithium batteries which are use on your product, quote, opposing a 25 duty on juuls portal charging case will indirectly increase the cost of healthcare. Leveling an additional duty would cause undue want to American Consumers who are hoping to improve their life by reducing or eliminating the use of Tobacco Products. Making juuls product cost prohibitive may in turn lead them to revert to the use of Tobacco Products, which may increase the cost of healthcare to consumers as well as u. S. Health insurers. How are those not directly into your product is a Smoking Cessation device and healthier than cigarettes, mr. Monsees . Im sorry, ive never seen that document before. Of course not. Mr. Chairman, if i may. Lets just be clear. One model found every one adult that successfully switched, switched cigarettes to ecigarettes eventually to eventually nonuse of any nicotine product, 81 out of like my somehow become young adults, that try ecigarettes when eventually become daily smokers by the age of 40. Thank you so much, mr. Chairman for doing this you and for your leadership on this issue. Thank you, congresswoman. I never recognize mr. Jordan for five minutes of questioning. Thank you, mr. Chairman. Mr. Monsees, youve got a product consumers like, dont you . Certainly, yes. You and your finest in the story right, you and your friend or young people sit around, and you said were going to develop a product. We like to try to develop a product that is much less harmful than traditional cigarettes, can actually be a way to get people away from smoking traditional cigarettes. And you actually did that, right . Thats correct. You develop the product and when you develop the product and started marking that product, did you follow the law . We did absolutely. You never broken laws when you had i think someone said 70 growth in market share over the last couple of years, is that right . That sounds about right. You had this amazing product that you develop, you had this tremendous market share growth and youve followed the law through the entire time you had that growth, is that right . I believe so, yes. Followed the law, developed a product the people, a product will take his wife are more harmful traditional secrets, product that can help you using nicotine altogether and somehow you are a terrible guy. This is this is a very complx company, no doubt about it. And in large part, look, empathetically i want to express this. I dont mind, i mean, this is my favorite thing to be here today, but i dont mind. I didnt mind because its extremely important and a very much understand the skepticism. This is an industry that has done wrong for truly an long period of time. And we are changing that from the inside out with products that are delivered from innovative people from 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. We do not, and i think this was stated, by the chairman extremely at the beginning, we dont want any under age consumers using this product. We need to Work Together to make sure that no under age a consur uses this product. It is terrible for our business but it is terrible for Public Health. It is terrible for a reputation. None of this is good stuff. We want to get on to the business of a limited cigarettes and saving lives. Even though you follow the law never some things that took place in the time when you had this amazing growth in the market share that you are now changing, is a right course you are no longer marketing on media platforms . Thats correct. You are replacing placing limits on the quantity and type the things that can be sold at retail outlets, is that right . Thats correct. Even though you follow the law, you have to make this changes. You said for reputational concerns you as the company had made a decision to do those two things. Not just for that reason alone but let me build on that of the lipid. Young people, right . The safety of young people. As an example, ice dated this earlier and upstate it again. The actions, were trying to lead by example, trying to show were willing to take into an action is needed to protect young people from access to these products. If those standards were adopted on an industrywide basis, if it was required on industrywide basis, we could stop these counterfeit products are entering the market, if other companies that were not willing to do these things on a proactive basis, we are held accountable to the same standards. Then we believe we would be looking at substantially lower usage numbers. How many people work for juul . About 3000. 3000 jobs you provide. You develop a product as a way to have an alternative to more harmful traditional cigarettes, as would help people move off of traditional cigarettes and hopefully stop smoking altogether. Amazing product that now has got 70 , 76 growth in growth in market share. You employ 3000 people. You make some decisions early on that you decide to change just to make sure young people like we have in the audience dont get access your product, like stopping marketing on social media platforms and limiting the quantity that we sold at retail outlets. You publicly come out and said you dont think anyone should be using in Tobacco Products including your own until they are 21, and yet you get brought in from cogs you get yelled at by democrats. We, look, i think its just an incredibly important mission. And yes, we have 3000 people now. Ive never met anyone more Mission Oriented group of folks from the people that come here. Because we know theres a lot of stigma historically in this industry, and we know it is easy to assume that we are tobacco 2. 