Reports indicate that Altria is in talks of buying a significant minority stake in Juul Labs, effectively making them part of Big Tobacco
The public debate over the efficacy of vaping is nothing new. In fact, it’s been going on just about as long as modern vaping has been a thing. Supporters of e-cigarettes point to the growing pile of evidence which indicates vaping is at least 95% safer than smoking, while also being the best smoking cessation tool we have. At the same time, critics worry about the impact on kids and if vaping is leading to increased smoking. These concerns have often been met with resistance from vaping companies, who point out harm reduction and smoking cessation is their primary goal.
Unfortunately, it seems that for at least one major vaping company, this will no longer be quite as viable a defense. New reports say that Altria, the owner of Marlboro brand cigarettes, is currently in late-stage talks to purchase a sizeable, but still minority, stake in Juul Labs. That being said, only time will tell if Juul Labs will use this potential new influence to increase their leverage in the fight against tobacco, or succumb to the deepest fears of anti-vapers and become just another cog in the Big Tobacco machine.
Altria’s Reported Purchase
Juul Labs has long touted the fact they’ve become such a success while remaining independent from the massive Big Tobacco industry. According to reports, Juul Labs is currently mulling over how to deal with the increasing pressure and regulations coming from the FDA. They were forced to halt a fundraising effort that reportedly would have valued them over the $20 billion mark for the first time. This was directly related to the current climate of regulatory uncertainty surrounding the vaping industry. Ultimately how the FDA chooses to proceed will have the most tremendous impact on the future of the industry.
This potential move is particularly painful because as recently as April, Juul’s Chief Administrative Officer, Ashley Gould, went on the record to say “we’re not a big tobacco company. We’re an independent company.” At the time, this level of resolve gave confidence to vapers that Juul would remain independent for at least the foreseeable future. Making their apparent shift in perspective all the worse is the significant strides Juul Labs had made over the last year as a harm reduction and smoking cessation company. They pledged millions of dollars to start a non-profit research group, as well as overhauling their internal policies on things such as marketing and parental outreach.
The Underlying Issue
While Juul Labs selling a portion of their stock to a Big Tobacco company is far from the end of the world, it really does set the wrong precedent. The entire vaping industry was built on the idea of helping smokers quit smoking once and for all by giving them a tool that satisfies their cravings without most of the risk. It only becomes a lot harder to legitimately sell yourself as the solution to cigarettes when you’re actively making money off them too. So while the sale in and of itself isn’t shady, the implications it brings are.
The public perception of vaping is already woefully low, even without a direct tie between the largest e-cigarette brand and Big Tobacco. Polls indicate that as little as 13% of adults understand that vaping is much safer than smoking, while around 26% think vaping is just as, if not more dangerous. If Juul Labs does bring Altria into the fold, it will only become much harder to ever gain widespread acceptance as a smoking cessation and harm reduction tool.
It’s important to remember that right now these are just reports that could ultimately fall through or even be entirely false. That being said, if it does come to pass one of two things will likely happen. Either Juul Labs will use their new leverage for the greater good and pressure Altria to be at the forefront of traditional tobacco’s demise, or they will ultimately become just another piece of the system. If Juul Labs has taught us anything over the last five years, it’s that anything is possible if the idea and execution are good enough. So even if Juul does end up partially owned by a Big Tobacco company, I’d bet that they’ll continue to be a force for good, instead of turning to the dark side.
Do you think that Juul Labs will actually sell a stake of their company to Altria? Do you think it will have a significant impact if they do? What’s the best way to spread positive information about vaping? Let us know what you think in the comments, and don’t forget to check back here or join our Facebook and Twitter communities for more news and articles.