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Shares of the Louisville-based tobacco company Turning Point Brands fell more than 10 percent Thursday morning after the FDA chief issued an e-cigarette warning, calling youth use of the product an “epidemic” and a “clear and present danger.”

The Food and Drug Administration has sent more than 1,300 warning letters and is threatening to fine retailers who illegally sold JUUL and other e-cigarette products to minors during a nationwide, undercover investigation this summer. Eight retailers in Louisville received warning letters.

The agency has asked five e-cigarette manufacturers to put forward plans “to immediately and substantially” reverse trends that make e-cigarettes popular among youth — or face federal intervention.

Dr. Scott Gottlieb

“We see clear signs that youth use of electronic cigarettes has reached an epidemic proportion, and we must adjust certain aspects of our comprehensive strategy to stem this clear and present danger,” FDA Commissioner Dr. Scott Gottlieb said in a news release.

While the commissioner said that he continues to believe that e-cigarettes could help wean adults of combustible cigarettes, “that work can’t come at the expense of kids.”

Last year, more than two million middle and high school students were current users of e-cigarettes, the FDA said. Kentucky is fifth among U.S. states and territories for daily e-cigarette use.

Louisville health professionals and researchers have warned that the use of e-cigarettes threatens public health.

Gottlieb criticized especially the manufacturer’s use of certain flavors, which he said “are one of the principal drivers of the youth appeal of these products.”

The agency has asked manufacturers of Vuse, Blu, JUUL, MarkTen XL and Logic, which comprise more than 97 percent of the U.S. e-cig market, to submit plans describing how they will address the widespread youth access and use of their products.

If they fail to comply, the agency said it might force them to “remove some or all of their flavored products that may be contributing to the rise in youth use from the market until they receive premarket authorization and otherwise meet all of their obligations under the law.”

The agency said it also might take other actions including making it more difficult for manufacturers to access markets, evaluating manufacturers’ internet storefronts and distribution practices and stepping up enforcement actions “with a sustained campaign to monitor, penalize and prevent e-cigarette sales in convenience stores and other retail sites.”

Source: FDA | Graphic by Boris Ladwig

Many of the businesses that received warning letters or threats of penalties were convenience stores, including in Louisville, a Circle K on Shepherdsville Road, a Speedway on Fegenbush Lane and a Thorntons on Third Street

Louisville-based Turning Point Brands sells tobacco-related products including chewing tobacco, e-cigarette liquids, cigars and pipe tobacco under brands including Stoker’s, Zig-Zag and VaporBeast. Its shares fell more than 10 percent early Thursday, to $39.07, but recovered a bit and shortly before 1 p.m. traded for around $41.05, down 5.6 percent.

In an emailed statement, Brittani Cushman, vice president of external affairs for TPB, said the company “shares the FDA’s commitment to keep e-cigarettes out of the hands of minors.

Brittani Cushman

“We work with our brands and with our retailer partners to ensure that our products are not sold to children,” Cushman said.

But Cushman also pushed back against Gottlieb’s statements about flavors attracting kids to e-cigarettes, saying that TPB has found that flavors “are often useful … to moving adult smokers away from combustible cigarettes.”

Just last week, the company’s shares had spiked after TPB announced that it was buying an e-cigarette distributor.

Last month, the company said that it had recorded net sales of $81.1 million, up 12.5 percent from a year earlier. Net income, at $9.3 million, was up 25.3 percent.

For the year, shares are still up nearly 100 percent.

UPDATE: This story was updated to include statements from TPB.

Boris Ladwig is a reporter with more than 20 years of experience and has won awards from multiple journalism organizations in Indiana and Kentucky for feature series, news, First Amendment/community affairs, nondeadline news, criminal justice, business and investigative reporting. As part of The (Columbus, Indiana) Republic’s staff, he also won the Kent Cooper award, the top honor given by the Associated Press Managing Editors for the best overall news writing in the state. A graduate of Indiana State University, he is a soccer aficionado (Borussia Dortmund and 1. FC Köln), singer and travel enthusiast who has visited countries on five continents. He speaks fluent German, rudimentary French and bits of Spanish, Italian, Khmer and Mandarin.


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