NACS, the National Convenience and Retail Association, has filed an amicus brief with the U.S. Court of Appeals for the Washington, D.C. Circuit in support of JUUL's application to suspend the U.S. Food and Drug Administration's (FDA) Marketing Denial Order (MDO) embargo.

Last Thursday, the FDA issued an MDO for all JUUL products currently sold in the U.S., a notice requiring JUUL products to be removed from the U.S. market.

"If allowed to go into effect, the order will cause harm to NACS members independent of the harm JUUL described in its suspension application," NACS wrote in the briefing. The order left retailers and distributors with unsellable inventory and unfulfilled contracts, taking a large chunk of their business almost overnight.

NACS believes that the immediate removal of JUUL products would wreak havoc across the industry, disrupt vital economic sectors, endanger countless jobs, and hinder the ability of small businesses to operate.

JUUL accounts for about one-third of the e-cigarette market share, and such a central market player must rely on a huge supply chain to move inventory.

"There is no doubt that this order freezes retail sales of millions of JUULs in inventory. These units will take up retail back-office space and collect dust without dwelling," NACS wrote. “It’s not without cost: JUUL acknowledges that its products are intended to be used immediately after purchase, before taste or quality degrades. Retailers are saddled with the cost of storing this unsellable product and may have to bear the full cost of purchasing these products.

The FDA's MDO also questioned whether certain contractual obligations would be economically viable. Contracts linking manufacturers, distributors and retailers with each other can run for years and cost millions of dollars.

"By effectively banning JUUL products overnight, the order injects confusion into these relationships and leaves the parties uncertain about their rights, duties and obligations," NACS wrote.

By removing JUUL products from the market, retailers and distributors will also suffer from the black market, which will grow rapidly in counterfeit products, NACS said.

"This means fewer customers are buying not just e-cigarettes but other products through the doors of legal stores," NACS wrote. The number of times customers stop at convenience stores, and the secondary purchases they make in addition to their primary purchases during these trips, are fundamental elements of the profitability of these stores.

NACS urges FDA to keep its MDO on JUUL products because it could cause harm to retailers and distributors of JUUL products.

"This damage further changes the balance in favor of staying. There is no good reason to impose uncertainty on NACS members about contractual obligations and unusable inventory, and force them to incur storage costs and lost revenue for a range of products other than e-cigarettes. The consequences are obvious, immediate and ongoing. ’ NACS wrote.

The FDA's decision on JUUL appears to be part of a broader crackdown on tobacco products in the United States.

The FDA said it remains focused on regulating e-cigarettes and other ENDS. So far, the agency has made decisions on about 99 percent of the nearly 6.7 million products received by the September 9, 2020 deadline, including issuing marketing denial orders for more than 1 million ENDS products.

To date, the FDA has authorized 23 ENDS products.

Last week, the Biden administration unveiled plans for potential future regulatory action, including a proposed FDA standard that would determine the maximum nicotine levels in cigarettes and certain other combusted tobacco products.

The FDA recently issued two proposed standards for tobacco products: one bans menthol as a characteristic flavor in cigarettes, and a second prohibits all characteristic flavors, including menthol in cigars.