JUUL LABS ACTION PLAN

Message From Kevin Burns, CEO, JUUL Labs:

JUUL Labs is committed to improving the lives of the world’s one billion adult smokers, with the ultimate goal of eliminating cigarettes. While we have been working to solve that problem, another unintended and serious problem has developed – underage use of e-cigarettes, including JUUL.

We don’t want anyone who doesn’t smoke, or already use nicotine, to use JUUL products. We certainly don’t want youth using the product. It is bad for public health, and it is bad for our mission. JUUL Labs and FDA share a common goal – preventing youth from initiating on nicotine. To paraphrase Commissioner Gottlieb, we want to be the off-ramp for adult smokers to switch from cigarettes, not an on-ramp for America’s youth to initiate on nicotine. We won’t be successful in our mission to serve adult smokers if we don’t narrow the on-ramp.

Our intent was never to have youth use JUUL products. But intent is not enough, the numbers are what matter, and the numbers tell us underage use of e-cigarette products is a problem. We must solve it.

For us to successfully fulfill our mission of helping adult smokers, we must be trusted – and we must earn that trust. That starts with action, not words. Here is our action plan:

What We Are Doing Now With Flavors

Stopping Flavored JUUL pod Sales To All 90,000+ Retail Stores

We launched flavors like Mango, Fruit, Creme, and Cucumber as effective tools to help adult smokers switch from combustible cigarettes, and we do not sell flavors like Gummy Bear or Cotton Candy, which are clearly targeted to kids.

However, we are sensitive to the concern articulated by Commissioner Gottlieb that “[f]lavors play an important role in driving the youth appeal,” and understand that products that appeal to adults also may appeal to youth.

As of this morning, we stopped accepting retail orders for our Mango, Fruit, Creme, and Cucumber JUUL pods to the over 90,000 retail stores that sell our product, including traditional tobacco retailers (e.g., convenience stores) and specialty vape shops.

Restricting Flavors To Adults 21+ On Our Secure Website

We will now make Mango, Fruit, Creme, and Cucumber available only on JUUL.com, where we are adding additional age-verification measures to an already industry-leading online sales system that is restricted to people 21+ and utilizes third party verification.

To complete an order at JUUL.com, users are asked to provide their name, date of birth, permanent address, and the last four digits of their social security number. This information is verified by a third party and cross-referenced with publicly available records to confirm the person is at least 21 years of age. If a user’s public records fail to match or they do not wish to provide their social security number, they must upload a valid government-issued I.D. for review by a member of the company’s compliance team.

To prevent bulk shipments to those attempting to distribute to minors, online customers are strictly limited to two devices and fifteen JUUL pod packages per month, and no more than ten devices per year.

By year’s end, our age verification system will include additional protections, such as two-factor authentication, which verifies a user’s identity through their phone number, and then requires a code sent to that phone to create an account. We will also add a real-time photo requirement to match a user’s face against an uploaded I.D.

Our data show that flavors play a critical role in adult smokers’ ability to switch from combustible cigarettes, but we must prevent youth access. This is why we are using the strongest tools available to prevent underage purchases on our website, while still maintaining the availability of flavored JUUL pods for adult smokers who deserve the best chance of switching from cigarettes.

What We Are Doing Now In Retail Stores

Strengthening Retail Compliance

Only JUUL pods that mirror what is currently available for combustible cigarettes – tobacco and menthol-based products (Menthol and Mint pods) – will be sold to retail stores, including traditional tobacco retailers (e.g., convenience stores) and specialty vape shops.

To secure sales of these products, we are immediately increasing our secret shopper program, from 500 visits per month to roughly 2,000 per month, to verify that our standards are being followed by retailers. We will also impose financial consequences against retailers caught by FDA selling to minors or allowing bulk sales of our products. We will permanently cut off all sales to retail stores with multiple violations.

Stopping Unauthorized Online Sales

In addition to monitoring retail locations, we will continue enforcement efforts against online marketplaces that sell JUUL products in violation of their terms-of-service. This year alone, JUUL Labs has worked with online marketplaces, such as eBay, Alibaba, Amazon, and DHgate, to remove more than 22,000 third-party listings of JUUL products and/or counterfeits. Engaging with these online marketplaces to remove unauthorized listings will remain an ongoing part of our action plan.

