Patrick Beltran and Nick Minas, co-CEOs of Puff Bar, defend efforts to keep fruity flavors on U.S. market and outside of FDA’s purview
Two 27-year-old vaping entrepreneurs are the mystery men behind Puff Bar, the most popular e-cigarette brand among teens, which regulators have tried and failed to force off the U.S. market.
In interviews with The Wall Street Journal, the business partners discussed the brand’s popularity among young people and Puff Bar’s decision to reformulate its products with synthetic nicotine so they don’t fall under the jurisdiction of the U.S. Food and Drug Administration.
“We’re doing everything we can to prevent underage usage,” 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 lax enforcement of smoke shops that they said are selling e-cigarettes to minors. They added that counterfeiters have contributed to the problem by flooding the market with Puff Bar fakes.
Mr. Minas said he and Mr. Beltran are co-CEOs and sole owners of the Puff Bar brand. Their ownership couldn’t be independently confirmed.
Puff Bar’s vaporizers are similar in shape to the market-leading e-cigarette brand Juul, sold by Juul Labs Inc., but Puff Bars are disposable and come in a wider array of flavors, including Watermelon, Lemon Ice and Blue Razz. They are sold online and in stores for as little as $9 apiece. Juul for several years was the leading brand among children and teens. Its popularity among young people dropped this year after it halted sales of its sweet and fruity flavors and took other steps to prevent youth use of its products.
uff Bar voluntarily halted its sales in July 2020, amid a disagreement among its shareholders over how to address the issue of youth use, Mr. Minas and Mr. Beltran said. A week later, the FDA ordered its products off the U.S. market. In February, Puff Bar resumed its sales with reformulated products containing synthetic nicotine, which isn’t derived from tobacco. The FDA regulates tobacco products and smoking-cessation devices such as nicotine gum; synthetic-nicotine vaporizers don’t fall under its purview.
Mr. Beltran said the company is complying with the law. He called Puff Bar’s ingredient change “a forced innovation,” and said his company did it to provide its consumers with “the product that they want.”
“The FDA has given us no choice,” Mr. Minas said. Puff Bar has helped many users quit traditional cigarettes, he said.
The FDA says it is now considering how to address Puff Bar and a number of other brands that state their products contain synthetic nicotine and therefore don’t fall under the agency’s oversight.
Puff Bar entered the U.S. market in 2019. At the time, it was owned by Cool Clouds Distribution Inc., a California company. In February 2020, to curb youth vaping, the FDA implemented new restrictions barring sweet and fruity flavors in reusable e-cigarettes such as Juul. Those restrictions didn’t apply to disposable devices like Puff Bar.
Puff Bar’s sales took off, according to Nielsen data. Lawmakers and public-health groups, concerned that young people were turning to Puff Bar, asked the FDA to intervene. Cool Clouds sold Puff Bar in early 2020 to the brand’s Chinese manufacturer, DS Technology Licensing LLC, because of FDA scrutiny and criticism that the vaporizers were attracting young people, the Journal earlier reported.
Messrs. Minas and Beltran became officers of Puff Bar in the spring of 2020, as CEO and CFO, respectively, when the brand was controlled by DS Technology, according to the two men and company filings. The young entrepreneurs had owned and run an online e-cigarette retailer called Eliquidstop LLC.
The two have been friends since childhood. Both grew up in middle-class families, Mr. Minas in Burbank, Calif., and Mr. Beltran in Los Angeles’s Glendale neighborhood.
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. They started Eliquidstop when both were still in school.
In May 2020, around the time they started at Puff Bar, they bought a $1.7 million house together in the Glassell Park neighborhood of Los Angeles, public records show. On Instagram, Mr. Beltran has posted photos and videos of himself playing poker with Puff Bar-branded chips, going to nightclubs and driving luxury cars.
Messrs. Beltran and Minas declined to say how they came to hold their positions at Puff Bar. When they joined the company, sales of Puff Bar were soaring. So were Puff Bar counterfeits, according to Mr. Minas, Mr. Beltran and lawsuits filed by Puff Bar.
Mr. Minas said the spring-break ad was intended for adults. He and Mr. Beltran said they never targeted children or teens.
A schism in the summer of 2020 among Puff Bar’s shareholders led to the halt in sales in July and ultimately to a restructuring in which Mr. Minas and Mr. Beltran took full ownership of the brand, the two men said. Other shareholders had wanted to shut down Puff Bar entirely, Mr. Minas said.
“Nick and I still wanted to keep the brand going,” Mr. Beltran said. They declined to disclose details of the transaction, or the date the deal was completed. A lawyer for DS Technology didn’t respond to requests for comment.
After Puff Bar halted its sales in July 2020, counterfeits filled the void, Messrs. Minas and Beltran said. In February of this year, with the two men at the helm, Puff Bar resumed sales, telling customers its devices now contained “tobacco-free nicotine.”
In April, as sales of the new tobacco-free Puff Bars took off, Mr. Beltran posted a photo on Instagram of his new $280,000 Lamborghini Huracán alongside Mr. Minas’s Lamborghini Urus. Mr. Beltran and Mr. Minas said they have other sources of income in addition to Puff Bar.
Puff Bar is the top-selling disposable e-cigarette brand. Its sales totaled $156 million for the year ended Sept. 25 in retail stores tracked by Nielsen, according to Goldman Sachs analyst Bonnie Herzog. Mr. Beltran said he couldn’t say how much of those sales may have been counterfeit products.
In a federal survey released in September, 26% of high-school vapers said they used Puff Bar, which was followed in popularity by Reynolds American Inc.’s Vuse brand with 11%, Smok with 10% and Juul with 6%. Among middle-school e-cigarette users, 30% reported that their usual brand was Puff Bar.
Mr. Beltran and Mr. Minas said they had tried to grow and learn with the industry, and have tried to stay compliant.
“I always tell people, ‘Nothing is better than breathing fresh air’,” Mr. Beltran said. But, he added, “vaping isn’t going anywhere.”
Jennifer Maloney – Wall Street Journal – 2021-10-11.
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