Tobacco giant Altria invested $12.8 billion in Juul, taking a 35 percent stake in the e-cigarette maker that valued it at $38 billion.
The deal marks a turning point for Juul. The company has positioned itself as an enemy of Big Tobacco, helping to wean adults off combustible cigarettes, which are responsible for killing about half a million Americans every year. But a surge in high school students using e-cigarettes, mainly Juul, has challenged that posture. It is widely thought these teens would have never smoked, but are being introduced to addictive nicotine by vaping.
U.S. regulators have cracked down on Juul's use of fruity flavors, which they say encourages teen use. With this pressure, Juul has started facing some of the same regulatory and financial pressures that Big Tobacco has dealt with for decades. A deal with Altria could bring that institutional knowledge.
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