In recent months, mystery has surrounded the ownership of a controversial e-cigarette company that has reaped millions of dollars in sales of flavored, kid-friendly nicotine products by exploiting a loophole in federal regulations.
The company, Puff Bar, has even reveled in the mystery, saying on its website, "But who makes Puff Bar? Everyone wants to know the mastermind team behind the latest craze in the world of electronic cigarettes." Indeed, lawmakers and numerous public health advocates have sought answers to this question with no luck.
But this week, a corporate filing in California has provided a glimpse of those involved with the company.
In a document filed with the California Secretary of State, Nick Minas and Patrick Beltran listed themselves as CEO and CFO of Puff Bar, a leading marketer of disposable vape products. Minas and Beltran, friends from high school, are both in their 20s, but despite their youth have had checkered careers as entrepreneurs — including being targeted by regulators and, by their own admission, banned by online retailers over dubious e-cigarette sales.
Before now, the trail led only to an official Puff Bar mailing address — a single-family home in the North Hollywood area of Los Angeles. According to public records, the home belongs to Minas' mother, Elsie Alfaro. Asked why Puff Bar's mailing address was at her home, Alfaro said, "I don't know anything about that."
In a phone interview, Minas and Beltran said despite their lofty titles, they merely operate the Puff Bar website, and refused to say who hired them to do it. They also claimed they didn't know who was behind another company that owns trademarks for Puff Bar products.
"I know as much as you do," Minas said.
Established in 2019, Puff Bar sells small, brightly colored e-cigarettes that typically contain a small internal battery, and cotton soaked with nicotine and a flavoring substance. Puff Bar's e-cigarettes—sometimes called vape pens for their streamlined appearance—look similar to the devices first popularized several years ago by Juul, the e-cigarette giant part-owned by top cigarette maker Altria Group. But unlike Juul, which makes reusable vape pens, Puff Bar exclusively sells disposable e-cigarettes, usually good for several hundred puffs, according to its website.
Puff Bar products come in fruit flavors such as "Banana Ice," "Mango," and "Pineapple Lemonade." The company and a handful of competitors currently enjoy a monopoly on flavored e-cigarettes, thanks to a flavor ban implemented in January by the Food and Drug Administration that exempted disposable devices. Puff Bar has profited handsomely from this loophole: In June, the New York Times reported that Puff Bar sales had been over $3 million a week since April, with purchases of over 300,000 sticks per week.
Puff Bar's growing popularity has drawn the ire of public health and anti-smoking groups, who are upset with the company and with the FDA for exempting disposable vape products from its flavors ban. Rep. Raja Krishnamoorthi, an Illinois Democrat, recently demanded that the FDA ban Puff Bar sales on grounds that the company is targeting children.
"You owe it to the public health to act now, particularly in light of evidence demonstrating how e-cigarettes lead to worse outcomes for coronavirus patients," wrote Krishnamoorthi, who chairs the House subcommittee on economic and consumer policy. In a statement to FairWarning, Krishnamoorthi said the FDA has not responded to two letters and that, "It should be a no-brainer to pull Puff Bar from the market."
Krishnamoorthi's letter echoed concerns raised by the national organization Parents Against Vaping E-Cigarettes. In May, the group urged the FDA to punish Puff Bar for using ads that allegedly targeted children.
Beltran said Puff Bar wants to sell only to adult consumers. He also said that Puff Bar's website uses a database that checks ages to avoid selling to minors.
In January, when the FDA announced its partial ban on flavors, it said it had exempted products it believed were less appealing to children and young adults, including disposable e-cigarettes. Critics attacked the decision as a concession by the Trump administration to vape shops and convenience stores, which do a lucrative business in e-cigarettes.
But in an email to FairWarning, the FDA said it would take action against any e-cigarette product targeted to youths. A spokeswoman refused to say if the agency is taking any action against Puff Bar. In response, she emailed a link to its compliance and enforcement database. A search for Puff Bar turned up no warning letters, inspections, penalties or complaints. Beltran and Minas said Puff Bar hasn't been contacted by the FDA.
Krishnamoorthi also asked the FDA for information about Puff Bar's owners — something public health advocates have been seeking, too.
"They're a very mysterious company," said Mark Gottlieb, executive director of the Public Health Advocacy Institute, a Boston-based nonprofit. On July 1, the institute sued Puff Bar and its main distributor, Cool Clouds Distribution, Inc., for allegedly marketing and selling e-cigarettes to kids in Massachusetts. In its complaint, the Institute blamedflavored e-cigarettes, in particular, for reversing the years-long trend of declining nicotine use among youth. Beltran and Minas said they were unaware of the lawsuit.
Puff Bar's new corporate filing may clear up some questions about the company's stakeholders. Before registering as officers with Puff Bar, Minas and Beltran co-founded and ran a company based in Glendale, California, called eliquidstop.com, which sells the liquid — commonly called juice — used in vape pens, as well as disposable vape products. Minas' mother's home in North Hollywood is also listed as the mailing address for another disposable e-cigarette company called Rillo Labs LLC, which was established earlier this year by a Los Angeles man also involved in the vape business named Clifford Tjing.
