After months full of lawsuits and controversy, Altria
Altria has a 35% stake in Juul. It paid $12.8 billion for its stake in the company in December 2018. After several lawsuits were brought against Juul and Americans began contracting lung illnesses from vaping, Altria devalued its investment by $4.5 billion three months ago.
Altria says its most recent charge was due to a growing number of pending legal cases against Juul. The number of cases against Juul has increased by 80% since the end of October.
Chief Executive of Altria Howard Willard said that the company has made progress involving noncombustible platforms with the IQOS e-cigarette and nicotine patches despite its "unexpected challenges". He says that the company will continue to "focus on harm reduction" in 2020.
Altria is the maker of Marlboro cigarettes and bought its stake in Juul in an effort to move away from cigarettes. When they made their investment, Juul was experiencing massive growth and was valued at $38 billion.
Since that investment, there have been two major developments in the vaping market. First, vape users began falling ill. Vaping has caused thousands of Americans to contract lung illnesses, and at least 59 people have died, and in November, the American Medical Association called for a ban on vaping products. The majority of those who have become ill were vaping THC, the psychoactive chemical in marijauna. Juul itself doesn't make any official THC products, but they aren't hard to find on the black market.
The second issue vaping companies are facing is their history of allegedly targeting children with their marketing.
Federal agencies and state attorneys general are coming after Juul for advertising which they say targets children. These suits often site enticing flavors as targeted marketing for young people. For instance, Attorney General for Arizona Mark Brnovich recently sued Juul for "enticing [children] by offering youth-friendly flavors and to hook them on nicotine based on products that were deceptively and unfairly advertised as to their nicotine content."
In response to the suit, Juul said they "remain focused on resetting the vapor category in the U.S. and earning the trust of society by working cooperatively with attorneys general, regulators, public health officials, and other stakeholders to combat underage use and convert adult smokers from combustible cigarettes."