0. Were quite the opposite. I yield back. Thank you mr. Jordan. I now recognize chairman cummings. Thank you for being with us, for five minutes of questioning. Thank you very much. Mr. Monsees, has a juul made a statement that quote we are as committed as ever to combating youth usage but dont take our word for it. Look at our actions, end of quote. We are looking at your actions and they are deeply troubling. In 2017 the city of San Francisco band flavored Tobacco Products. Then Big Tobacco Company r. J. Reynolds try to reverse that with a ballot measure. The voters rejected big tobacco and upheld the flavor van by a whopping 68 . Last month San Francisco banned the sale of ecigarettes, just like your fellow Big Tobacco Company, juul is trying to overturn it with a ballot measure. But your ballot measure is even bolder than r. J. Reynolds. Beyond overturning the ecigarette van, is it true that it would also repeal the flavor ban 60 of san franciscans already approved . Im sorry, chairman. If theres a provision in that, maybe im an fully with his but are theres a provision in that come in that legislation that would repeal labor ban on cigarettes and combustible cigarettes . Yes. Im not aware that there i personally would not support that. Kids are essentially, especially attracted to flavored Tobacco Products, and you know that, right . Are you weve taken direct action against that. Let me ask you one sentence. Young people are attracted to flavored Tobacco Products, yes or no . We certainly heard that concern and weve taken action against the National Institute of drug abuse and 66 , and this is very interesting, 56 of teenager ecigarette users believe the product only contains flavoring. They do not realize there is nicotine. So you fight cities the fine flavors today and for kids. Do you agree . Unfortunately, that was quite a flawed study. I agree with you, right, that is under age consumers are being attracted to flavored products and getting access to it, then we need to do something about it those of the actions we wanted to alert you when we pulled those flavors proactively off of the market. What your ballot measure goes even further. It would preempt local Public Health laws effectively borrowing local bodies from protecting their communities. You believe juul knows what is best for local communities better than the communities themselves . Congressman, im not merely familiar enough with the details of that law to, on it, but i can tell you youve piqued my interest and im certainly going to investigate this with liking afterwards. How long have you been in your position . The company in some form or another, started out of graduate school back in 2007, so for a long time. Thousands of retailers have been caught selling your products to children. Your ballot measure also seeks to insulate those paddlers from liability by raising the standard to quote, knowingly, and of quote, selling to minors. If you want to keep their products away from kids, you would support holding that businesses accountable for illegal sales, not adding loopholes. How does making it harder to hold retailers accountable for selling your product to children help keep your products out of childrens hands . Again, mr. Cummings, im sorry, congressman, i cant really, i dont know the details of that. You have very much piqued my interest i hear your concerns and i thank you very much for asking these questions in a a y that we can go investigate and take some proactive steps to get back to you. What i will do is i will prepare a series of questions for you, and i would like to have the answers and then im going to encourage the chairman to perhaps bring you back so you can answer all the questions. Because i think this is a very urgent issue. Thank you, mr. Chairman. Thank you, chairman cummings, for being with us. I now recognize Ranking Member cloud for five minutes of questioning. Mr. Cloud. Thank you, mr. Chairman. Thanks for being here. What is your current role at juul . Its chief product officer. What was back in 2015 . The first half of 2015 i was still the ceo of what was called before the juul it gets a little confusing. I step down as ceo in ugly september of 2015. Who handles the marketing decisions in your company . Who does now . Yes. We have a chief market, marketing officer now name craig brawlers. In 2015 . In 2015 we had a different cmo. Funny enough your talk about these two located cmo. We had a ball cap or we just had no cmo and effectively no Marketing Department but those were the two cmos weve ever had. Can you touch on how your Management Structure has changed, how youve grown a lot since 2015 to current . Can you speak to that . The company has grown dramatically since then. So lets see, when we first launched juul speed quickly. I will have to estimate. I think we probably had about 17 people in the company in all back then. From 17 seventy, i think. In and the Management Team wt event about how many . Five, four. Now . The Management Team is ugly 28 people right now. Okay. Who has the final say i guess on what the company is doing now, operationally related to marketing . Its a combination between kevin burns our ceo and our board, which i am a member. My disdain is the ceo offered and asked to testify before this committee, is that your understanding . Yes. Was he denied . Why is he not here today . Im not exactly sure why he was denied, nor, we were told that ashley and i were also going to testify together. A lot of things have changed that im not familiar with. Would be helpful to have them here to question . Well, kevin, kevin is amazing at keeping his pulse on a lot of things at one time. I think kevin could have certainly helped answer some of these questions more definitively with some more clarity. I would like to switch to flavors for for a moment. Could you talk about whats happened in flavors offered in 2015 versus now . Sure. Initially what were offered in 2015 i guess. Yes, we had flavors on the market in 2015. And what have you done since then . Flavors have increased a little bit. Theres eight flavors now. Its slowly happen a little bit over time. We have introduced 3 strength. You change the names dramatically. Weve also done that. Again, with an excess of caution, every time we hear any concern about what we can do better, we are trying to be as responsive to the as possible. We would love to do that anymore open dialogue sort of setting. I ive seen the original flar names. Wasnt all that familiar with the product before this, but i could understand the concern. Could you explain a little bit of the thinking that went into the original marketing ideas . Sure. What we thought first of all when we were launching juul was theres a market for ecigarettes already and, in fact, within the market 16 of underage consumers were already using ecigarette products. Unfortunately the same ecigarette products were not resident with adult consumers. 