Businesshala News Exclusive | The 27-Year-Old Friends Behind Puff Bar—Teens’ Favorite E-Cigarette

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Puff Bar’s co-CEOs Patrick Beltran and Nick Minas defend efforts to keep fruity flavors in the U.S. market and outside the purview of the FDA.

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“We are doing everything we can to prevent underage use,” said Patrick Beltran, who identified himself as co-owner and co-CEO of Puff Bar with his business partner Nick Minas. Mr Beltran and Mr Minas said the rise of youth vaping is the result of loose enforcement of smoke shops, which they said are selling e-cigarettes to minors. He said counterfeiters have contributed to the problem by flooding the market with puff bar counterfeits.

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Mr. Minas said he and Mr. Beltran are the co-CEOs and sole owners of the puff bar brand. Their ownership could not be independently confirmed.

The puff bar vaporizers are similar in size to the market-leading e-cigarette brand Juul, which is manufactured by Juul Labs Inc. But Puff Bars are disposable and come in a variety of flavors, including Watermelon, Lemon Ice, and Blue Razz. They are sold online and in stores for only $9 each. For many years Juul has been a leading brand among children and teenagers. Its popularity among the youth has declined this year after curbing sales of its sweet and fruity flavors and taking other steps to curb youth use of its products.

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Mr Minas and Mr Beltran said Puff Bar voluntarily halted its sale in July 2020, following disagreements among its shareholders on how to resolve the issue of youth access. A week later, the FDA ordered its products off the US market. In February, Puff Bar resumed its sales with improvised products containing synthetic nicotine, which is not derived from tobacco. The FDA regulates tobacco products and smoking cessation devices such as nicotine gum; Synthetic-nicotine vaporizers do not come under its purview.

Mr Beltran said the company is complying with the law. He called the Puff Bar’s ingredient change “a forced innovation” and said his company did it to provide its consumers “the product they want”.

“The FDA has not given us a choice,” Mr. Minas said. Puff bars have helped many users quit traditional cigarettes, he said.

The FDA says it is now considering how to address Puff Bar and several other brands that state that their products contain synthetic nicotine and therefore do not come under agency oversight.

Puff Bar entered the US market in 2019. At the time, it was owned by the California company Cool Clouds Distribution Inc. In February 2020, to curb youth vaping, the FDA implemented new restrictions excluding sweet and fruit flavors in reusable e-cigarettes such as Juul. Those restrictions did not apply to disposable devices such as puff bars.

According to Nielsen data, puff bar sales picked up. Lawmakers and public-health groups, concerned that young people are turning to puff bars, called on the FDA to intervene. Cool Clouds sold the puff bar to the brand’s Chinese maker, DS Technology Licensing LLC, in early 2020 after an FDA investigation and criticism that vaporizers were attracting young people, the Journal previously reported.

M/s Minas and Beltran became executives of Puff Bar as CEO and CFO respectively in the spring of 2020, when the brand was taken over by two men and DS Technology as per company filings. The young entrepreneurs owned and operated an online e-cigarette retailer called Eliquidstop LLC.

Both are friends since childhood. Both grew up in middle-class families, Mr. Minas in Burbank, Calif., and Mr. Beltran in the Glendale neighborhood of Los Angeles.

Mr. Beltran attended a community college and worked part-time as a security guard and as a customer service representative at the Los Angeles County Museum of Art. Mr. Minas attended community college, then completed a university degree in business. He started Eliquidstop when both were in school.

In May 2020, around the time Puff Bar debuted, they together bought a $1.7 million home in the Glassell Park neighborhood of Los Angeles, public records show. On Instagram, Mr Beltran has posted pictures and videos of himself playing poker with Puff Bar-branded chips, going to nightclubs and driving a luxury car.

Messrs Beltran and Minas declined to say how they came to their positions at Puff Bar. When he joined the company, Puff Bar sales were on the rise. According to lawsuits filed by Mr. Minas, Mr. Beltran and Puff Bar, the Puff Bar was counterfeit.

There was also a strong call for the FDA to take puff bars off the market. In June 2020, representative Raja Krishnamurthy (d., Ill.) sent a letter to the agency alleging that Puff Bar was targeting minors. He pointed to a marketing email from Puff Bar, which depicted a pandemic-restricted “solo-spring break” and Puff Bar as “the perfect defense against back-to-back Zoom calls, parental texts, and WFH stress” has gone.

Mr Minas said the spring-break ad was for adults. He and Mr Beltran said they never targeted children or teenagers.

A dispute in the summer of 2020 between Puff Bar shareholders halted sales in July and eventually led to a restructuring in which Mr. Minas and Mr. Beltran took full ownership of the brand, the two people said. Other shareholders wanted to close Puff Bar altogether, Mr. Minas said.

“Nick and I still wanted to continue the brand,” said Mr. Beltran. He declined to disclose details of the transaction, or the date of completion of the deal. A lawyer for DS Technology did not respond to requests for comment.

M/s Minas and Beltran said that the puff bar stopped its sales in July 2020, after which counterfeiters filled the void. In February of this year, Puff Bar resumed sales, along with two men, telling customers that its devices now contain “tobacco-free nicotine.”

In April, as new tobacco-free Puff Bars went on sale, Mr. Beltran posted a photo of his new $280,000 Lamborghini Huracan with Mr. Minas’ Lamborghini Urus on Instagram. Mr. Beltran and Mr. Minas said they have other sources of income besides puff bars.

Puff Bar is the best-selling disposable e-cigarette brand. Its sales in retail stores tracked by Nielsen totaled $156 million for the year ended September 25, according to Goldman Sachs analyst Bonnie Herzog. Mr Beltran said he could not say how many of those sales could be counterfeit products.

In a federal survey released in September, 26% of high-school vaporizers said they used puff bars, followed by Reynolds American Inc.’s Voss brand with 11%, Smoke with 10% and Joule with 6%. Of. Among middle-school e-cigarette users, 30% reported that their generic brand was puff bars.

Mr Beltran and Mr Minas said they have tried to grow and learn with the industry, and try to remain compliant.

“I always say to people, ‘There’s nothing better than breathing fresh air,'” Mr Beltran said. But, he added, “vaping isn’t going anywhere.”

Jennifer Maloney [email protected] . Feather

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