Juul has prided itself on its independence from Big Tobacco. It may not be able to much longer.
The e-cigarette maker is in talks to sell a stake of the company to Altria, a person familiar with the matter tells CNBC. Earlier this fall, Juul paused efforts to raise money from private investors because of regulatory uncertainty, people familiar with the matter say. The fundraise would have valued Juul at more than $20 billion, these people said.
The change of course highlights the existential crisis in which Juul finds itself. Its fruity flavors, questionable past marketing and explosive popularity among teenagers have invited critics to compare it to Big Tobacco and the days of the Marlboro Man and Joe Camel.
Juul designed its devices to look completely different from cigarettes. The company has used its autonomy — and its purported purpose of eliminating conventional cigarettes — to brush off those comments. That wasn’t enough to prevent attention from the U.S. Food and Drug Administration.
Today, Juul is able to market itself as an enemy of Big Tobacco, simply trying “to improve the lives of the world’s 1 billion adult smokers.” That will become much harder to do if it sells part of itself to Altria, the maker of top-selling cigarette Marlboro. However, in teaming up with Altria, Juul would gain regulatory expertise to help it manage the tricky waters that are becoming even choppier as the agency cracks down on rising rates of teen vaping.
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