Today, the company presented a poster at the 7th Annual Vermont Center on Behavior & Health Conference summarizing the results of a RACS pilot study conducted across a subset of regional convenience stores. The pilot study was designed to assess the system’s effectiveness in improving compliance rates and to monitor its implementation in a real-world setting. Participating retail outlets updated their point-of-sale systems to be RACS-compliant and trained store employees to follow RACS requirements for age verification and bulk-purchase limits. A third-party vendor conducted the pilot study.

From May to June 2019, a total of 3,990 compliance checks were conducted at 171 participating stores, 2,219 in the month prior to the implementation of RACS and 1,771 after implementation of RACS. An age-verification failure post-installation was defined as failure of the retailer to check a customer’s I.D., failure of the RACS system to require scanning of the I.D. prior to purchase, or failure of the RACS system to reject fake, expired, or otherwise invalid I.D.s. A bulk purchase failure post-installation was defined as failure of the scanning system to limit bulk purchases, or a retailer knowingly allowing an individual to complete two or more back-to-back transactions designed to evade the bulk purchase limits.

For both age-verification and bulk-purchasing audits, failure rates dropped drastically after implementing RACS.

• For age-verification compliance, the overall failure rate fell from 36.8% for JUUL purchases before implementing RACS to 0.2% after implementation.
• For bulk-purchase compliance, the overall failure rate fell from 29.3% for JUUL purchases before implementing RACS to 1.0% after implementation. 
• 734 of 2,219 compliance checks resulted in an age-verification or bulk-purchase failure before implementation, while only 11 of 1,771 compliance checks resulted in an age-verification or bulk-purchase failure after implementation.
  • The two age-verification failures were attributable to store clerks scanning their own I.D.s on behalf of the customer.
  • Eight of the bulk-purchase failures were attributable to technical issues, including disabling of the feature, and the remaining failure was attributable to a store clerk allowing back-to-back transactions.

As previously announced, JUUL Labs’ leadership team, under the direction of newly-appointed CEO K.C. Crosthwaite, is overseeing a broad review of the company’s practices and policies to ensure alignment with its aim of responsible leadership within the industry. The preliminary evidence from this pilot study is compelling and demonstrates RACS can be an important component of a larger comprehensive youth-prevention framework that also incorporates marketing restrictions and additional controls.

In November 2018, we launched a comprehensive action plan to combat youth usage in order to preserve the potential public-health impact for the 34 million adult smokers in the United States. These actions include:

We strongly support responsible legislation, such as raising the minimum-purchasing age for tobacco products, including vapor products like JUUL, to 21 years of age. We know that obtaining tobacco products from friends or siblings who are of legal age, often high school seniors or recent graduates, is the main contributor to youth access and use.

In November of 2018, we suspended the distribution of Mango, Fruit, Creme, and Cucumber to traditional retail stores. These flavors are only currently available online at www.JUUL.com. Our website includes industry leading age-verification technology to restrict purchases to those 21 and older and limit the amount of product that can be purchased to prevent social-sourcing.

Since we submitted our action plan, we have strengthened our e-commerce platform to further restrict underage and bulk purchases:

• We revised our bulk-purchasing limits to restrict users from purchasing excess quantities of product and reselling to others, potentially youth.
• We implemented two-factor authentication for all new JUUL.com accounts.
• We incorporated facial-recognition technology, requiring a potential purchaser to upload a photo in addition to his or her government-issued identification if their personal information cannot be verified by publicly-available records

We have ramped up our secret-shopper program four-fold – from 500 to 2,000 shops per month – checking against age-verification and bulk-purchasing (2 devices and 5 pod packages per transaction) restrictions, as well as revised our policy and notified retailers that we will penalize them for FDA CMP violations.

We exited our U.S.-based Facebook and Instagram accounts, and we are continuously working to remove inappropriate third-party social media content in partnership with major social media companies. Third-party users generate more than 99 percent of all social media content related to JUUL.

We have started the process to build a robust product tracking system. Ultimately, we will be able to trace a device confiscated from an underage user back through the distribution channel, potentially identifying the retailer that sold the product, and take appropriate action. Additionally, we are moving full-steam ahead with the development of our Bluetooth-connected device that could incorporate user-level access restrictions.

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