According to people familiar with the situation, the U.S. Food and Drug Administration is preparing to ban Juul Lab's e-cigarettes from the U.S. market.
Following the report, shares of Altria Group (MO.N), which owns a 35% stake in the maker of vaping products, fell 8.5%. According to the report, the decision could be made as early as Wednesday.
A request for comment was not answered by the FDA or Juul Labs' spokespeople in time for publication.
Following a significant social media promotion, the e-cigarette brand became more well-known in 2017. Because of worries that its marketing campaign was aimed at children, the brand, which was known for its fruity tastes, came under FDA examination.
Truth Initiative surveys revealed that people under the age of 18 preferred the brand the most. Over 2 million US middle school and high school students are expected to use e-cigarettes in 2021, according to an FDA report from last year.
According to the Centers for Disease Control and Prevention, young individuals' developing brains may be harmed by nicotine exposure via e-cigarettes. According to the CDC, the goods may also contain chemicals that are dangerous to the lungs, such as heavy metals and cancer-causing substances.
Juul has come under increased scrutiny from regulators, lawmakers, and state attorneys general due to the popularity of its nicotine products among teenagers. Under pressure, the company halted sales of several flavors in the United States in late 2019.
The ban comes after a thorough review of Juul, which requires FDA approval for its e-cigarettes to remain on the market. Juul could appeal through the FDA, or challenge the rule in court, the WSJ reported
Juul has previously been reprimanded by the FDA for promoting its products as safer than other tobacco products. E-cigarettes were initially marketed to former smokers in order to help them avoid the harmful effects of traditional cigarettes; they function by converting liquid nicotine into vapor. However, experts warn that the smooth delivery of high nicotine content in a sleek design may promote nicotine addiction in younger people.
The FDA has taken numerous steps to regulate the e-cigarette and vaping industries, including the prohibition of flavored cartridge-based vaping products.
Although Juul is one of the more well-known brands in the market, there are other businesses that sell e-cigarettes. According to the WSJ, the FDA has given the go-ahead for several of Juul's competitors, including Reynolds American Inc. and NJOY Holdings Inc., to continue selling e-cigarettes with tobacco flavors.