60 of all adult smokers before we even launched juul had tried ecigarettes, but only a few percent actually repeat purchased those products. What we saw was an industry that was sailing, and failing at a promise that it could hold to actually dramatically improve lives. You can finish explain this if you are as well. Could you also speak what you think al trias has invested heavily in your company . Alternative has invested heavily in our company because we represent something of an inevitability. I hope obviously were facing a lot of pressure and scrutiny here, but the hope is that we can in collaboration with altria decelerate the altright the visit that physical people anymore. Thats a sustainable business. Thank you mr. Cloud. Mr. Desaulnier has, your record testify this. Thank you, mr. Chairman. Its come to the committees the tension that juul falsely claimed a a partner with stanfd university to great vaping prevention curriculum. In reality he took a stanford researchers work without their permission and charged it to change it to suit your needs. Mr. Monsees, isnt true stanford issued juul a ceaseanddesist letter demanding that you stop using the misappropriated content . Im sorry but im not, im not aware of anything along those lines. Exhibit 30 in your book is a timeline in which the author of that Research Details her correspondence demanding that juul stop working, stop using her work. She says, and she said publicly stated, that your curriculum, quote, this is from stanford, her quote is this not be standards to be an evidencebased curriculum to fully educate youth and prevent their use of the juul. She also says the assessment of juuls curriculum shows the company with intentions to mislead and misrepresent its dangerous dangerous to use. She believes your behavior is typical of big tobacco and comes from big tobaccos playbook. Mr. Monsees, id like to turn something different. Juul claims one juul pod delivers about an equivalent amount of nicotine as one pack of cigarettes, is that correct . Thats the Reference Point that we refer to, yes. So thats great. A single juul pod is several dollars cheaper than a pack of cigarettes, correct . Depending state to state but it can be, yes. On average it is, correct . That sounds about right. Is a true a reach of makes a high margin selling juul than you do selling cigarettes . I i dont know if i can answr definitively. We will be happy to help you. Exhibit 27 is a juul retailer education for highlighting that retailer make a 36 profit margin selling juul. Your documents show why. Exhibit 28 shows that a cigarette manufacturer pays 3. 57 and average in the United States in taxes on each pack of cigarettes compared to juuls seven cents cents. Seemed like a very nice competitive advantage. That has a lead juul to sell its products cheaper than cigarettes and give retailers the higher Profit Margins for selling them. So my question to you, retailers have more incentive to sell your product because they make a lot more money selling your product than cigarettes. Given how many retailers have soldier products to children, do you believe that incentive has contributed to selling to minors . Hopefully not, no. You went to stanford. Its not a difficult question. You have made more money so the retailers are not motivated to sell to children . They make more money. Im sorry, would you like me to answer . Okay. The incentive structure is to ecigarette, cry, for adult smokers. To throw, im not sure i i understand where the retailers are making more money irrespective of who theyre selling it to. You have been marketing to younger people, there go, you make more money. So weve been marketing, the intent certainly come and look, i believe come i dont want to sound, come across as defensie here. We have certainly made missteps to i understand the criticism of some of our past action that we have moved on very quickly. Our earliest Marketing Efforts were targeted to 2534yearold adult smokers. We never what any of our retail to sell to underage consumers. If youre asking whether speech im sorry, ive got a limited amount of time and of trying to control my anger to be perfectly honest. Tax treatment aside would you consider raising your prices so it was more equivalent to cigarettes . We heard senator durbin talk yesterday about how cost is affected, where young people by cigarettes or not. If you raise your prices, it would lower the sales to young people. You say you want to lower the sale to young people. An interesting question and one that i think deserves debate absolutely. We are focused on a number of different efforts that we believe to be potentially more efficacious than that particular one you are mentioning. Its not off the table though. The challenge is it is in large part that differential pricing that also makes the product appealing to smokers who would otherwise, who otherwise have 50 chance of dying if they dont move off of cigarettes. Lets look at exhibit 29. 