Has Juul Sold Out to Big Tobacco?

Is vaping the answer?
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Since 2015, e-cigarette manufacturer Juul has billed its products as healthier alternatives to traditional cigarettes for smokers, and as well as tools to help quit smoking. Following a multi-billion-dollar investment by a cigarette manufacturing giant in the company, its critics, who were never convinced by its seemingly altruistic mission, now have even more reason to be suspicious.

According to reports, the $12.8 billion cash investment gave Marlboro manufacturers Altria a 35% stake in Juul. It also means the e-cigarette company is now valued at $38 billion. That said, there is no escaping the fact that the seemingly healthier alternative, which claimed on its website to not want to create new smokers, is now part of Big Tobacco. The term ‘sleeping with the enemy’ comes to the mind of this ex-smoker.

Pardon My Cynicism

Whether they manufacture traditional cigarettes or e-cigarettes, such companies are dependent on addicts for their survival. This is as true of Juul as it is of Altria, and a closer look at both shows that there is more to the deal than meets the eye. Call me cynical, but, after 8 attempts to quit smoking in 11 years, I have every reason to be.

My second-to-last attempt at quitting involved an e-cigarette, and all it did for me was make my smoker’s cough a little worse. The only motivation I had to keep using the device was to be trendy, and that wasn’t motivation enough. I went back to traditional cigarettes until a severe lung infection, a stern warning from my doctor, and a prescription for medication that blocks the brain’s nicotine receptors helped me finally kick the habit.

The big tobacco issue
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Lack of Credibility

The Altria deal wasn’t the only time Juul’s credibility has been shaken recently. Despite an outcry about the high use of e-cigarettes among teenagers by public health forums, government agencies, NPOs, and parents, Juul put profits and growth first.

Its e-liquid pods, which are available in a variety of tempting, fruity flavours, contain a high amount of nicotine. They also contain delightful chemicals such as glycerine and propylene glycol, benzoic acid, and natural and artificial flavours. Did the company reduce the amount of nicotine or try make them less appealing to a younger audience known for its sweet tooth? No. It kept them on the market, right up until the Food and Drug Administration (FDA) raided its headquarters in San Francisco.

Apart from the financial implications (Juul founders James Monsees and Adam Bowen could become billionaires, hedge fund investors could make a fortune, and there are rumours of luscious staff bonuses), the deal will give the company the veneer of credibility, at least in the eyes of the FDA. Altria know what is expected, and is compliant. No doubt its compliance will rub off on the e-cigarette company.

 

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What’s In It For Altria?

Altria could not have been motivated by altruism, so why did it invest so much cash in what was essentially a competitor? Well, now that the manufacturing giant owns a 6-year-limited stake in the e-cigarette company, it isn’t really a competitor anymore.

If Marlboro smokers switch to vaping with Juul’s products, it’s no real loss to Altria. Considering that the tobacco giant tried unsuccessfully to get in on the vaping game a while ago, it seems to be living the old saying that, if you can’t beat them, you join them.

If you need further convincing, consider that Altria also acquired stakes in e-cigarette chain stores Avail Vapor, and in Cronos Group, a company that grows cannabis. Its motivation is clear – whether traditional smoking tobacco, vapour, or weed, Altria has no intention of being anything other than a major player.

Again, call me a cynic, but I do not believe that Juul or Altria care about healthier alternatives or helping smokers quit. The bottom line is that they are businesses, and their shareholders want their share of the profits.