Juul Labs signage is seen within the window of a store in San Francisco, June 25, 2019.
David Paul Morris | Bloomberg | Getty Images
The Food and Drug Administration announced Thursday that it’ll ban the sale of Juul e-cigarettes.
The choice is a component of the agency’s broader review of the vaping industry following years of pressure from politicians and public health groups to control the segment as strictly as other tobacco products after vaping became more common amongst high schoolers.
Juul had been searching for approval from the FDA for its vaping device and tobacco- and menthol-flavored pods, which can be found at 5% and three% nicotine strengths. Already, the agency in 2020 banned mint- and fruit-flavored vaping products in an try to cut down on teen vaping, leaving just tobacco- and menthol-flavored products in the marketplace.
The choice to ban the sale of those remaining products by Juul deals a hefty blow to the corporate. Juul’s international expansion efforts have been hamstrung by regulations and a scarcity of consumer interest. The U.S. stays its largest market.
Rival e-cigarette makers British American Tobacco and NJOY won approvals for his or her e-cigarettes, although the FDA rejected among the flavored products submitted by the businesses. The agency said it approved each firms’ tobacco-flavored products because they proved they may benefit adult smokers and outweighed the chance to underage users.
The FDA has been making strides to chop down nicotine use in traditional tobacco products, too. On Tuesday, the agency said it plans to require tobacco firms to slash the nicotine content in cigarettes to minimally addictive or nonaddictive levels.
In 2019, federal data found that greater than 1-in-4 highschool students had used an e-cigarette up to now 30 days, up from 11.7% just two years prior. An outbreak of vaping-related lung disease in 2020 only heightened concerns about e-cigarettes.
Last 12 months, usage amongst highschool students fell to 11.3% amid greater regulatory scrutiny and the coronavirus pandemic.
Juul had been the market leader in e-cigarettes since 2018, in accordance with Euromonitor International. As of 2020, the corporate held 54.7% share of the $9.38 billion U.S. e-vapor market.
E-cigarettes deliver nicotine to users by vaporizing liquid in cartridges or pods. Nicotine is the ingredient that makes tobacco addictive, and it could have other negative health effects. Nevertheless, e-cigarette manufacturers have argued that their products can deliver nicotine to addicted adult smokers without the health risks that come together with burning tobacco.
Marlboro owner Altria bought a 35% stake in Juul for $12.8 billion in late 2018. Nevertheless, Altria has slashed the worth of the investment as Juul and the broader e-cigarette industry became embroiled in controversy. As of March of this 12 months, Altria valued its stake at $1.6 billion, an eighth of its original investment, and Juul itself at under $5 billion.
The FDA decision will likely also hurt Juul’s defense in U.S. courts because it faces lawsuits from a dozen states and Washington over allegations that it marketed its products to minors and played a serious role within the vaping epidemic. It has already settled with North Carolina for $40 million and Washington state for $22.5 million.
The FDA gained the facility to control recent tobacco products in 2009. During the last decade, hundreds of e-cigarettes appeared on store shelves with none approval from the agency, which allowed the sale of those products because it phased in standards for the burgeoning industry.
A court decision created a timeline for the FDA’s approval strategy of e-cigarette company’s premarket tobacco product applications. The agency is reviewing roughly 6.5 million applications from about 500 firms and has already denied about 1,000,000 applications from smaller players like JD Nova Group and Great American Vapes for his or her flavored vape products.
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