29. Longterm pricing, im quoting, this is to investors on, in june investors, use of longterm pricing is two times plus potential to bring juuls reachl priced in line with premium cigarettes and reclaim excess margins. In that same investor page you said your product is quote insulated from pricing shocks by demand profile. I just, i want to tell you, ive been involved with Public Health for a long time in the bay area. You, sir, are an example to me of the worst of the bay area. You ask permission. You dont ask for permission to ask for forgiveness. Youre nothing but a marketer of a poison and your target has been young people. I yield back. Okay. That will conclude this first panel with mr. Monsees. We will take a very short twominute break to bring the next analysts. If the audience would remain seated, we will then expeditiously begin the second panel. Thank you, mr. Monsees,. [inaudible conversations] [inaudible conversations] thank you, everybody. We are going to commence the second panel with our two panelist, matthew myers, president of campaign for tobaccofree kids, and ashley gould, the chief administered officer of juul lapse. Thank you both for coming. If you would please rise, and if you would both please raise your right hand i will begin by swearing you in. [witnesses were sworn in] thank you. Let the record show that the witnesses both answered in the affirmative. Thank you and please receded. I informed that votes are about to be called on the main house floor. We will try to complete our Opening Statements, and then we would go as long as we can into the votes are called and then we will return and resume. Without objection, both mr. Myers and ms. Gould statements will be made part of the record. With that, mr. Myers, you are recognized it but before i begin i just want to tell you about the lighting system. I mentioned this before but theres a lighting system in front of you. The green light means go. The yellow light means speed up, and the red light means stop. So with that, mr. Myers, you are now recognize for five minutes. [inaudible] you have to press the red button to talk. Thank you, mr. Chairman, mr. Cloud, members of the committee. My name is matthew myers. In the president of the campaign for tobacco free kids. Its an honor and a pleasure to be here and want to thank you because this is a fundamentally important issue. As weve heard repeatedly, use ecigarette use is that an academic proportions. Before i go through what i like to do is correct a few things that occurred yesterday that i think are really quite important. First is to have data that shows an increase like what someone becomes a smoker. The answer to that is quite definitely yes, we do get. The data shows its roughly three times, four four times me likely. The second question i was in debate about is are we just giving kids who would otherwise have smoked to use cigarettes . Here we now have a growing body of consistent evidence and that is the kids were using ecigarettes are not the kids who what a smoked. Its a whole different population. Its one of the reason we are really concerned because whats happened is its not that ecigarettes are replacing cigarettes. Ecigarettes are drawing a a we new body of kids in. Usada from the examples yesterday which are typical. 42 of kids who use ecigarettes use no other product and never have. Third, our kids just experiment are the becoming addicted . The data since the introduction of juul shows a dramatic rise in number of kids who move from experimentation to very frequent use. The kind of use that is representative of addiction. In fact, the percentage that kid to go from being passed thirtyday users the frequent users is higher today for ecigarettes that it is for cigarettes. We have a problem. Thats not the issue we should be debating. Second, let me talk about what you just heard. You just heard that they were shocked that young people were using ecigarettes and they do nothing to prompt that. The trouble is when you actually look at how this product was marketed, to whom it was marketed, the tools they used, they are inconsistent with much of what you just heard. This product is a sleek sweet flavored high nicotine product delivering nicotine more powerful to our youth that any product than weve seen in the past. Juul responded but the sad truth is when you look at the dates and the numbers they all responded when they got caught. And the measures they have taken to date track the kind of measures weve seen from the tobacco industry. Loud this was a mistake and we never intended it. Proposing haply measures that dont go to the heart of the issue, and, frankly, spending more money on lawyers and lobbyists than they spend on doing the kind of science that would allow us to answer the questions that are legitimately being asked here today. First, let me talk about juuls marketing. Juul claims from day one that its only target was adults. You saw examples of those yesterday, and we can show them to you. They sponsored rock concerts. They use images that are exactly the kind of images that appeal to youth. My first three job industry was conducting investigation of the cigarette industry marketing for the federal trade commission. I could take that report from 40 years ago, light it sidebyside with this and you will have the same exact example. Then we were told that they switched after six months. What weve seen is if you compare the marketing is after six months, to the kind of marketing that marlborough, newport and other Cigarette Companies did to appeal to youth for 25 years in this country, its an exact duplicate about that. So its one thing to come before you and say we are keeping about this issue. But when you look at the marketing and when you look at how long the marketing was going, rather is one difference. Juul had a different tool than the old Cigarette Companies had, and that is social media. And they used it brilliantly. They used it with images that are exactly the kind of images that we know from study after study after study appeal directly to kids. Heres a a couple of the kind f influence or images that we saw in 2018. Not 2015. I could show you multiples of these sort of things. The difficulty is, is that the nicesounding words and the pleas of sincerity that we just heard are inconsistent with the kind of marketing that we have seen before. The second issue to talk about, design and flavors. You just heard that juul pushed out new flavors in new products and order to beat the fda regulation headline. What we look for is to see was in a study of those products, those flavors to see if they would discourage tobacco use among kids . The answer was no, none. Is it shocking . No. We and they both knew for decades that that was the case. I think the key here is pleas of innocence, and consistent with the actual facts of what happened need to be examined. This not an issue of kids versus adults. This is issue of Holding Companies responsible. Thats what fda has regulations and thats why they