Altria board approves $13 billion investment in e-cigarette company Juul
Altria's board of directors has approved its $12.8 billion investment in leading e-cigarette manufacturer Juul, with a formal announcement planned for Thursday before market open, people familiar with the matter told CNBC. Juul's board is meeting to consider the deal.
Tobacco giant Altria will invest $12.8 billion for a 35 percent stake in Juul, which values the e-cigarette company at $38 billion, the people said. The deal combines the maker of the best-selling cigarette with the best-selling e-cigarette and comes as both companies are under pressure.
The deal marks a turning point for Juul. The company has positioned itself as anti-tobacco, with a mission to help to wean adults off combustible cigarettes, which are responsible for killing about half a million Americans every year. With this deal, though, it will be partly owned by one of the world's biggest tobacco giants.
As such, Juul stipulated a number of conditions to help ensure the Altria deal furthers its goals. As part of the agreement, Altria would add Juul coupons to Marlboro and other cigarette packs and give Juul some of its prime shelf space, the people familiar said.
Also at NYT, Reuters, and The Verge.
See also: Marlboro maker Altria nears deal to take 35 percent stake in leading e-cigarette company Juul, sources say
$1.3 million: the average bonus Juul employees get after a deal with a cigarette maker
[$38 billion] makes Juul Labs Inc. more valuable than Airbnb and Elon Musk's SpaceX, according to Bloomberg News.
Previously: E-Cig Maker Juul Valued at $15-16 Billion
FDA Raided E-Cigarette Maker Juul to Look for Evidence That the Company Targets Minors
Juul Boosts Lobbying Spending as Potential E-Cigarette Regulations Loom
Marlboro Owner Invests $1.8 Billion in Cannabis Company
Related Stories
E-cig startup Juul plans to go global by raising $1.2 billion
"Juuling" might be a thing around the world in the future, because the e-cig-maker has big plans to go global. According to Bloomberg, Juul is raising $1.2 billion in a financing round, which would put the startup's value at a whopping $15 or $16 billion. If you need something to compare that to, Lyft recently reached a $15 billion valuation after raising $600 million. The publication says the company is hoping to use the money it raises from investors to make its USB vape pens available outside the US and Israel. Currently, if you want to buy its trendy pens and nicotine pods outside those two countries, you'd have to find resellers.
Does this story make you want to sell drugs flavored water to children?
Related: Tobacco Roundup (U.S. to Crack Down on Tobacco, Electronic Cigarettes)
F.D.A. Seizes Documents From Juul Headquarters
The Food and Drug Administration conducted a surprise inspection of the headquarters of the e-cigarette maker Juul Labs last Friday, carting away more than a thousand documents it said were related to the company's sales and marketing practices.
The move, announced on Tuesday, was seen as an attempt to ratchet up pressure on the company, which controls 72 percent of the e-cigarette market in the United States and whose products have become popular in high schools. The F.D.A. said it was particularly interested in whether Juul deliberately targeted minors as consumers.
"The new and highly disturbing data we have on youth use demonstrates plainly that e-cigarettes are creating an epidemic of regular nicotine use among teens," the F.D.A. said in a statement. "It is vital that we take action to understand and address the particular appeal of, and ease of access to, these products among kids."
Previously: Tobacco Roundup (U.S. to Crack Down on Tobacco, Electronic Cigarettes)
E-Cig Maker Juul Valued at $15-16 Billion
E-cigarette maker Juul boosts lobbying spending as regulatory scrutiny increases
Leading e-cigarette manufacturer Juul spent half a million dollars on lobbying last quarter — up 167 percent from the previous quarter — as regulators weigh restrictions on the industry to stem a surge in teens using the devices.
In the third quarter, Juul spent $560,000, according to a lobbying disclosure form. That compares with the $210,000 it spent in the previous quarter, according to a filing. The company focused its efforts on e-cigarette and vaping regulation, as well as tariffs on products manufactured in China, it said in the disclosure.
However, the $560,000 is half of the amount the company initially reported spending Tuesday. The company filed an amendment correcting the figure, Juul spokeswoman Victoria Davis told CNBC.
Juul has beefed up its Washington operations amid growing scrutiny that could threaten its business. It has hired Tevi Troy, deputy Health and Human Services secretary in the George W. Bush administration; Jim Esquea, an assistant HHS secretary in the Obama administration; and Ted McCann, a senior policy advisor to House Speaker Paul Ryan, among others.
Also at The Hill.
See also: Juul e-cigarettes pose addiction risk for young users
JUUL's social media campaign resonates alarmingly with teens
Weed Vaping Startup Pax Raises $20 Million
Juul Season is Over
Previously: E-Cig Maker Juul Valued at $15-16 Billion
FDA Raided E-Cigarette Maker Juul to Look for Evidence That the Company Targets Minors
Marlboro owner Altria invests $1.8 billion in cannabis company Cronos
Altria hopes pot is the key to help it grow beyond its stagnant cigarette business. Tobacco giant Altira is investing $1.8 billion in Canadian cannabis company Cronos Group. That will give Altria a 45% stake in the company, with an option for Altria to increase its stake to 55% over the next five years. Reports of an Altria-Cronos deal first surfaced earlier this week. The decision by Altria to go ahead with an investment in Cronos shows that Altria is serious about investing in marijuana as a new growth area as sales of traditional cigarettes slow. Altria's stock has fallen nearly 25% this year and the company is expected to report revenue growth of only about 1% this year and in 2019.
