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Altria is reportedly in talks to take a minority stake in Juul


Juul’s popularity has surged over the past year. That attention has attracted regulatory scrutiny. Food and Drug Administration Commissioner Scott Gottlieb has threatened to pull e-cigarettes off the market if the agency’s new restrictions on the sale of fruity flavors don’t slow an “astonishing” surge in teen use.

Meanwhile, cigarette sales have declined as older smokers are dying and fewer young people are starting to smoke. Last year, cigarette smoking in the U.S. fell to its lowest point in recorded history last year, according to data from the Centers for Disease Control and Prevention.

Altria sells its own e-cigarettes, including MarkTen and Green Smoke, though they make up only a fraction of its $25.6 billion in revenue. Juul commands the e-cigarette market, holding about 75 percent of share, according to Nielsen numbers compiled by Wells Fargo analyst Bonnie Herzog.

But parents, teachers and now regulators are demanding Juul stop what the FDA has labeled an “epidemic” of teen e-cigarette use. In response to regulatory pressure, Juul in November said it will halt selling most of its flavored nicotine pods for its e-cigarettes in retail stores.

In October, Altria said it will remove its MarkTen pod-based products and will stop selling all flavors except for menthol or tobacco in its cig-a-like products until the FDA reviews and approves them.

In addition to cracking down on e-cigarettes, the FDA is also pursuing a ban on menthol cigarettes. It could take years to finalize and implement a rule, which tobacco companies are sure to fight, but the possibility has weighed on tobacco stocks.

Read the full Wall Street Journal report here.



source : CNBC

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