should be forced to comply with them. Thank you. Thank you, mr. Meister is gold, your recognize for five minutes. Mr. Chairman, Ranking Member, members of congress, my name is Ashley Cooper i joined juul babson january 2017 and serve as chief administrative officer. I joined juul labs because i believe nationally in its mission, helping adults switch away from combustible cigarettes. I am also a mother, and my parents across the country i am deeply concerned about underage vaping. I do not want my son to ever touch juul products or any vapor or Tobacco Products. I have told him that directly and many times. I kids in our community are vaping. Its a serious problem that demands a strong response. My responsibility to them as a juul employee and also as a mother is to do all i can to make sure our company is doing the right thing. That means deploying our resources to combat underage vaping and conducting our business responsibly. Mr. Chairman, over the past several years our company has taken a series of the ball into action, aimed at combating the youth vaping problem. In august 2017 we banned online sales to anyone under the age of 21. In april 2018 we announced our support of tobacco 21 legislation. At that time we had already started working with social media platforms to delete inappropriate posts and listings featuring our products. In november 2018 we announced our plan to step up our efforts to advocate. Stop selling nontobacco and nonmental base flavor juul pots to traditional retail stores, enhanced our websites industryleading thirdparty age verification process, strengthened our retailer compliance program, shut down our u. S. Based book and Instagram Account and committed to developing technologybased solutions. These actions will take time to have an impact but they are steps in the right direction. We are also pleased to note in the last six months alone a dozen states have passed t21 laws. As a result more than half of the American Population reside in states that have taken the step. And more must be done. As juul labs works to remove our nontobacco nonmentholbased products from retail shelves, other companies stepped in offering kid a peeling flavors. We never have at juul. Many of them illegally designed to be used in juul devices. We are working to stem the flow of these illegal products and hope the fda and others will join us in that effort. In a similar spirit we continue to advocate for category wide action. Today juul labs is acting unilaterally. But to reduce youth access to ecigarettes, the same restrictions must be applied and enforced on all those who manufacture and sell the products. We are committed to being part of the solution. We are prepared to work with our regulators, congress, state and local governments and law enforcement. We also know that parents, educators and Community Leaders will play a crucial role. Mr. Chairman, as this committee is well aware, smoking is by far the leading cause of preventable death in the United States and worldwide. More than 34 million Americans Still smoke, and if they persist in doing so, it will kill about half of them. Juul products have the potential to help millions of them switch and stop smoking entirely. Those who believe we must choose between that goal and preventing youth from vaping are accepting the false choice. We can and must do both. That is what the thousands of employees at juul labs are working tirelessly to achieve. We are dedicated to helping the world smokers switch to an alternative that will improve their lives and at the same time combating underage vaping. Well continue to do so and are grateful for the opportunity to be a today to discuss these important topics and to answer your questions. Thank thank you, mr. Martin s goal. I will now begin recognize myself for five minutes of questioning. First of all, mr. Myers, deeply nicotine causes disease . I think that we know that nicotine is harmful to the adolescent or its harmful to the developing brain. Nicotine delivered to a young person particularly at high levels increases the likelihood of addiction and we know that addiction as a young person is far more likely to make it hard for anybody to stop later on in life. Theres also much that we dont know because we never let me stop you. You acted my question. Ms. Gould, nicotine, is it harmful to you, to a user . Nicotine is an addictive substance in that in the fdas own words nicotine does not directly cause the estimated 480,000 deaths each year from smokingrelated disease. And our product was designed to give speedy so nicotine does not harmful, is that what you think . I didnt say that. Is it harmful, yes or no . I said what fda i know what fda says. Im asking you get deeply is harmful . I think fda is a better source for that answer. Okay. Mr. Myers, are you aware of a Clinical Trial that proves juuls number one claim that juul devices help adult smokers quit cigarettes . Unfortunately, we do not have a Clinical Trial that accomplishes that goal. Okay, thank you. Ms. Gold, why has juul never conducted a Clinical Trial to prove the number one claim that it makes, that its devices up adult smokers quit cigarettes . Juul is undertaken a number of studies and will continue to do that. We have, there are a number of studies that have been conducted, randomized controlled trials, there was a study of this year in the new england journal not with the juul that using ecigarettes compared to nicotine replacement therapy speedy but why has juul never conducted a Clinical Trial to prove your number one claim that juul devices help adult smokers quit cigarettes . Juul says that our product is intended to help smokers stop smoking combustible cigarettes, and we have conducted have you applied to the fda for juul to be considered a Smoking Cessation device . No. By prescription . Know we have not. So juul has not done that. Now i want to go to another topic which is this, and its clear that juul has not conducted a a Clinical Trial to prove its number one claim. Yesterday we heard from to my kids, philip and caleb what we were right there in the front row, two high School Students