Getty JUUL Labs Inc. Virginia tobacco and menthol flavored vaping e-cigarette products are displayed in a convenience store on June 23, 2022 in El Segundo, California.
Juul lost the vast majority of its net worth during an investigation into its marketing practices, accused of targeting teens in its advertising campaigns for nicotine products. The company’s market value was $450 million at the end of its second quarter in 2022, according to CNBC.
Juul Labs was ordered to pay nearly $440 million to settle the lawsuit following a two-year investigation launched by 33 states, according to NPR. The investigation sought to prove the company was marketing high-nicotine vaping products to teens. The company was blamed for a surge in teen vaping, the news outlet reported.
“Connecticut Attorney General William Tong announced the deal Tuesday on behalf of the states plus Puerto Rico, which joined together in 2020 to probe Juul’s early promotions and claims about the safety and benefits of its technology as a smoking alternative,” NPR reported.
Juul Labs still faces nine separate lawsuits from the remaining states, and hundreds of personal lawsuits filed on behalf of teens and others who say they became addicted to the vaping products marketed by the company, according to NPR.
Here’s what you need to know:
Altria, a Cigarette Maker, Invested $13 Million Into Juul in 2022
Juul to pay $438.5m to resolve US marketing probe
Juul lost 95% of its value in 2022 as U.S. regulators worked toward banning the company’s e-cigarettes, according to CNBC. The news outlet reported July 28, 2022, that the value of Altri’s Juul investment was cut by more than $1.1 billion, setting the new value at $450 as its second quarter came to a close.
Altria, based in Richmond, Virginia and Juul’s largest stakeholder, said it would maintain its investment deal, and agreed not to sell any competing products, according to a company statement quoted by CNBC. The statement said Juul still held value to Altria.
“At this time, we continue to believe that these investment rights are beneficial to us,” the statement said, according to CNBC.
Altria Is Juul’s Largest Investor & Owns a 35% Stake of the Company
Electronic cigarette maker Juul Labs has agreed to pay nearly $440 million to settle a multi-state investigation into its vaping products, which have long been blamed for sparking a national surge in teen vaping. t.co/PmJW0P01QE
Altria, based in Richmond, Virginia, is Juul’s largest investor with a 35% stake, according to CNBC. Altria made its agreement with Juul Labs in 2018.
“Altria executives signed the $12.8-billion pact in 2018, betting that Juul’s popular vaping devices presented a lucrative alternative to tobacco products,” CNBC reported.
The U.S. Food and Drug Administration announced its plans in June 2022 to ban small cartridge-based e-cigarettes, saying Juul failed to disclose that its nicotine products contained chemicals that were potentially harmful.
“The decision surprised industry observers and experts given that the FDA has authorized several competing e-cigarettes and Juul spent years gathering data to support its application,” CNBC reported.
But Juul was able to continue selling its products because the FDA reopened its review of Juul’s application in July after a federal court ruled the ban could not immediately take effect. The FDA’s decision regarding Juul is just one part of its review of all e-cigarettes, investigating claims regarding the ability to help smokers reduce or quit their smoking habits.
Juul had a revenue exceeding $1 billion in 2018 and captured more than 70% of the U.S. nicotine vape market, according to Forbes.
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Juul’s Net Worth Plummeted Following Altria Deal