A US vaping product, which is so popular with young people it's under fire by the FDA, is coming to New Zealand. In the second part of his Smoke and Mirrors investigation, Guyon Espiner learns JUUL wants its high-concentration nicotine products in the country by the end of the year.
Pungent clouds of thick, white vapour billow out of the mouths of the young women in hi-viz jackets standing at the workbench.
"It's awesome," Kimberly says. "Good place to work, very good place."
Not that the location of the VAPO warehouse, in an industrial part of East Auckland, is anything special. But you do get to vape on the job.
"This is blue pom mojito. Tastes quite nice. Want to try?" asks Taylor, who still smokes tobacco as well as vaping. Kimberly still smokes cigarettes too, but since taking up vaping she has gone from three packs a week to one. "I have tried cold turkey, but it didn't work."
VAPO is a homegrown company and the dominant player in the New Zealand vaping scene. But everything is about to change. With a government push to encourage adult smokers to switch to vaping, big tobacco has sniffed an opportunity and a behemoth is coming.
Turbo charged with a $20 billion investment from tobacco giant Altria, the parent company of Philip Morris, JUUL is worth a staggering $57 billion (a start up in the league of Airbnb) and it wants to launch here by the end of the year.
JUUL's sleek device, not much bigger than a flash drive, has been called the iPhone of vaping. American kids don't talk about vaping, they talk about 'JUULing'.
JUUL has 75 percent of the US market. It's a highly addictive product, which commonly has three times the nicotine allowed by the European Union. Youth uptake has alarmed the US Food and Drug Administration (FDA), which characterised vaping as an "addiction epidemic", after the number of teenagers using e-cigarettes doubled between 2017 and 2018, making it the largest increase in the use of any substance in more than 40 years.
In San Francisco, where JUUL began in 2015, e-cigarettes have been banned.
Read more from the Smoke and Mirrors investigation
After a few weeks of emails, phone calls and a background briefing via conference call, RNZ got an interview with JUUL - the first the company has given to media about its plans to launch here.
Ken Bishop is on the line from Singapore, where he's vice president of international growth for Asia-Pacific. He came to JUUL after seven years with Facebook.
Asia-Pacific is big business for JUUL, he says. "There's a billion smokers worldwide and 50 percent of those smokers live in the Asia-Pacific region. Our ultimate goal is to be available to every smoker around the world and that goal is consistent with [being in] New Zealand."
JUUL has just launched in South Korea despite pushback from the country's Ministry of Food and Drug Safety, which said there were no grounds to conclude e-cigarettes were safer than conventional tobacco.
Bishop says JUUL is eager to launch in New Zealand. "We do have the intention of being in New Zealand. If we can be in New Zealand in 2019, that would be very good. But I don't want to make any specific commitments on the timelines at this point."
The plan is to sell JUUL online, in convenience stores, petrol stations and dairies and possibly its own stores.
"Depending on the regulatory environment, we want to be as widely distributed as possible. We want to be available wherever tobacco is sold."
It's a distribution model that worries Professor Janet Hoek, from the department of public health at Otago University. She believes vaping can help people ditch cigarettes and is on an expert advisory group run by the Health Promotion Agency and the Ministry of Health, which sees vaping as a viable smoking cessation tool. Hoek, who is also co-director of Aspire2025, which aims to achieve a smoke-free New Zealand, sees JUUL differently.
She fears rather than helping adult smokers quit cigarettes, JUUL could addict a new generation to nicotine. "This device has proved immensely popular among young people and so I think we need to be concerned in New Zealand that young people here in Aotearoa don't take up JUULing in the same way as we've observed in the US."
In America the FDA has demanded JUUL, along with four other smaller vaping companies, address the issue of youth uptake. Scott Gottlieb, who has just stepped down as FDA chief executive, said while vaping may be a lower risk option for adult smokers, "that opportunity cannot come at the expense of addicting a whole generation of kids on nicotine".
Gottlieb questions whether vaping companies are deliberately targeting young people, given "the number of kids now using these products is so large it is hard for me to understand how the manufacturers don't know what we know."
JUUL, who had previously commissioned controversial Instagram campaigns featuring influencers, felt the heat and shut down all its social media accounts, except Twitter, which it uses for corporate press releases.
"We suspended that, because we felt like that was a point in which under age people might be exposed to the product," Bishop says. "I spent seven years at Facebook and so I believe in the power of social media as a mechanism to do good things in the world. But we felt like it was not the right channel for us to be present in for those reasons."
JUUL has also been forced to restrict its flavours because authorities, including in its hometown of San Francisco, were worried they were attracting teenagers.
