Is Juul for Sale? The Troubled Vape Company Looks for Help
Time:2023-02-01
Views:609
Juul’s expenses mount as its market strength declines
Juul Labs recently settled thousands of lawsuits by individuals, municipalities, school districts and American Indian tribes for a reported $1.7 billion. Just months earlier, the company agreed to pay over $400 million to settle lawsuits by 33 states.
To cover the cost of those settlements, Juul received additional equity investments from current investors, and cut costs drastically, eliminating a third of its workforce. Juul had considered chapter 11 bankruptcy last fall, before it got the emergency investments.
In the last two years, Juul has lost its position as the top convenience store e-cigarette, facing increased competition from the market leader, R.J. Reynolds’ Vuse Alto, and from hundreds of disposable vaping products. Since 2018, Juul’s share of the c-store/gas station vape market segment has dropped from over 70 to under 30 percent.
Juul is also engaged in a battle with the FDA Center for Tobacco Products, which last June issued a marketing denial order (MDO) to Juul, ordering its products off the market. The MDO was immediately stayed by a federal court, and the FDA eventually agreed to reconsider the order, but Juul faces a long and difficult struggle to get marketing authorization from the agency.
Juul’s expenses mount as its market strength declines
Juul Labs recently settled thousands of lawsuits by individuals, municipalities, school districts and American Indian tribes for a reported $1.7 billion. Just months earlier, the company agreed to pay over $400 million to settle lawsuits by 33 states.
To cover the cost of those settlements, Juul received additional equity investments from current investors, and cut costs drastically, eliminating a third of its workforce. Juul had considered chapter 11 bankruptcy last fall, before it got the emergency investments.
In the last two years, Juul has lost its position as the top convenience store e-cigarette, facing increased competition from the market leader, R.J. Reynolds’ Vuse Alto, and from hundreds of disposable vaping products. Since 2018, Juul’s share of the c-store/gas station vape market segment has dropped from over 70 to under 30 percent.
Juul is also engaged in a battle with the FDA Center for Tobacco Products, which last June issued a marketing denial order (MDO) to Juul, ordering its products off the market. The MDO was immediately stayed by a federal court, and the FDA eventually agreed to reconsider the order, but Juul faces a long and difficult struggle to get marketing authorization from the agency.
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