from new york city. Juul went into their school and presented a seminar and called juul quoteunquote totally safe multiple times. How that could happen is much clearer when you consider how the juul curriculum came to be. That program was based on stanfords claimed youth vaping curriculum, correct . Thats not my [inaudible] it has nothing to do with stanfords youth vaping prevention curriculum . So when we started to see the reports of youth using juul products in 2017, we engage with educational experts including several retired superintendents and principals, and they advised us and helped us too great a curriculum and advisory at schools. We take the criticism that that was not well received and speedy let me just interrupt, sorry, im losing my time. Stanford sent juul a ceaseanddesist letter demanding that juul stop using their acclaimed youth vaping prevention curriculum because it was misappropriating it. Juul had taken the materials without consent, removed key portions including the role of industry and marketing and promoting nicotine use and misrepresented an affiliation with stanford. Juuls key deletions downplayed the Health Effects of juul and that context helps explain the presentation philip and caleb hurt. Now, we have received evidence from juul that it is now, its at a School Program where it actually pays schools 10,000 or more to implement juul curriculum. Is that correct . That is not currently the case. We into that program in the fall of 2018. 2018. And as i was saying before we have hired educational experts to help us come up with a program that we felt would be helpful to stop kids using juul. We then received feedback that that was not wellreceived. And in addition, received input from a Public Health expert telling us what Tobacco Companies had previous he done which we were not aware of. And as a result of all of that information, we stopped that program. But, ms. Gould, you dont deny that juul had paid schools such as a school in arizona 10,000 to conduct those programs in those schools, correct . My understanding is that there were six schools that received funding from juul to implement programming to prevent teen vaping. We changed the agreements to make sure that they would not be using juul curriculum. I would have to check which schools actually use that curriculum. We would ask that you come back to us with that information. Finally, we have an april 16, 2018, email about setting up a booth at a School Health fair. Julie henderson was the head of juul youth outreach. Later on she said she expressed concern about the optics of us, meaning juul, attending a Student Health fair, given are now new understand of how much effort seem to duplicate those of a tobacco. On may 18, 2018, we then see an email from you, thats exhibit 17, in which you say here is the paper that ended the think dont Smoke Campaign undertaken by Philip Morris, and attaching an article. Top officials appeared to be aware that you folks are employing programs that are almost identical to what Philip Morris and other Tobacco Companies used in Court Unquote youth prevention programs in schools. Do you deny that you equipment this email in may 2018 . As i was just stating, it was a Public Health official who share this article with me which i been shared internally to say we need to understand what came before us, and that is why we ended the program. I now recognize Ranking Member cloud for five minutes of questioning. Well try to get your questions in. How much time do we have the foreboding . Why dont we continue. Okay, mr. Cloud, five minutes. Thank you, chairman. Thank you for being here. When juul began Marketing Campaign and the 2015 shortly after it was founded, it did depict as a been much talk about rather young looking models in social situations at bars and such. Could you explain the thinking behind it . I wasnt at the company at the time but my understanding from discussions and documents that icing is that that Marketing Campaign was targeting adults aged 2534, adult 34, adult smokers aged 2534. Now, we have taken and heard the criticism of the campaign, and it was, it was cut short as result of that. Okay. Mr. Monsees has acknowledged missteps. Would you acknowledge that as well . Absolutely. We are a company that is still young and growing quickly, and, and we try to learn quickly and change things as quickly as we can. What are you doing to help solve the epidemic of it reaching teens as as a company . Weve taken a number of escalating steps. We as i noted went to 21 on a website in 2017. We have supported t21 in november of 2010 wii remote all nontobacco and nonmenthol flavor from retail. And now adult smokers only have access to the remaining flavors on our robust age verification system, which we think is an important step in the balancing act. We have undertaken a secret Shopper Program which we started in 2017 and expanded in 2018, and have escalating steps for retailers who are noncompliant. We are also working on Technology Based solutions and really think that category wide action is going to be critically important to continuing to make progress in keeping youth away from vaping products. But which is a is the Companies Investment . Have you all calculated that . I dont think theres a particular i would say we really, really headed the company to be incredibly focus on youth prevention. We are spending an enormous amount of internal resources on research and develop and for technologies that can be useful. And at the time we removed the nontobacco and nonmenthol flavors from retail, that represented over 50 of our revenue at the time, so our focus is on making concrete steps forward to make progress against youth access. Now you mention these School Programs. I can tell it as a parent, i have three in school. I would be concerned find out they went to an education similar sponsored by any company frankly. Youve acknowledged that even as a misstep and it has been corrected. Is there anything that juul is doing to make investments in education, in educating teens that doesnt have the juul brand attached to it . So just wanted to acknowledge that there are to my knowledge only two event at schools where we presented, and we stopped that programming. So this is a very difficult topic because we feel like education is incredibly important and get we have received the feedback that we are not the ones, not appropriate for us to be doing that. And even some feedback that may not be appropriate for us to be funding directed educational programming. So this is an area where also i think mr. Myers could be quite helpful. Hes done a lot in the past in education, as have others in the public and industry and we would love to be part of that. Hanky. Thats a great segue. My next question was going to be for mr. Myers. 