[...] Cronos and other cannabis stocks have been thrust into the spotlight in the past few months following the legalization of recreational marijuana in Canada in October, as well as legalized recreational and medical pot in several US states last month. With Democrats winning control of the US House, Congress may finally pass the Farm Bill, which would make it legal to produce hemp and potentially open the door for more products containing cannabidiol, or CBD. Many alcoholic beverage, tobacco and other consumer products companies may want to bet on cannabis. Canadian marijuana company Canopy Growth (CGC) already has received a multibillion dollar investment from Corona owner Constellation Brands (STZ). Coca-Cola (KO) was rumored to be considering an investment in Canadian cannabis company Aurora (ACB). [...] Coke's archrival Pepsi (PEP) hasn't completely ruled out a move into cannabis.
Altria's Canadian Pot Bet Is Really About the U.S.
It's official: Big Tobacco is now a player in the cannabis market. That will change the game.
Previously: Another Major Beermaker is Looking at Ways to Enter the Cannabis Business
Coca-Cola Is Eyeing the Cannabis Market
Peter Thiel's Cannabis Company Was Briefly Worth More Than Twitter
Cannabis Becomes Legal in Canada
(Score: 0) by Anonymous Coward on Friday December 21 2018, @09:10PM (1 child)
HAHAHAHAHAHAHAHAAHAHAHA
Let's see how long that lasts in the real world :)
(Score: 2) by darkfeline on Saturday December 22 2018, @06:34AM
Of course they are anti-tobacco, their product is in direct competition with it. Tobacco != nicotine.
Join the SDF Public Access UNIX System today!
(Score: 2) by JoeMerchant on Friday December 21 2018, @09:46PM (2 children)
I think the banks have it backwards...
https://www.marketwatch.com/story/altrias-credit-cut-2-notches-at-sp-as-a-result-of-juul-cronos-investments-2018-12-20 [marketwatch.com]
Україна досі не є частиною Росії Слава Україні🌻 https://news.stanford.edu/2023/02/17/will-russia-ukraine-war-end
(Score: 2) by takyon on Friday December 21 2018, @10:03PM (1 child)
Cannabis is arguably the less risky investment. The feds could try to extract a multibillion dollar settlement out of Juul for marketing to kids and whatnot.
[SIG] 10/28/2017: Soylent Upgrade v14 [soylentnews.org]
(Score: 2) by JoeMerchant on Saturday December 22 2018, @01:49AM
Actually, the banks' point is that Altria has leveraged themselves excessively to make these purchases and they're not likely to un-leverage themselves in the next 6-12 months, and that's a fair point. However, in the long run, even with a $2B (more likely $20M) settlement from Juul for marketing to kids, Altria stands to profit hugely from the changing times:
https://www.citizen-times.com/story/news/local/2018/12/21/trump-signs-farm-bill-making-cbd-and-hemp-federally-legal/2385540002/ [citizen-times.com]
Україна досі не є частиною Росії Слава Україні🌻 https://news.stanford.edu/2023/02/17/will-russia-ukraine-war-end
(Score: 0) by Anonymous Coward on Friday December 21 2018, @10:05PM (10 children)
Just after Surgeon General called vaping an epidemic [npr.org]. It's like saying stocks gonna rise like rockets.
(Score: 2) by takyon on Friday December 21 2018, @10:23PM (9 children)
Let's not forget that the FDA raided Juul... in October.
Does the U.S. government have a case against Juul? Perhaps not. But this is still a bold move on Altria's part. Maybe too bold.
And what are they getting for their $12.8 billion? Access to a brand name. Juul has a high market share, but any large company could create a clone of it. Effective marketing may be difficult since there is a lot more scrutiny of the industry, but it can be done.
The FDA has stopped short of wrecking the market [nytimes.com], but Juul is voluntarily pulling its flavors off the shelves. Is it going to remain popular with kids? We'll see.
[SIG] 10/28/2017: Soylent Upgrade v14 [soylentnews.org]
(Score: 2) by edIII on Saturday December 22 2018, @02:18AM (8 children)
One of my biggest concerns, and why I vape marijuana only when I need discretion, are the possible health effects. I've heard of medical doctors talking about "popcorn lung" as a side effect. That and dabbing, can be extremely dangerous if you don't take the temperature down.
If they identify some horrible disease as a result of this, it's the same crap with cigarettes all over again. I'm not convinced it's safe, just perhaps safer than smoking filtered cigs. That, and certainly more preferable out of doors.
Technically, lunchtime is at any moment. It's just a wave function.
(Score: 2) by takyon on Saturday December 22 2018, @02:34AM (3 children)
Have you considered using edibles?
