Altria Group, the maker of Marlboro cigarettes, is officially poised to purchase a 35 percent stake in Juul Labs, the e-cigarette company that’s upended vaping culture in the U.S., for a whopping $12.8 billion.
The deal catapulted Juul's valuation to an eye-popping $38 billion, even as the three-year-old company fights to regulate underage usage of its products.
It’s a significant shake-up of the cigarette industry and made Juul’s initial investors very rich.
Here are five things to know about Juul:
1. Juul was founded by two former cigarette smokers, Adam Bowen, who currently serves as chief technology officer, and James Monsees, chief product officer. The idea was borne from the lack of alternatives to cigarettes, the company said.
2. It’s the most popular e-cig brand in the U.S.: At the end of 2017, Juul had captured nearly three-fourths of the market share and its sales skyrocketed by more than 600 percent, according to a research letter by the Centers for Disease Control and Prevention. By comparison, cigarette volumes have experienced a year-over-year decline of more than 5 percent in each of the last 4 months, says Juul.
3. As its popularity has grown, so has Juul’s workforce. It employed more than 1,500 people in December, according to The Wall Street Journal, compared to 200 people in September 2017. The company’s job openings include positions in the U.S., Canada, Mexico, France and the U.K.
4. The e-cig technology developed by Juul is billed by the founders as an alternative to tobacco – but critics say the flavored products, such as mango and crème which contain nicotine, are fueling an epidemic as more youths “vape.” The popularity has Federal health regulators, including the FDA and the U.S. Surgeon General, sounding off on the dangers of nicotine addiction.
5. In November, after facing substantial pressure, Juul agreed to take action to curtail youth usage. The company said it would temporarily stop selling its flavored pods for e-cigs in retail stores and take additional steps online to verify customers’ ages.