SAN FRANCISCO: Juul Labs, the vaping startup, has posted record sales of over $1.1bn and boasts 70% of the American e-cigarette market, but criticism isn’t far away; the response from authorities has been unsure and research findings have presented a complicated picture of the landscape.

According to a Wells Fargo Securities analysis of Nielsen data, Juul’s sales leapt 882% in the 12 months to July, far outstripping e-cigarette category growth of 97%. And with a 70.5% dollar share of the category, Juul is leaving more established players behind; British American Tobacco captures just 10.8%, by comparison.

In July, Juul raised $650m at a $15bn valuation – equal to half the market capitalisation of Imperial Brands – according to a securities filing. Its strength, in part, is the $35 vaporizers that the company launched back in 2015, not only for the price, but for the fact that their products look more like a tech product, than the lightsabre-style machines that are often associated with the category.

Its issue is that the brand has become popular with teenagers, a development that has brought in revenue alongside regulatory scrutiny. In April, the brand pledged $30m for research, education and campaigning initiatives. Speaking at the time, CEO Kevin Burns – previously COO of the yoghurt brand Chobani – said that Juul’s “mission is to eliminate cigarettes and help the more than 1bn smokers worldwide switch to a better alternative.

“At the same time we are committed to deterring young people, as well as adults who do not currently smoke, from using our products.”

Despite the company’s stated efforts to limit its headroom, anti-smoking critics suggest that its momentum in market could reverse the decline in electronic product use. In a 2017 survey by the Centers for Disease Control and Prevention, 13.2% of high school students reported having used an electronic vapour product, down from 24.1% in 2015.

Other critics blame the company’s launch advertising in 2015, where it bought media in Vice magazine – among others – and featured young users. The company itself disputes its own advertising effectiveness.

“Our growth is not the result of marketing but rather a superior product disrupting an archaic industry,” said Victoria Davis, a Juul Labs spokesperson. “When adult smokers find an effective alternative to cigarettes, they tell other adult smokers.”

Meanwhile, Juul’s use of nicotine salts, unlike other manufacturers, has worried some experts. Salts, according to the Verge, are absorbed into the body at a similar rate to normal cigarettes. Without the irritation and coughing of traditional smoking, this means a fast-track to nicotine addiction, though this is a criticism of all vaping.

What many commentators don’t talk about is the sense of community that has arisen around Juul, specifically on social networks like Reddit, where users post their questions and photos of device moderations, thereby providing a platform for sharing uniqueness within a sympathetic community. Mix it with nicotine, and there’s a sticky combination.

Meanwhile, in the UK, MPs have called for a relaxation of laws around e-cigarettes. The all-party parliamentary committee on science and technology said that the yoking together of bans on smoking and vaping indoors was forcing vapers into smoking shelters and thereby undermining efforts to quit. It recommended allowing more advertising and a rethink of bans on vaping in public places.

Committee chair Norman Lamb MP, said: “E-cigarettes are less harmful than conventional cigarettes, but current policy and regulations do not sufficiently reflect this and businesses, transport providers and public places should stop viewing conventional and e-cigarettes as one and the same. There is no public health rationale for doing so.”

Others have called the committee’s recommendations into question, however, as some sources say it took evidence from a large number of vaping lobbyists and big tobacco, while not taking into account the other side.

Sourced from CNBC, Financial Times, New Yorker, Juul, USA Today, The Verge, Reddit, The Guardian, The Telegraph