50 of kids use mental in addition while the announcement, jewel branded mingo and other flavors continue to be involved. I visited the store a block from where my kids went to high school a month ago and was able to find them equally at the same time they announced they were not going to sell those because theyre concerned about americas kids they announced they would sell them in canada in a few months after the intricate Canadian Market a few more seconds if you can finish asking. Do we have data, i know their products coming from china and what the current use is of can we help this through a trade policy, the point is we gotta get into the ways of the policy. Great question. Great question because what we should not be doing is debating, we created allegro tory framework. They have the authority to regulate flavors, they have the authority to relay products. Unfortunately juul has resisted that, just a month ago they filed a pleading in court to delay further the time when fda would be able to review these products. If we want nationwide rules that apply to everybody that can get to the problem youre talking about, that do not lead us to debate about kids versus adult, its time for juul to say we will comply we briefly touched on it. Its an agreement for brief program from the Police Activity league and with richman Powell States the programming youth aged 12 to 17 who from ecigarettes and or marijuana. It specifies all youth will participate in the programs beyond. , jewel created the Tobacco Prevention Program that would be presented to these kids cracked . As i noted earlier we worked with experts to create a curriculum that we have sensed ceased using. So the contract shows they paid Richman Powell 89000 in exchange for that they got to provide a curriculum to presented to a potential customers, preteens and teens already using ecigarettes. That is another page out of the big tobacco playbook. So in odd question, juul did not run a summer camp did it . So there were a number i believe, we can follow up with the number, there were a number of grants that were made to several programs that were all focused on youth prevention or wellness. s exhibit 22 is a contract to fund the summer camps of baltimore freedom and democracy charter school. According to the contract it was a five week summer camp on healthy life adventures. Student participants will be recruited from grades three through 12. Did jewell honestly sponsor a summer camp for thirdgraders . I would have to check the contract, but as i stated whatever grants were made were focused on youth prevention efforts. So they cover the cost for quitman and supplies and exhibit 23 shows an invoice for 120,000 to fund the program. Of that they paid 76000 to hire 90 people to run the program. In exchange for that they committed to sharing student data, this is critically disturbing, from surveys, journal and activity logs kept by students in preand post test stores, why did you need that data . Im not aware of the details so id have to get back to you. s a pain to access kids data from as young as eight is alarming to say the least. Can only imagine the possible uses of the data in the hand of the Big Tobacco Company like juul. They also tried to reach young people through space organization. To provide Health Education to 1000 youth and baltimore. Was juul aware big tobacco had funded similar programs in the late 1990s questioning. In may of 2018 we received information from a Public Health expert informing us on what Tobacco Companies had done previously and we stopped those activities. Exhibit 25 is an email from Julie Henderson before the life skills about how big tobacco promoted in the 1990s to deflect attention from its efforts to targeting kids. Has juul ever marketed through programs . We have never marketed to kids. Anything we undertook an educational space was intended to keep youth away from these products. You dont think any of this sounds strange to find a select group of people who are of a pacific demographic that is highly vulnerable to marketing and the type of education that youre providing to user product . You dont think that is strange at all . As i noted before all educational efforts were intended to keep youth from using the product. When we understood what happened before and how its been proceed we stop the programming. One other foldable population, exhibit 26 juul hired the Consultant Group to marketing communitybased groups including veterans organizations, it states in order to market the technology juul must perform Strategic Partnerships and programs with adult for prevention. With the better veterans participating are where theyre using them as a marketing opportunity . I would have to look at the document. I cannot imagine the veterans groups were aware they were being marketed to when youre talking about smoking programs am i right . I would really need to look at the documents. All to you why that bothers me, when were in my past life we work with vulnerable veterans who express ptsd, serious challenges. Many of them throughout the process became addicted to cigarettes. An particularly Vulnerable Group of people who are highly tenanted towards addiction. And for you all to go into those groups where people are seeking treatment can support and use that as a Marketing Tool is incredibly disturbing and i think this is something we have to investigate further. I yield back. They could congresswoman hill. Youre