Juul Labs is halting all U.S. advertising of its e-cigarettes and replacing its CEO amid a nationwide backlash against vaping.
largest e-cigarette maker also said Wednesday it won’t fight a sweeping
ban on flavors proposed by the Trump administration to reverse a surge
in underage vaping.
Juul’s CEO will be replaced by a senior
executive from Altria, the maker of Marlboro cigarettes. Altria took a
35% stake in Juul in December at a cost of $13 billion.
shake-up comes amid growing public furor over vaping that has triggered
calls for tighter restrictions at the federal and state levels.
Massachusetts said Tuesday it will ban all vaping products for four
months, the first such step in the country.
E-cigarettes have been
largely unregulated since first arriving in the U.S. in 2007. After
multiple delays, the Food and Drug Administration has set a deadline of
next May for manufacturers to submit their products for review.
makers of e-cigarettes are now fighting to survive as they face two
public health debacles linked to vaping: a mysterious lung illness and
rising use of e-cigarettes by teenagers.
Juul’s new chief, K.C.
Crosthwaite, in a statement, said Juul has long focused on providing
adult smokers with alternatives, but recognized that there’s
“unacceptable levels of youth usage and eroding public confidence in our
Health experts generally consider e-cigarettes less harmful than traditional cigarettes because they don’t contain all the cancer-causing byproducts of burning tobacco. But there’s virtually no long-term research on the health effects of the aerosol produced by vaping. E-cigarettes generally heat a liquid with nicotine to create a vapor.
Public health officials are investigating hundreds of
recent cases of the breathing ailment. Most of the illnesses have
involved vaping THC from marijuana, but officials have not yet
implicated any common product or ingredient.
vaping has reached epidemic levels, according to top government health
officials. In a government survey, more than 1 in 4 high school students
reported using e-cigarettes in the previous month. Federal law bans
sales to those under 18.
Vaping opponents met Juul’s changes with skepticism.
announcement today is aimed at repairing its image and protecting its
profits, not at solving this crisis,” said Matthew Myers, president of
the Campaign for Tobacco-Free Kids. “Policymakers must stand up to Juul
and protect our kids by banning flavored e-cigarettes.”
Wednesday, tobacco giants Altria and Philip Morris International said
they were calling off merger talks a month after first floating a deal
that would have created the world’s largest tobacco company. Altria’s
stake in Juul was considered a key factor in the deal. And a combination
with Philip Morris would have given Juul access to the tobacco
company’s global network and resources.
Juul’s e-cigarettes first
went on sale in 2015 and the company quickly propelled itself to the top
of the market with a combination of high-nicotine pods, dessert and
fruit flavors and viral marketing. Today, the San Francisco company
controls roughly 70% of the U.S. e-cigarette market.
In the last
year, Juul tried to reposition itself as a brand for middle-age smokers
looking to wean themselves off cigarettes. But the FDA warned the
company this month that its product hasn’t yet been approved to help
Juul has tried to head off a crackdown with a series
of voluntary steps, including halting retail sales of several flavors
and shutting down its social media presence. But political pressure has
The company now faces multiple investigations from
Congress, several federal agencies — including the FDA — and state
attorneys general. Earlier this month, President Donald Trump said that
the federal government will act to ban thousands of flavors used in
e-cigarettes because they appeal to underage users.
Crosthwaite, who was Altria’s chief growth officer, replaces Juul’s CEO, Kevin Burns.
must strive to work with regulators, policymakers and other
stakeholders, and earn the trust of the societies in which we operate,”
he said in a statement. “That includes inviting an open dialogue,
listening to others and being responsive to their concerns.”
and Philip Morris said last month that they were in discussions to
become a single company, more than a decade after splitting into two as
Altria has exclusively sold Marlboro cigarettes
and other tobacco brands in the U.S., while Philip Morris has handled
Philip Morris International Inc. CEO André
Calantzopoulos said Wednesday that the companies will instead focus on
launching IQOS in the U.S. IQOS is a heat-not-burn cigarette alternative
made by Philip Morris. Crosthwaite headed the development of IQOS.
Shares of both companies rose in early trading, with Philip Morris’ stock jumping almost 7%.