As a result of a 2018 deal which gave Altria a 35% stake in Juul, the tobacco company has not been able to conduct any business with any other vape brand if not through Juul. Given the pending PMTAs situation and the numerous lawsuits the vape manufacturer has faced in the last few months, Altria’s stock had dropped substantially. To this effect, a few months back the tobacco company ended its agreement with Juul, giving it the option to buy another e-cigarette brand or develop its own vaping products.
NJOY is a safer bet than Juul, as last May the FDA granted NJOY LLC marketing permits to for its Ace closed vape device and three accompanying tobacco-flavoured pods. This authorization allows these products to be legally marketed across the US, even though this does not mean that these products are safe or “FDA approved.”
Subsequently, Altria MO -0.24% Group Inc. is in advanced talks to buy NJOY Holdings Inc. for at least $2.75 billion, as it plans how to divest its stake in Juul Labs Inc., according to people familiar with the matter.
Breaking into the nicotine alternatives market
As tobacco companies do their best to push into the alternatives’ market, their main challenge remains gaining credibility. “We know that cigarettes are dangerous and addictive,” said William F. “Billy” Gifford, Altria’s chief executive officer, in a speech to the Richmond Association for Business Economics recently. “And we know that the No. 1 expectation that society has for us as a company is to reduce the harm associated with cigarettes.”
Gifford, who became CEO of Altria in April 2020 after previously serving as vice chairman and chief financial officer and working the company in various leadership roles, added that it therefore makes sense that the company would focus on safer alternatives. “So for those adult smokers who can’t or won’t quit, it makes sense that we focus our resources on moving beyond smoking.”
Read Further: Newsroom