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07/05/2022

NACS Supports JUUL in Fight Against FDA's Marketing Denial

The association argues a removal of the company's vapor products will negatively affect c-store retailers.
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U.S. Court of Appeal for the District of Columbia Circuit seal

ALEXANDRIA, Va. — The removal of JUUL vapor products from the market would impact a convenience retailer's tobacco category — a change that led NACS to throw its support behind JUUL Labs in its legal challenge against the Food and Drug Administration (FDA).

On June 30, the association filed an amicus brief in the U.S. Court of Appeal for the District of Columbia Circuit in support of JUUL's petition for a stay of the FDA's marketing denial orders (MDOs).

The FDA issued its MDOs for all JUUL products currently on the market on June 23. Less than 24 hours after the announcement, JUUL Labs asked the U.S. Court of Appeals for the D.C. Circuit for, and received, an emergency administrative stay and filed a motion for an emergency stay on June 27.

Under the court's timeline, the FDA has until noon on Thursday, July 7 to respond.

"If allowed to take effect, the order threatens NACS members with harm independent of the harm JUUL describes in its stay application," NACS wrote in the brief. "The order saddles retailers and distributors with inventory they cannot sell and contracts they cannot fulfill, waylaying a substantial portion of their business practically overnight."

According to the association, the immediate removal of JUUL products would "wreak havoc" on an entire industry, upend an important segment of the economy, endanger countless jobs and impedes small businesses' ability to operate.

JUUL makes up about a third of the market share of electronic nicotine delivery systems, and such a central market figure necessarily relies on vast supply chains to move inventory, NACS added.

"There is no doubt that the order freezes retail sales of millions of JUUL units in inventory. Those units will take up retail backroom space and gather dust absent a stay," NACS wrote. "This is not costless: JUUL acknowledges that its products 'are meant to be used soon after purchase' before 'the flavor or quality decrease[s].' And the retailers saddled with this unsellable product foot the cost of storage and may have to absorb the entire cost of purchasing those products."

NACS also raised concerns that the FDA's decision will move JUUL products from the backbar to the black market.  It urged the FDA to stay its MDO on JUUL products because of the harm it could cause retailers and distributors of JUUL's products.

"That harm further tips the balance in favor of a stay. There is no sufficient justification to impose on NACS members uncertainty with regard to contractual obligations and unusable inventory and force upon them storage costs and lost revenue from a range of products in addition to e-cigarettes. These consequences are obvious, immediate and ongoing," the association wrote.