Worldwide vaping sales are projected to reach $40 billion by 2023, with roughly 1 in every 20 Americans using vaping devices and 1 in 3 vaping daily. While the history of e-cigarettes dates back to 1930, the first commercially successful electronic cigarette is attributed to Hon Lik from Beijing, China, in 2003. Since then, the market has been inundated with new iterations, one of the most notable being Juul.
The history of Juul has many twists and turns, but their future is anything but certain. Juul was once valued at nearly $38 billion and dominated the market, billing itself as a public-health tool. But after three rebrands, many public stumbles, and dozens of bans and investigations, the Silicon Valley darling finds itself in a precarious place.
During a smoke break, Stanford grad students James Monsees and Adam Bowen met and created Ploom, the precursor to Juul. They saw it as the future of smoking - an electronic device that simulated smoking without the harmful effects. By 2015, Monsees and Bowen had sold Ploom and rebranded as Pax Labs, and Juul was born.
Between 2017-2018, Juul was the best-selling e-cigarette, capturing a third of all e-cigarette users. This was attributable to their targeted marketing to youth demographics and their innovative flavor pods. However, the FDA cracked down on e-cigarette makers and launched an investigation into their sales to minors. Some cities and states have banned flavored e-cigarettes, but Juul still makes them available for purchase online.
On December 20, 2018, Marlboro and Parliament cigarette maker, Altria, bought 35% of Juul for $12.8 billion, catapulting Juul’s valuation to $38 billion. With this deal, Altria now owned more combustible-cigarette market share than the next seven brands combined, a clear cause for concern as demonstrated by the US Senate and House of Representatives investigations into their deal.
The deal had a dual purpose. Not only would Altria have been able to jump into the e-cigarette market with an established brand, but the agreement also granted Juul valuable retail shelf space, essentially giving them a near-monopoly with massive benefits to both companies, including market dominance and shared profits. These types of agreements are illegal and often lead to antitrust lawsuits.
In the past few years, Juul has seen its valuation plummet 85% to $1.6 billion, sales halted in China and India, and numerous lawsuits and investigations. They have also gone through tumultuous turnover, including multiple CEOs, CFOs, and cutting 500+ jobs.
The Joseph Saveri Law Firm is Interim Lead Counsel for direct purchaser plaintiffs in e-cigarette antitrust lawsuits against Altria Group, Inc. and Juul Labs, Inc. on behalf of individuals and businesses who purchased Juul e-cigarette devices directly from Juul’s website. Plaintiffs and the class seek damages recovery for Sherman and Clayton Act violations.
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