On the surface, it looks like JUUL Labs has surrendered.
On Wednesday, CEO Kevin Burns, who has spent much of this past summer apologizing for what the Food and Drug Administration (FDA) has called an "epidemic of youth vaping," stepped down. K.C. Crosthwaite, who is not a Flannery O'Connor character but instead a well-known executive at Altria—the Big Tobacco producer that has a 35 percent stake in JUUL—was set to be his replacement. Amid this shuffle, JUUL also announced that it planned to effectively end all of its advertising, and that if President Trump wanted to ban flavored e-cigarettes, it wouldn't stand in the way.
"Working at JUUL Labs has been an honor, and I still believe the company's mission of eliminating combustible cigarettes is vitally important," Burns said in a statement. "I am very proud of my team's efforts to lead the industry toward much needed category-wide action to tackle underage usage of these products, which are intended for adult smokers only."
It was the usual refrain, a careful sidestep around the fact that, while JUUL cannot credibly say vaping is definitely safer than smoking cigarettes, it has long advocated it as an alternative to the number one cause of preventable death in the country. This was at the heart of its now-defunct "Make the Switch" ad campaign, and some research, it should be noted, does support the conclusion that vaping is a better option next to smoking cigarettes.
But while it may finally appear as if JUUL is acting less like an arrogant tech company and taking a back seat—"inviting an open dialogue, listening to others, and being responsive to their concerns," as Crosthwaite said in a statement—this shakeup can also read as the opposite. That is, industry observers said, that the vaping company was becoming more and more like a tentacle of Big Tobacco, with a leader squarely from that world and a preemptive decision—before the federal government mandated it, as it did decades ago with cigarettes—to stop advertising.
"At this point, it's very evident to me that what's happening is the vaping market is being taken over by Big Tobacco," said Michael Siegel, a professor of community health sciences at Boston University. "There will be a transition from a diverse market to a very, very concentrated market with only a few big players."
"JUUL has followed the Big Tobacco playbook all along in marketing to our children and getting our children addicted to nicotine, and now they are going to follow the Big Tobacco playbook," added Jacob Plattenberger, a personal injury attorney who has filed complaints against the company.
It's been a brutal few months for the vaping company, once valued at $38 billion, which currently controls around two-thirds of the U.S. market. Hundreds of people around the country have come down with apparently vape-linked illnesses, and a rapidly developing public-health scare has caused cities, states, the FDA, and even Trump to drastically respond with direct calls for some sort of prohibition. JUUL products have not been directly tied to any of the illnesses or deaths, but both the FDA and federal prosecutors in California have launched criminal probes into the brand.
Meanwhile, also on Wednesday, Philip Morris International (PMI) and JUUL's Altria, also the parent company to Philip Morris USA, revealed that they would not reunite, as was rumored to be possible as recently as last month.
"Calling off the merger is, I think, bigger news than the CEO stepping down," said Sarah Milov, an assistant professor of history at the University of Virginia and the author of the upcoming book, The Cigarette: A Political History.
"This speaks to the motives of PMI all along: to distribute JUUL in the developing world," she added. "But since India and China... have now nixed JUUL's expansion, there is little value in the merger, and a lot of downside as JUUL is under multiple criminal probes."
As it turns out, though, actual mergers might not even be necessary for Big Tobacco companies to succeed in tandem in the 21st century.
In fact, Altria and Philip Morris International will reportedly work together on launching IQOS in the United States—a device that, instead of burning tobacco leaves, heats them, simply turning the smoke into a nicotine-laden vapor without any of the fuss of vape juice.
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