Comment: Juul is an American electronic cigarette company which spun off from Pax Labs in 2017. It makes the Juul e-cigarette, which packages nicotine salts from leaf tobacco into one-time use cartridges.
Juul Labs was co-founded by two Stanford students. Its headquarters is in San Francisco. Altria Group (formerly Philip Morris Companies), acquired a 35% stake in Juul Labs for $12.8 billion on December 20, 2018. Juul received a $2 billion bonus to distribute among its 1,500 employees.
The Juul became the most popular e-cigarette in the United States at the end of 2017 and has a market share of 72% as of September 2018. Its widespread use by youth has triggered concern from the public health community and multiple investigations by the U.S. Food and Drug Administration.
The FDA made a huge error by allowing the use of inhaled vaporized often flavored nicotine–without the need to prove safety or efficacy. They were given a five year window to study the results. Now the unintended consequences are unfolding with illness and deaths related to e-cigarettes. Up to 25% of school children in middle and high school have been vaping flavored products. Belatedly regulations and restrictions have been put in place by some states. But do we have a new generation of nicotine addicts who will now switch to smoking?
In the meantime, because of the $2 billion dollar bonus related to Altria’s investment in Juul, the 1500 employees are set to receive $1.3 million each.
WASHINGTON (AP) — Marlboro-maker Altria is taking a big financial hit from its multibillion-dollar bet on e-cigarettes.
The tobacco giant on Thursday slashed the value of its investment in the beleaguered vaping company Juul Labs by a third, dragging down its results to a financial loss for the quarter.
Richmond, Virginia-based Altria bought roughly a third of Juul for $13 billion last December. But executives said they would take a $4.5 billion write-down on the investment amid a growing crackdown on Juul and the vaping industry at large.
Since last year, Juul has been hit by new federal and state investigations into its marketing amid an explosion of underage vaping among teenagers. Separately, an outbreak of lung injuries tied to vaping has led to new government warnings around e-cigarettes. No single product or ingredient has been identified as the root cause.