on the clock for five minutes. Thank you mr. Chairman. Mr. Myers, on the last panel we learned about juul substantial influence program, it had an entire influence for the department and reached thousands of influencers. Was the extent of the program previously disclosed by juul . No it was not. Mr. Myers, influences our new tool for tobacco committees like juul, can you explain any problems crated by an influencer driven campaign and how promoting it could have contributed to the youth epidemic. Use of influencers is something that all the Cigarette Companies are doing and juul did as well. And they did it with great effectiveness. Because theres nothing more powerful than having a young person market to a young person, in this case the young people who are doing so were screened for the popularity with young people, their attractiveness and for the size of the following. What that meant was for young people were being misled in the most serious possible way. Did you find any aspect of juul Influencer Program particularly concerning questioning anything specific that was truly concerning . Two things that are concerning, one work we are dealing with a product that is more addictive than any product in decades. What it demonstrated, you can operate under the radar screen for regulars, parents and teachers even know whats going on with regard to that. Third, despite the claims they moved away from that, we work outside the United States as well and we see ongoing effort of juul to hire people for influencers and we see the same marketing and targeting and demo graphic population outside the United States. It calls into question the cut ability when they say that is not what theyre about. We also asked juul about a settlement referenced in jewels documents, its from august 12, 2016. Board Meeting Minutes stating due to requirements outlined in pmi settlement we removed all juul branding that uses triangles and diamond shapes. What does that tell us . Its improbable to look at the early juul product. Whats important to understand the marble chevron is one of the most effective Marketing Tools recruited for young people. And they would have us to believe a datadriven company that is smart and sophisticated as this one just keeps making mistakes, it defies logic. The marble in the company now owns 35 of juul, they own the ecigarette with the thirdlargest market share, after buying the stake in juul, they pulled mark ten off the market, where you commit to giving us the contract within two weeks . I would really have to confer with my team on that,. Was pulling that part of the deal . We have nothing to do that. When did juul first learn that they were considering pulling mark ten off the market . I believe they did when they published the military to update. Juul has 76 of the market, only a handful of competitors even have a 1 share, big tobacco but you out and folded the main competitor with the thirdlargest market share furthering your dominance of this industry. Juul is not just owned by big tobacco, it is big tobacco today isnt it . I do not agree with that at all. We will respectively disagree. Thanks so much i yield the rest my time. Let me ask a couple remaining questions. Mr. Meyer, i wanted to ask you about a statement that mr. Had made bac hadmade back in a prese put on youtube, its not the nicotine hurting you, do you agree with him . Particularly when were talking with adolescents, there is serious reason to be concerned about the nicotine, it may not cause the cancer but it causes highlevel of addiction, it causes problems with developing brain and delivered at the high levels is being delivered longterm we just dont know. Thank you. I would like to thank our witnesses for the testimony today, without objection all numbers will have five legislative days in which to submit additional written questions to the witnesses to the chair which we forwarded to the witnesses for responses. I asked her witnesses to please respond as promptly as youre able. This hearing is adjourned. [inaudible conversations] [inaudible conversations] [inaudible conversations] coming up tonight conversations with bestselling authors, conservative tv and radio host mark even discusses work on freedom of the press, then msnbc the man who sold america. Trump and the unraveling of the market story. And later Pulitzer Prize winning historian Rick Atkinson looks back at the American Revolution in the british are coming. Faster to 8 00 p. M. Eastern on cspan2. Tonight on cspan3 we will take a look back at the 1969 river friar in cleveland. Which practically water environmental movements. We will hear from historian david, coauthor of the book where the river burned. That is that a p. M. Eastern on American History tv on cspan3. Saturday at 8 00 p. M. Eastern on lectures and history, female activists in the 1960s civil rights movement,. While women were instrumental in helping to organize and put the merge together, the event was purely dominated my men. Sunday at 4 30 p. M. Eastern the global significance of the declaration of independence during and after the market revolution. Multiple translations of our declaration also made their way to columbia, venezuela and ecuador over the course of the 50 year period of the 1776. A halfcentury known to scholars of the age of revolutions. At 6 00 p. M. , eyewitness accounts from inside the white house during the apollo 11 lunar landing. We really staked ourselves into the cabinet room throughout the day, you can see the windows were dark so again were into 19, the module landed at 415 in the afternoon and the astronauts did not walk until later. Our nations passed on American History tv, every weekend on cspan3. Sunday night on q a. [shouting] we were taken out of the hall and confronted of a mob of a great people. Political science professor allison stinker talks about being physically attacked in 2017 after an appearance by author childe murray on campus. At the an the end of your din you left that room and what where and what happened . I dont really remember much of it. I cannot tell you what door we went out. But we were taken out of the hall and