Embattled e-cigarette manufacturer JUUL Labs is moving its headquarters from San Francisco to D.C., where it can be closer to lawmakers and regulators — but will still face a range of possible restrictions on its products from jurisdictions in the Washington region.
The company’s move from the Bay Area was first reported by The Wall Street Journal, and confirmed to WAMU by a source with direct knowledge of the situation who was not authorized to speak publicly. JUUL said it had no public comment on the pending move at this point, but the source confirmed that the company would still keep a San Fransisco office for product and software development.
The move is both symbolic and practical. It puts the dominant player in the e-cigarette market closer to federal lawmakers and regulators whose work could well shape the company’s future earnings and potential. It is also happening as part of an internal restructuring that will see workforce reductions and a paring down of the number of offices JUUL has.
But if San Francisco proved a hostile home base for JUUL — a ban on the sale of e-cigarettes in the city took effect earlier this year — D.C. may be no more inviting. The D.C. Council is considering a pair of bills targeting e-cigarettes, one that would prohibit the sales of flavored products (which were partially banned this year by the Food and Drug Administration) and another that would forbid vaping without a doctor’s prescription. Several Maryland counties are suing JUUL, and neighboring Montgomery County put in place a range of possible restrictions on e-cigarettes, including prohibiting vape shops within a half-mile of a middle or high school.
D.C. Attorney General Karl Racine has also sued JUUL for allegedly marketing its products to youth; the company is also facing a lawsuit filed by Breathe D.C., a non-profit health organizing, over claims it misled consumers about how much nicotine its products contain.
JUUL is fighting both lawsuits in court, and says that it has proactively taken steps — like suspending the sale of flavored pods last October and suspending U.S. advertising — as a means to “reset the vapor category by earning the trust of society and working cooperatively with regulators, policymakers, and stakeholders to combat underage use while providing an alternative to adult smokers.”
A move of any large corporation into D.C. would usually draw praise from local officials, but JUUL’s planned relocation is being panned by some lawmakers.
“JUUL is Big Tobacco,” said Councilmember Charles Allen (D-Ward 6) in a statement. “They aren’t moving here because of our amazing parks and libraries. They want to head off legislation designed to stop their products, which are dangerous, addictive and aimed at hooking the next generation. No thanks.”
And the move is happening without the assistance of the D.C. government. When asked whether the city provided any financial incentives to entice the company to leave San Francisco, Deputy Mayor for Planning and Economic Development John Falcicchio responded with a single word: “No.”