What We Are Doing Now About Social Media

Shutting Down Social Media And Ramping Up Our Fight Against Third Party Accounts

We are attacking the presence of JUUL Labs on social media in two ways – eliminating our own social media accounts and continuing to monitor and remove inappropriate material from third-party accounts.

More than 99 percent of all social media content related to JUUL Labs is generated through third-party users and accounts with no affiliation to our company. Nevertheless, we understand that many young people get their information from social media. To remove ourselves entirely from participation in the social conversation, we have decided to shut down our U.S.-based social media accounts on Facebook and Instagram. We have never used Snapchat. Our presence on Twitter will be confined to non-promotional communications only. YouTube will only be used for posting testimonials of former adult smokers who have switched to the JUUL system, in part to support online content on JUUL.com. We have already imposed 21+ age-gating restrictions for users to access our YouTube content.

By deterring social media promotion of the JUUL system by exiting our accounts, we can better prevent teens and non-smokers from ever becoming interested in the device.

User-generated social media posts involving JUUL products or our brand are proliferating across platforms and must be swiftly addressed. There is no question that this user-generated social media content is linked to the appeal of vaping to underage users. This is why we have worked directly with social media platforms to remove tens of thousands of inappropriate posts.

We have asked Facebook, Instagram, Twitter, and Snapchat for their assistance in policing unauthorized, youth-oriented content on their platforms. We asked that each platform prohibit the posting of any content that promotes the use of cigarettes or e-cigarettes by underage users. The problem of combating social media’s negative influence on underage vaping is larger than simply removing the JUUL Labs social media accounts, and it can only be solved with the assistance of these companies. The solution to combat underage use requires a strong effort on both of our ends, and we are eager to work with these social platforms to solve these issues.

We will continue to monitor, report, and rapidly remove youth-oriented social media content from third-parties or users.

What We Are Doing In The Future

Restricted Distribution System (RDS) To Impose 21+ And Bulk Sale Requirements

We will only restart accepting orders for Mango, Cucumber, Fruit, and Creme from retail stores that can legally sell flavors and comply with the criteria of our new 21+ Restricted Distribution System:

Retail stores must invest in technology that designates flavored JUUL products as restricted.

Once the products are designated restricted, clerks must electronically scan I.D.s for flavored JUUL pod purchases, as well as visually verify the customer’s I.D. Purchasers will need to be 21+ to buy flavored JUUL pods regardless of local laws.

Once an I.D. is scanned, the user will be age-verified, and the sale quantity will be limited to prevent bulk purchases.

Developing New Technology To Further Restrict Access – Product Tracking And Age-Gated Bluetooth Device

We are a technology company and will continue to use the latest breakthroughs to bolster user protections on our device. We are developing end-to-end traceability to track where a specific JUUL device or JUUL pod was purchased to focus enforcement efforts on bad actors. Keeping track of devices through a serial number is one of the most effective ways we can monitor where our products are ending up, as well as identify counterfeit products.

JUUL Labs has also invested tens of millions of dollars and spent over a year working on our next-generation, Bluetooth-enabled device, which will break new ground on access restrictions at the user level.

Our next-generation device will first launch in select international markets. We intend to work cooperatively with FDA to explore a regulatory pathway to bring this product to market in the U.S. We strongly believe such technologies will provide new levels of control that combustible cigarettes could never offer and are fully committed to provide these options to all adult smokers looking to switch.

Conclusion

We are implementing this plan starting today. We will be a transparent, engaged, and committed partner in this effort with FDA, state Attorneys General, local municipalities, and community organizations. We thank Commissioner Gottlieb for his ongoing leadership on this critical issue. JUUL Labs hopes the components of our plan are implemented industry-wide. If implemented across the category, these actions will have the greatest impact in restricting access and ultimately decreasing underage use, along with 21+ laws on all tobacco products. On that point, JUUL Labs will not only continue to support Tobacco 21, we will actively pursue it by drafting legislation, funding advocacy campaigns, and engaging with lawmakers.

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