[SIG] 10/28/2017: Soylent Upgrade v14 [soylentnews.org]
(Score: 2) by edIII on Saturday December 22 2018, @02:58AM (2 children)
*wipes crumbs from face* They make those? ;)
Sometimes they're too strong for going out and about. Seems easier to control with a vape pen, whereas an edible is more like a roller coaster. Once you leave the station you're going for the ride no matter what.
Technically, lunchtime is at any moment. It's just a wave function.
(Score: 2) by takyon on Saturday December 22 2018, @04:10AM (1 child)
I'm not too knowledgeable about it, so one of the soystoners will need to pitch in. But I imagine that if a product is well labeled, it will tell you almost exactly how much THC and CBD it contains. This should be mixed into stuff like butter or chocolate that gets evenly mixed throughout the entire product, so that if you cut it in half with a knife, or break a square off, you are getting a reasonably accurate fraction of the contents. Then all you need to know is how much it takes for you to feel a certain effect, which should be achievable with some (enjoyable) trial and error over a week or two.
Furthermore, if it's about taking it in gradually rather than all at once, a subdividable chocolate bar or something would help. Snap off a square, eat it, repeat every 15 minutes. Maybe more complicated trial and error, but it seems possible.
Maureen Dowd wrote her dumb column [vice.com], but nobody has to be a square like her. Play it smart. You can ingest the devil's lettuce.
[SIG] 10/28/2017: Soylent Upgrade v14 [soylentnews.org]
(Score: 2) by edIII on Saturday December 22 2018, @08:52PM
Ohh, that's no longer possible in Northern California. They completely killed the edible industry. You used to be able to find relatively affordable edibles in the $10-$25 price range that had 200-300mg THC/CBD in them. I think some fucking newbs ruined it with a low tolerance person losing their shit on a 350mg THC candy bar eaten all at once. Now the regulations are designed to artificially inflate prices to reduce consumption, and vastly increased taxes, along with neutering the strength. I cannot afford $75 to get the same amount that $15 used to buy. Any product is limited to 100mg in it, and they must be made into individual servings of 10mg each. So unless I want to gain a ton of weight eating unnecessary chocolate, that isn't always gluten free, I'm out of options in the market.
That's why it is literally 50 times less expensive for me to buy gluten free brownie mix and use some ground up weed. There are recipes to make canabutter, but again, getting the dosages right in a home kitchen is not easy at all. It always depends on the weed you get, so every batch needs to be "hand tested". Which means I got to take a Sunday off, put my helmet on, and see just how far into space it's going to send me.
A vape pen is like an order of magnitude easier, and it will be our conveniences that kill us :)
Technically, lunchtime is at any moment. It's just a wave function.
(Score: 2) by sjames on Saturday December 22 2018, @07:27AM (2 children)
Popcorn lung is a condition that arises from inhaling diacetyl (used in artificial butter flavor) at too high a concentration. It has primarily affected people who worked in plants that packaged artificial butter flavored microwave popcorn, but is thought to have affected one or two people who prepared and ate a LOT of microwave popcorn.
At the time the reports came out, vape suppliers were mostly small businesses that lived and died on reputation. The vast majority of them purged diacetyl from their products within a month even though none of them contained enough to violate the new OSHA regulations (that only came along two years later). The few that didn't purge it put warnings on the flavors that contained diacetyl or went out of business due to poor reputation.
Of course, that market is mostly interchangeable rebuildable atomizers and ecigs where you wrap your own coils when needed and fill them with bulk e-juice (either ready made or self formulated), so isn't what the kids are in to.
Stick to those vendors and you should be fine. As for Juul, as a large corporation I wouldn't be surprised by anything that's in their juice as long as it's the cheapest they can get.
The other relevant chemical of concern would be Acetaldehyde, but you shouldn't find much of that in an e-cig as long as you don't run it hot enough to buirn.
TL;DT version, the Mon'n'Pop e-cig industry has been much more careful than required by any regulatory agency, and still is. Meanwhile, even using Juul, the great fear of teens vaping is overblown since it's mostly the kids who would otherwise be sneaking cigarettes (probably menthol or ultra-lights).
(Score: 2) by edIII on Saturday December 22 2018, @09:19PM (1 child)
Thanks for information. I don't vape tobacco or these flavored juices. I exclusively vape THC/CBD products, and looking at my pen I notice that those products run on a lower temperature. What I don't know is what is in the THC laden "syrup" inside the cartridges.
Technically, lunchtime is at any moment. It's just a wave function.
(Score: 2) by sjames on Sunday December 23 2018, @02:18AM
Probably not diacetyl, since that is a flavoring. Commonly in nicotine juice, vegetable glycerin or propylene glycol are used as a carrier, but no Idea what may be in your juice other than the active ingredients.
(Score: 0) by Anonymous Coward on Saturday December 22 2018, @01:49PM
From the research I've done on the subject, popcorn lung is caused by diacetyl used in some commercial vape juices. This is one of the big reasons that I mix my own fluids. All of the reputable flavoring sources will tell you if the flavor you use contains diacetyl, and it is FAR cheaper (order of magnitude /at least/) to mix your own.