MORGAN STANLEY: Juul, Silicon Valley’s favorite vaping startup, is drawing in young users who don’t smoke

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  • Morgan Stanley research finds that while Juul helps smokers lower their cigarette consumption, it’s still drawing in plenty of young non-smokers, too.
  • The report also finds that non-smokers are typically drawn to Juul primarily by social marketing.
  • Analysts think the FDA will roll out a series of policies by year-end to better control the rising rates of teen e-cigarette usage.

Popular e-cigarette startup Juul Labs has been facing controversy recently over the appeal of its products for minors.

In September, the US Food and Drug Administration announced that it was taking steps to crack down on the sale of e-cigarette products – like the increasingly popular Juul – to minors. JUUL responded that it planned to work with the FDA, and that its “mission is to improve the lives of adult smokers by providing them with a true alternative to combustible cigarettes.”

But evidence has been mounting that Juul’s products have significant appeal to young people.

The latest comes in a Morgan Stanley research report published Thursday. It found that about 15% of Juul users weren’t smokers before they started vaping, and that group tended to be younger than other vapers.

On Tuesday, a different survey found that a higher portion of young people aged 15-17 are using the Juul at least once a month compared to those aged 25-34.

Morgan Stanley surveyed 402 Juul users above age 18, so the bank’s survey doesn’t provide information about users younger than that. Among the youngest group in the survey, those 18-24, a third hadn’t smoked before starting to use Juul.

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There were some positive findings for Juul in the survey, according to the research report. Juul helped almost half of its users who also smoke cigarettes cut down on their cigarette consumption. About 16 percent stopped smoking entirely.

Some moved in the other direction. Of the nonsmokers, 20% became smokers after using Juul. The report highlights this as “a potential area of concern as the FDA is evaluating Juul’s prevalence among youth and its role as a gateway to cigarettes.”

CNBC has reported that preliminary data from the government’s National Youth Tobacco Survey found a 75% rise in teen e-cigarette usage in the last year, to about 3 million high-school users.

FDA Commissioner Scott Gottlieb has said that new policies to regulate e-cigarette usage will be put out by the agency by the end of this year. The analysts said these policies may include moving up the pre-market tobacco product application deadline for e-cigarettes from 2022 to an earlier date, restrictions on the range of e-cigarette flavors, and possible limits on distribution.

 

Source: Business Insider

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