Update on July 16, 2024, at 7:56 p.m.
Philip Morris International Inc.'s press conference Tuesday about plans to open a manufacturing facility in Aurora to make nicotine pouches spotlights a divide between economic growth and public health.
Gov. Jared Polis and Aurora Mayor Mike Coffman described the announcement as good news for jobs and the economy, infusing hundreds of direct jobs and what the company described as more than half a billion dollars of economic impact.
“We are really excited to help make Colorado the very best state to do business in,” Polis said at the press event, held under a white tent with dozens of people, including elected officials, representatives from the company and other business leaders.
“What an extraordinary day for the city of Aurora,” said Coffman, who recalled getting a phone call about a year ago about the possibility of the move. “This project will generate millions of dollars in tax revenue annually to our city, county and state.”
“This project marks a significant milestone in Philip Morris International's vision for a smoke-free future,” said Philip Morris Americas President and U.S. CEO Stacey Kennedy. In recent years, major tobacco companies have worked to develop and promote alternative nicotine products to traditional ones like cigarettes.
The tobacco company — called PMI — said the facility is expected to create 500 direct jobs with an ongoing annual economic impact of $550 million in Colorado as it produces Swedish Match Zyn nicotine pouches, one of the fastest-growing nicotine products in the U.S. It’s a smokeless nicotine pouch that users place between their lips and gums.
A subsidiary of PMI said the plan is to start construction of the facility this year, with initial operations starting by the end of 2025 and fully producing in 2026. It said the construction phase of the project is expected to create nearly 5,000 jobs, for positions such as engineers, production staff, technicians and quality control.
Economic impacts and incentives
The Colorado Economic Development Commission approved up to $4,553,743 in Job Growth Incentive Tax Credits for PMI over an eight-year period for the creation of up to 500 net new jobs, according to a spokesperson with the state’s Office of Economic Development and International Trade. She said the performance-based incentives are issued in arrears and contingent upon the company meeting salary requirements.
Polis said when businesses like PMI are looking at their site decisions, they take into account several factors.
“Certainly on logistics, we're well situated on supply routes, whether it's rail truck or air Colorado, the center of the country well suited for advanced manufacturing,” he said. “But beyond that, they often look at workforce and the cost of doing business, and we have deep commitments to both.”
“This is not just a financial commitment, but it's really a testament to our belief, our belief in our powerful mission and our belief in our scientifically substantiated products,” said Kennedy. “But it's also a testament to the potential of this community and the state of Colorado. These 500 jobs are good jobs. They're jobs that support families with an average annual salary of around $90,000. And the best news is we start recruiting today.”
Public health advocates stunned
The news left some public health advocates aghast that government entities would incentivize a new manufacturing plant from this specific company, whose controversial history dates back decades.
PMI has long made one of the most iconic tobacco products of all time, Marlboro cigarettes, and is one of the giant multinational companies long known as Big Tobacco, selling nicotine products that can make people sick. On its website, the CDC notes: “Smoking tobacco products (including cigarettes and cigars) causes almost 9 of every 10 cases of lung cancer. But tobacco use can cause cancer almost anywhere in your body,” listing more than a dozen other locations, like liver, kidney and colon.
"These are merchants of death and disease,” said Jodi Radke, regional director of the Campaign for Tobacco-Free Kids, a nonprofit group based in Washington, D.C., which advocates for reducing tobacco consumption. "This is Philip Morris International, who has the world's best-selling cigarette internationally. And we are trusting the message that they're delivering when they've done nothing for decades but deceive and addict our children.”
“It's really offensive and it's more offensive that our state and our elected officials would incentivize them to be located here,” said.
Polis points to nicotine laws
Polis responded to the criticism in a statement released Tuesday evening.
“Colorado is the best state to do business in, and as long as it is legal, from marijuana to nicotine pouches to liquor to mushrooms, we are proud to have good jobs here rather than in other states,” said the governor’s spokesperson Shelby Weiman via email. “Informed adults make their own life choices, and the governor strongly agrees that tobacco products should stay out of the hands of children and has signed several laws to crack down on illegal nicotine sales.”
She noted that included laws requiring the registration of tobacco shops, raising the age of purchase for nicotine products from 18 to 21, requiring these products be sold farther away from schools, and other measures to reduce youth usage.
“The governor is also excited about the harm reduction and lives that can be saved by moving smokers over to safer nicotine pouches, improving public health,” she said. “This investment will bring 500 new, good-paying jobs to Aurora to help Coloradans support themselves and their families.”
She noted Colorado spends more than two billion dollars a year on health care costs directly caused by smoking, about $775 a household, including $415 million in Medicaid costs.
About one in 10 Colorado adults smoke and around 9 percent of high school students use e-cigarettes, according to the latest data. Communities of color have been aggressively marketing to the industry and in general more people of color smoke, according to state data.
The state actively promotes tobacco cessation and prevention, through Tobacco Free CO.
Next generation of nicotine products
PMI has been a lightning rod for decades over its role in getting people hooked on the highly addictive chemical compound nicotine — found in cigarettes, vapes, chewing tobacco and Zyn pouches.
The pouches, which basically flavored nicotine in a tea bag of sorts, have become increasingly popular, with Zyn’s sales growing rapidly in 2022, and its sales rising by 100 million pouches (a nearly 60 percent hike) in just a few months in late 2021 and early 2022. That’s according to a published analysis of the sales from four big brands.
