MORE TROUBLES IN THE VAPING WORLD
By Todd Horwitz
Juul CEO Exits
The vaping powerhouse Juul Labs replaced its chief executive with a veteran of Big Tobacco on Wednesday, deepening the company’s turmoil and raising doubts about the very future of the e-cigarette industry.
The sudden announcement capped a relentless cascade of events that has called into question the safety of devices once billed as a promising alternative to cigarettes, one of the world’s leading preventable causes of death. Now, Juul is looking to that very industry for its survival as it faces a federal criminal inquiry, new bans on some of its products, and an onslaught of state and federal regulatory investigations into its marketing practices.
Early Wednesday morning, after frantic days of internal meetings, the company announced that its current chief executive, Kevin Burns, would resign as chief executive. His chosen replacement is K.C. Crosthwaite, a top official at Altria, the cigarette giant that bought a 35-percent share in Juul for $12.8 billion last December and has seen the company it invested in rocked by growing crisis.
In a statement, Crosthwaite said vaping products originally were introduced to move adult smokers to a safer alternative. But hundreds of cases around the country of mostly young users experiencing a mysterious breathing ailment thought to be tied to vaping is raising new alarms.
He said the company’s original mission is at risk “due to unacceptable levels of youth usage and eroding public confidence in our industry. Against that backdrop, we must strive to work with regulators, policymakers and other stakeholders, and earn the trust of the societies in which we operate,” Crosthwaite said.
Flavored e-cigarettes represent the majority of Juul’s sales, but analysts have said the company’s decision to stop fighting the Trump administration’s regulations might fend off an even bigger blow to the company: the federal government banning Juul from selling any of its products.
At least 530 people in 38 states have been sickened with a vaping-related lung disease, and nine people have died. Health experts are also concerned about long-term pulmonary issues from vaping. Yet health experts have not tied the outbreak to any specific product or type of e-cigarette. Many cases of the mysterious respiratory illness are connected to people who have used e-cigarette products to vape marijuana bought on the black market.
Todd “Bubba” Horwitz