Juul has sold a 35% stake to Altria for $12.8 billion. Altria is one of the largest tobacco companies in the world. This deal will enable Juul to use Altria’s distribution and sales network, including, placing Juul products next to cigarettes on retail shelves. This partnership with big tobacco comes as a surprise as Juul has promoted itself as a product that helps smokers quit traditional cigarettes.
Juul is a battery-operated device that allows users to inhale vaporized nicotine. It uses nicotine salts that exist in leaf-based tobacco and aims to provide a similar sensation as smoking, minus the smoke and related negative effects. E-cigarettes such as Juul, are commonly marketed as a way to reduce and quit smoking. Each Juul cartridge (called as, JUULpod) contains a similar amount of nicotine as a pack of cigarettes. The Centers for Disease Control and Prevention (CDC) has said that e-cigarettes can benefit adult smokers who are not pregnant, as long as the users completely replace any other tobacco or nicotine products.
However, e-cigarette use has been found to be extremely popular amongst people who have never smoked before, such as among teenagers. Juul’s high-tech design, its resemblance to a flash drive that makes it easy to hide, and the scent of the vapor which can even be passed off as a perfume maybe some of the reasons for its popularity among teenagers. The names of Juul’s flavors such as “fruit” maybe attractive to children.
As per the office of the US Surgeon General, in 2018, 1 in 5 high school students reported using e-cigarettes in the past month. Among other health risks, nicotine exposure from e-cigarettes during young age can cause addiction and harm the developing brain.
The deal still has to obtain antitrust approval. It comes at a time when e-cigarette makes are facing some regulatory challenges. Recently, the FDA has taken action against companies misleading kids with e-liquids that resemble children’s juice boxes, cookies, and candies. E-cigarette companies have also been suspected of targeting underage users with marketing.