The safety of the product is unclear.
Colorado has wrestled mightily with the advent of next-generation tobacco products, like e-cigarettes and vaping, and at one point led the nation in youth vaping.
The company Juul helped spark the explosive growth of vaping. Just last week, Colorado Attorney General Phil Weiser announced that dozens of schools, governmental entities and non-profits will get more than $17 million in new funding to combat the youth vaping crisis, money coming from a nearly $32 million legal settlement with e-cigarette manufacturer Juul.
In an investigation, the state found Juul targeted “cool kids” in ads and social media campaigns, hired “brand ambassadors” to hand out free samples to young people at convenience stores in the state and hired social media influencers to promote the products as a way to introduce young people to e-cigarettes.
Public health advocates see the Zyn marketing strategy as pulling directly from the Juul playbook – a Juul 2.0, with Zyn becoming a hot topic on social media sites popular with young people, like TikTok.
“I'm disappointed and angry,” said Radke. She cited concerns over Zyn as a popular product with young people and a potential on-ramp for the use of other tobacco and nicotine products, including cigarettes and vaping products.
“This is the same industry up to its old tricks,” she said. “They know they have to get kids to try these.”
Optics of Aurora announcement
Dr. Carolyn Dresler, a retired thoracic surgical oncologist specializing in lung cancer, questioned the location of a nicotine facility in the same city as the state’s medical school.
“My heading is just swirling," said Dresler, who continues to work at state, national and international levels on tobacco prevention.
The announcement of the new facility, which is expected to begin limited production by the end of 2025, was held less than 5 miles from the state’s largest medical campus, CU Anshutz, which is home to University Hospital, Children’s Hospital Colorado, the VA hospital, Colorado School of Public Health and the University of Colorado School of Medicine.
"I am all for people using less deadly products than cigarettes to quit smoking, but that is not what the problem is here,” Dresler said. “It is addicting a whole new group of youth to high doses of nicotine."
Some Aurora residents had the same reservations.
"It is at once extraordinary and befuddling to think that the city I've called home for nearly 30 years, is leading with the ‘economic opportunity’ building a Zyn manufacturing facility in Aurora provides. Flavored nicotine, no matter the delivery system (tobacco, vape or pouch), poses a health risk. I am aggrieved by this news," said Leanne D. Wheeler of the Wheeler Advisory Group, LLC, an Air Force veteran and Aurora resident who has spoken out on the impact of tobacco on health.
Others said any expansion of manufacture and marketing of products that are proven to cause addiction in adults and teens is not a reason to celebrate.
“The warning signs are all here. In the “nicotine pouch” market, we’re seeing many of the same emerging trends that preceded Juul driving the e-cigarette epidemic: a concentrated, highly flavored product, an expanding use of social media to market to young users, a dramatic uptick in sales, and data showing increased use among young people,” said Nick Torres, Director of Advocacy for the American Lung Association in Colorado.
He noted that according to the US Surgeon General, youth use of products containing nicotine in any form is unsafe.
PMI: We protect youth
The company adamantly denied targeting kids for sales of its products, saying they’re meant just for adults who already use nicotine.
“We certainly respect that Coloradans are very focused on public health, as are we. Our mission is really to improve public health,” said PMI CEO Kennedy, in an interview after the event.
She said PMI has a “robust set of marketing practices to make sure that we are protecting youth in every step that we take.”
PMI doesn’t work with social media influencers, like those that helped fuel the dramatic growth of Juul, she said. She said it monitors social media closely, which she said should make sure products like Zyn are portrayed responsibly on its platforms.
“We call out inappropriate content to social media companies and we ask them to take that down,” when PMI identifies it, she said.
When asked by CPR News if Zyn is addictive, Kennedy said, “Zyn is, nicotine is a product, of course, but the most harmful form of nicotine consumption is smoking. And that is what causes the vast majority of harm. Nicotine is not the primary cause of smoking-related diseases.”
Kennedy said Zyn is not proving to be a gateway for young people to take up other things, like cigarettes or vaping. said. “That's just not happening,” she said.
Industry money plays a role in Colorado
Nicotine pouches like Zyn are so new that there is no data about their use among young people in Colorado in the Healthy Kids Colorado Survey, which is conducted every other year and was last completed in 2023.
News of the plans for a nicotine manufacturing facility is the latest highlighting the state’s complicated relationship with the tobacco industry.
For example, Colorado voters in 2020 approved raising hundreds of millions of dollars to establish a new universal pre-K program, which currently enrolls more than 40,000 kids. The money comes from taxes on cigarettes, vapes and other tobacco and nicotine products.
State lawmakers later considered but defeated a controversial, heavily lobbied bill to ban flavored tobacco, a proposal which aimed to reduce youth vaping, but would have drained funds for the pre-k program. That program is a top priority of the governor.
Colorado views itself as one of the nation's healthiest states, but roughly 5,000 Colorado adults die from smoking-related illnesses each year. The state spends more than $2 billion a year on health care costs for illnesses caused by smoking.
Cigarette smoking is the leading cause of preventable death and disability in the U.S. according to the CDC.
Editor's note: This article was updated with additional information and comment.
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