Bishop says the flavours play an important role in helping adult smokers switch to vaping, but that JUUL now does "perception tests" to make sure a flavor doesn't disproportionately appeal to underage people. Watermelon apparently scored well with adult smokers but was too enticing for teenagers so was quietly shelved.
But of course what hooks people isn't watermelon flavour, but nicotine - and JUUL has plenty of that. The thumbnail sized JUUL pod you put into the device contains 5 percent nicotine - about the same amount as a packet of cigarettes. JUUL offers lower concentrations of 3 percent and 1.5 percent for countries that limit nicotine levels, and for smokers trying to wean themselves.
Bishop defends JUUL's high nicotine level. "What causes the harm is not nicotine, it's the combustion of tobacco," he says. In fact, JUUL has created its e-liquid to mimic the experience a cigarette delivers. "When they use our products, from a nicotine delivery point of view, they feel satisfied and if they feel satisfied they're much more likely to switch [from cigarettes]."
Bishop says because New Zealand has no regulation on nicotine strengths JUUL "would want to give the New Zealand smokers a full range of options" and will likely offer all three strengths here.
Nicotine itself may be relatively harmless to adults, but many experts have warned about its effect on youth, including the US Surgeon General who said in 2016 that exposure "can cause addiction and harm the developing adolescent brain".
JUUL also adds benzoic acid to the vaping liquid to mimic the rapid nicotine hit you get with cigarettes. "It's purely to maximise the probability that a smoker will be able to switch, through delivering the most consistent experience to a cigarette as possible," Bishop says.
JUUL has been pitching itself as a company on a mission to eradicate smoking, but its history haunts it. In an interview with The Verge website in 2015, Ari Atkins, who worked on JUUL's product development, said "we don't think a lot about addiction here, because we're not trying to design a cessation product at all". He went on to say that "anything about health is not on our mind".
Now JUUL claims its product is 99 percent safer than combustible cigarettes. It's easy to find reputable studies, including from Public Health England, which assess vaping, generally, as about 95 percent safer than combustible tobacco.
But it's also easy to find reputable studies which highlight considerable concerns. Data presented this year to the American College of Cardiology showed that e-cigarette users were 56 percent more likely to have a heart attack than non-users. The study, one of the largest ever into vaping, which used data from more than 96,000 Americans, also concluded e-cigarette users were 30 percent more likely to suffer a stroke than people who didn't vape.
Letitia O'Dwyer, chief executive of the New Zealand Asthma and Respiratory Foundation, says vaping isn't harmless. "There looks to be some lung tissue damage and cellular tissue damage from the ingredients in these products and so we do need to look at that," she says. "We simply can't say whether something's going to cause cancer because that's very long term."
And is vaping even effective as a smoking cessation tool? "They are helping some people to stop smoking," says Professor Janet Hoek. "But not everybody who wants to quit smoking by using a vape, succeeds."
Some end up using both. A study published in the British Medical Journal in 2018 showed that those smoking just one cigarette a day still had 50 percent of the cardiovascular disease risk of those smoking 20 cigarettes a day does.
"People need to make a full and complete transition from smoking to vaping," Hoek says.
In an office above the VAPO warehouse in Auckland are two former smokers who did manage to quit completely. In fact, Ben Pryor and Jonathan Devery liked vaping so much they built a company, setting up the VAPO and Alt brands four years ago. Their vaping products are available in 1000 outlets, they employ 80 staff and have eight stores. "We are clearly leading the field," Devery says, although he's coy about the company's market share.
They know JUUL will be a threat to their company. "We're a small to medium sized, independently operated New Zealand business. We are now competing against international tobacco companies with very deep pockets," Devery says.
With a big battle about to go down for market share, the players are waiting for the government to set the rules of the game. Currently vaping is unregulated in New Zealand - there are no minimum safety standards and how they can be advertised and sold is a grey area.
"We have been lobbying and asking for regulation for a long time," Devery says. "We've invested a lot of money in our laboratory to ensure that the ingredients and environment in which our liquids are made is safe."
New vaping laws are set to be introduced by the government soon. A Cabinet paper outlines an aim to encourage greater access to "quality vaping products" to prompt adult smokers to switch, and to introduce safety standards to bring vaping in line with tobacco as to where it can be used, sold and advertised.
After 30 minutes, our time on the phone with JUUL's Ken Bishop is nearly up. He's encouraged by the direction the New Zealand government is going with vaping, but says JUUL might hit New Zealand before the government announces regulations.
"We believe that regulations are important and we encourage those regulations. However, I wouldn't be able to commit to only launching subsequent to regulation."
It seems that JUUL is coming, ready or not.