Aside from these filings, there's little public information about Minas or Beltran. On Instagram, Minas calls himself a "Friend Collector" and "Nice Guy in Training." Beltran calls himself a comedian. But a podcast recorded by a friend in late 2018 revealed some details about their background.
Minas described his first business, which was more of an inventive scam: he would rent video games from a local store, then use a computer lab at his middle school to replicate the games' designs on blank CDS. He would then return the blank CDs to the store and sell the games to his friends.
Minas also purchased e-cigarettes from a distributor and sold them on Amazon. The business, which began out of his mother's garage, quickly took off. By the end of his first month, Minas said, he had cleared about $98,000 in sales.
Banned for life
But the burgeoning business ran into problems. Minas said Amazon banned him for life as a seller after he received numerous customer complaints for failing to complete orders, which he said was due to production delays from the Chinese New Year. Minas said he was also banned from a credit union in Burbank, California, after it complained that he was running his business through a personal account. After he and Beltran began selling e-liquid they were repeatedly threatened with bans by eBay for violating the platform's rule against selling tobacco products.
Faced with restrictions on e-commerce websites, Minas and Beltran created eliquidstop.com to sell e-liquid.According to the podcast, they founded the website in 2017 and by late 2018 had raked in about $2 million in sales.
During the podcast, the host quoted Minas as once telling him, "Look man, I don't care if I'm selling diapers, vapes… pool supplies — whatever — if there's money to be made, I'm there." To which Minas added, "dildos."
Speaking with FairWarning, Minas chalked up his earlier rule-bending ventures to being young and trying to make money. "I'm not ashamed of any of it," Minas said. "There are plenty of people at large companies that didn't come from the most kosher backgrounds."
Minas and Beltran ran afoul of New York City authorities in October 2019 when the city sued eliquidstop.com — along with other vendors — for allegedly selling e-cigarette products to minors. The suit claimed that the company was "particularly egregious," given that it had been reported to the Better Business Bureau for selling vaping products to a 14-year-old. The suit also cited products like "Cloud Nurdz" and "Unicorn Treats," as well as social media ads, that appeared to be targeting young users. The company settled the suit in May and agreed to not ship e-cigarette products to customers in New York City without first verifying that they are over the age of 21. Beltran blamed the lawsuit on eliquidstop's age verification system failing to keep up with changes in New York City's rules.
The FDA sent eliquidstop and Minas a warning letter on April 13 for illegally selling several e-cigarette products. Minas said that at the time the company was no longer selling the offending products but had failed to remove the listings from the eliquidstop website. They are not on the website now.
As for Puff Bar, it's unclear who is really in control. It appears to be entangled with many other companies in the U.S. and China.
Robert Jackler, a Stanford University medical professor and co-founder of a program called Stanford Research into the Impact of Tobacco Advertising, said that unlike Juul and other vape brands, he believes Puff Bar is essentially the creation of a Chinese company.
According to Jackler's research team, the first trademark application for a Puff Bar product was made by a Chinese company, Shenzhen Daosen Steam Technology Co., Ltd., on July 1, 2019 — a month before the first trademark was applied for in the U.S. by Cool Clouds Distribution. Over the next year, the Shenzhen company, also known as DS Vaping, filed for numerous other trademarks for Puff Bar products in China.
Jackler said many of the producers of Puff Bar's products are concentrated in Shenzhen, China. According to a research packet put together by Jackler's team, these manufacturers produce similar — "if not identical" — products with the same packaging. Many also produce identical flavors marketed by Puff Bar.
"You'll see that many of the disposables are identical — they're the same product," Jackler said.
Until recently, Cool Clouds, based in LA, was a main distributor for Puff Bar, as first reported by Bloomberg, and also owned numerous federal trademarks for Puff Bar products. In February, Cool Clouds' owner, Umais Abubaker, informed a reporter the company was ceasing distribution of Puff Bar products in the U.S.
That same month, a newly formed Delaware corporation, DS Technology Licensing LLC, began registering trademarks for Puff Bar products. In May, DS Technology filed a $75 million lawsuit against over 30 American and Chinese vendors for allegedly importing and selling knock-off Puff Bar products.
Cool Clouds and DS Technology appear to be connected. Todd Gallinger, a Long Beach-based attorney, has filed for trademarks on behalf of both companies. Gallinger, who also filed DS Technology's lawsuit, did not respond to requests for comment.
FairWarning was unable to reach Abubaker of Cool Clouds despite several attempts, including emailing questions to Gallinger, and visiting the company's headquarters in Los Angeles' Skid Row, now home to a new store.
Abubaker and his wife, who co-founded a CBD beverage company, possess three expensive homes near the tony Melrose Avenue shopping district, according to public records. On Instagram, Abubaker routinely posts photos and videos of luxury vehicles. In March, Abubaker posted images of a Pagani Huayra — a vehicle with a multimillion-dollar price tag.