Among the multiple lawsuits thrown at Juul/Altria, the businesses have been accused of racketeering for reportedly marketing their products directly to youth. Both companies maintain that they have never done such a thing, and insist that their marketing strategies have evolved drastically since the launch of Juul devices on social media. While in another lawsuit, the Federal Trade Commission (FTC) alleged that the two companies had violated antitrust laws.
More recently, Juul agreed to pay $1.7 billion to settle over 5,000 lawsuits by school districts, local governments and individuals, arguing that Juul has helped fuel an alleged teen vaping epidemic.
Due to the 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. As a result of all the lawsuits and the pending PMTAs situation that Juul has faced in the last few years, Altria’s stock had dropped .
To this effect, reported FT, the tobacco company has swapped its minority stake in Juul Labs for intellectual property rights to some of the manufacturer’s heated tobacco prototypes. Altria chief executive, Billy Gifford, said that the move was the “appropriate path forward for our business”.
Investing in a safer vape manufacturer
Meanwhile, Altria MO -0.24% Group Inc. has announced it is will be acquiring NJOY Holdings Inc. for at least $2.75 billion. 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.”