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Juul Backs Off Effort to Overturn San Francisco Vaping Ban

Kiley Roache

(Bloomberg) -- Juul Labs Inc., the largest maker of nicotine vaporizers in the U.S., said it will stop lobbying for a ballot measure to overturn San Francisco’s ban on the sale of e-cigarette products.

The measure, called Proposition C, will still appear on the Nov. 5 ballot, but the loss of the biggest financial supporter of the effort comes at a crucial time, in the final weeks when voters are weighing the issue. Michael Bloomberg, the founder and majority owner of Bloomberg LP, is funding a campaign to defeat the measure. Ads from both sides have blanketed the city in recent weeks.

If voters pass Prop C, San Francisco would be required to abandon its ban on physical and online stores from selling e-cigarettes to customers in the city. The city voted in favor of a prohibition in June, which is set to go into effect next year. Officials cited widespread use of the products by minors and the risk of a new generation getting hooked on nicotine.

Juul is facing substantial scrutiny from U.S. agencies over what officials have described as a health epidemic for America’s youth. Last week, Kevin Burns stepped down as chief executive officer at Juul and was replaced by K.C. Crosthwaite, a former executive from Altria Group Inc., which sells Marlboro cigarettes in the U.S. and is the biggest Juul backer. Juul also said at the time that it would end controversial advertising and lobbying campaigns.

“This decision does not change the fact that as a San Francisco-founded and headquartered company, we remain committed to the city,” Crosthwaite said in a statement late Monday. “San Francisco is not only the home of our company’s founding but is also the home of many of our talented employees.”

The Texas A&M University System said it’s banning vaping and e-cigarettes at each of the 11 universities and eight state agencies within the system. Smoking is already banned in most places in the system, “But the ban on vaping is to be mandatory and expanded to every inch of the Texas A&M System,” it said in the statement.

Larry Tramutola, director of SF Kids vs. Big Tobacco, an advocacy group, said Juul had already “shattered spending records for a corporate-sponsored committee -- and that was 45 days before the election.”

Juul has been weighing job cuts as it braces for a potential nationwide ban on some of its products at home and uncertainties in growth markets, such as China and India, where sales were recently paused or halted. The company faces at least 55 lawsuits in more than 20 states. Juul asked a federal court panel last week to send the suits to San Francisco, so it could litigate them in the company’s hometown.

(Updates with Texas A&M banning vaping in sixth paragraph)

To contact the reporter on this story: Kiley Roache in New York at kroache@bloomberg.net

To contact the editors responsible for this story: Jillian Ward at jward56@bloomberg.net, Timothy Annett

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