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North Carolina AG Opens Investigation Into E-Cigarette Maker Puff Bar

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By Michael Jordan, Chris Carlson & Agustin Rodriguez on November 18, 2021
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On November 16, North Carolina Attorney General Josh Stein launched a probe into e-cigarette maker Puff Bar and others, citing concerns of youth-appealing flavors, youth marketing, and poor age verification. In a statement, Stein announced, “We are actively investigating Puff Bar and other companies at all stages of the distribution chain, from manufacturers to retailers and everything in between to ensure they are not profiting off kids.”

The move marks the latest regulatory scrutiny for Puff Bar, which recently received an investigatory inquiry from the U.S. House Oversight Committee’s Subcommittee on Economic and Consumer Policy. The November 8 subcommittee letter alleges that Puff Bar reformulated its products in summer 2020 to replace tobacco-derived nicotine with synthetic nicotine in a bid to restart sales, while avoiding scrutiny from the U.S. Food and Drug Administration (FDA).

In the letter, the subcommittee appeared concerned that Puff Bar is attempting to avoid application of the Federal Food, Drug, and Cosmetic Act (FDCA) because the statute defines “tobacco product” as “any product made or derived from tobacco that is intended for human consumption, including any component, part, or accessory of a tobacco product.” 21 U.S.C. § 321(rr)(1) (emphasis added). As the FDA concedes on its website, “it’s possible that a disposable, closed system device that contains an e-liquid with truly zero nicotine (or synthetic nicotine) would not be regulated by the FDA as a tobacco product.”

Puff Bar’s synthetic nicotine shield from FDA scrutiny, however, might be short-lived for two reasons. First, in addition to the state and federal inquiries noted above, 31 state and territories attorneys general sent a letter to the FDA on August 18, urging the agency to act on flavored e-cigarettes. Notably, this bipartisan group of states and territories — led in part by North Carolina — singled out Puff Bar’s disposable e-cigarettes and encouraged the FDA to regulate them as a “drug” if not a “tobacco product.” Because the FDCA defines drug, among other things, as “articles (other than food) intended to affect the structure or any function of the body,” 21 U.S.C. § 321(g)(1), synthetic nicotine could qualify as a drug subject to FDA oversight to the extent it is intended to affect a consumer’s body.

Second, we expect that the North Carolina attorney general’s investigation will be based upon alleged violations of North Carolina consumer protection laws, which the attorney general is empowered to enforce. The North Carolina attorney general has utilized the same state statutes against manufacturers and retailers in previous enforcement actions related to e-cigarette use and against other industries that are primarily regulated at the federal level.

Whether or not FDA acts on synthetic nicotine, the mounting scrutiny of e-cigarette makers like Puff Bar could foreshadow renewed regulatory interest on the part of FDA, if not federal legislation, expanding the definition of “tobacco product.” If such action is not taken at the federal level, the North Carolina attorney general’s action signals that the states are willing to take matters into their own hands. Stay tuned.

Photo of Michael Jordan Michael Jordan

Michael Jordan is an associate in Troutman Pepper’s Richmond office. Michael draws on a diverse range of experiences in government and private practice to help clients navigate complex regulatory issues. He focuses primarily on heavily regulated industries, such as tobacco and cannabis.

Read more about Michael JordanEmail
Photo of Chris Carlson Chris Carlson

Chris Carlson represents clients in regulatory, civil and criminal investigations and litigation. In his practice, Chris regularly employs his prior regulatory experience to benefit clients who are interacting with and being investigated by state attorneys general.

Read more about Chris CarlsonEmailChris's Linkedin Profile
Photo of Agustin Rodriguez Agustin Rodriguez

Agustin is sought after by clients for his strategic counsel on their most challenging competitive and regulatory compliance issues, including tobacco Master Settlement Agreement issues, federal and state enforcement investigations, licensing and excise tax issues, developing compliance programs, and evaluating advertising and marketing…

Agustin is sought after by clients for his strategic counsel on their most challenging competitive and regulatory compliance issues, including tobacco Master Settlement Agreement issues, federal and state enforcement investigations, licensing and excise tax issues, developing compliance programs, and evaluating advertising and marketing practices. A partner in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group as well as its Tobacco and Cannabis law practices, he represents manufacturers, distributors, retailers, and suppliers in all aspects of their businesses, including regulatory compliance, FDA requirements, administrative disputes involving federal or state governmental entities, mergers and acquisitions, commercial agreements, and taxation matters.

Read more about Agustin RodriguezEmail
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  • Posted in:
    Civil Litigation, Corporate Compliance
  • Blog:
    Regulatory Oversight
  • Organization:
    Troutman Pepper Hamilton Sanders LLP
  • Article: View Original Source

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