Summary
According to the WSJ, Altria is in talks to buy a stake in Juul.
The recent address by FDA commissioner Gottlieb has caused upheaval for both the tobacco companies and the successful e-cigarette startu.
Buying into Juul makes strategic sense for Altria, taking away one potential threat while dealing with the threat of menthol regulation.
According to the Wall Street Journal, Altria (MO) is in talks to buy a significant minority stake in e-cigarette leader Juul. News of these talks comes during a tumultuous period for both the conventional tobacco companies and the e-cigarette startup. After all, it has been only a few weeks since FDA commissioner Scott Gottlieb announced increased regulatory measures aimed at mitigating the ‘epidemic use of electronic cigarettes and nicotine addiction among kids’.
The enormous increase in the use of electronic cigarettes in the US has been largely attributed to the exploding popularity of the Juul device, which has been referred to as ‘the iPhone of e-cigarettes’ due to its sleek design and the fact that it charges like a flash drive. Next to its technological credentials, the Juul also owes some of its success to the range of flavors it offers, of which mango and mint have shown particular appeal to young consumers.
