Altria’s stock has fallen as a result of a report that the Food and Drug Administration may require Juul to remove its products from retail shelves. A 35 percent share in Juul is owned by the cigarette industry.
The FDA may order the manufacturer of electronic cigarettes to stop selling their goods as soon as this Wednesday, according to a report in The Wall Street Journal. This comes after the FDA has been investigating the brand for several years due to worries that it may have aided in the growth of e-cigarette use among minors. CNN was unable to independently confirm the Journal’s allegation because the FDA has not yet made an official announcement.
CNN was informed by an FDA spokeswoman that the organization was currently unable to offer any information. CNN contacted Juul Labs for comment, but they did not answer right away.
Shares of Altria fell 8% on Wednesday, and this year, the stock has lost 13% of its value. In 2018, the business spent $12.8 billion to acquire a 35 percent ownership in Juul. As worries about the health dangers of vaping grew and US regulators pushed for a ban on e-cigarettes, the agreement soon went south. Juul received criticism for marketing vape pods in flavors like mango, crème, and cucumber that were well-liked by teenagers.
The business stopped selling its flavored goods in the US in 2019.
That action was taken just before the FDA at the beginning of 2020 prohibited all vaping tastes other than tobacco and menthol.
In 2020, Altria (MO), which distributes Marlboro, Virginia Slims, and Parliament cigarettes in the US, disclosed that it has taken a $4.1 billion charge for its investment in Juul. “The growing number of legal proceedings pending against Juul and the anticipation that the number of legal cases against Juul will continue to climb,” the cigarette giant noted.
That came after Altria announced in 2019 that it would write down a $4.5 billion portion of its Juul shareholding. Altria estimated the value of its Juul investment at less than $2 billion at the end of the previous year.
Juul “may pursue an appeal through the FDA, fight the judgment in court, or file a fresh application for its products,” according to The Journal.
This action follows Tuesday’s indication by the Biden administration that it will create a proposed regulation to set a maximum nicotine level in cigarettes and other tobacco products, thus lowering the quantity of nicotine in items that are sold in the US. It is a move that no other government has made before, and if it were to be implemented, experts in public health think it would be transformative.
Even though e-cigarette products have been permitted to stay on the market for years, the FDA requested the manufacturers to file applications in 2020 to keep their goods on the market.