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Put that in your cartridge and smoke it.

Altria, the largest tobacco company in the world, just exited its minority stake in Juul, one of the largest electronic cigarette companies in the world, per a report from the Financial Times. In just over four years, the Marlboro maker's vaping investment nosedived nearly 100%.

On Ploom Nine

In 2018, Altria spent $12.8 billion to grab a 35% stake in Juul, which was at that point a privately held company controlling one-fourth of the e-cigarette industry, raking in annual revenue of $2 billion. Its marketing, which was heavily based on social media, was cheap and effective at beefing up sales. And while it may not have had many celebrity endorsements, The Wall Street Journal reported that Juul sent highly discounted products to influential stars like supermodel Bella Hadid who posed on her Instagram taking a hit from one of the devices that looked similar to a flash drive.

However, Juul, and the sector as a whole, spent the next few years facing massive legal headwinds. While lobbyists claimed e-cigarettes were always meant to be a (relatively) healthier alternative to cigarettes for established smokers, medical experts said vapes -- especially the ones with fruity and sweet flavors -- specifically targeted teenagers, creating an epidemic of underage smoking not seen since Joe Camel. In 2019, the US Centers for Disease Control and Prevention found that nearly 30% of American high schoolers reported they vaped.

It wasn't long before the government stepped in to tighten its grip on Big Vape and Altria's investment went up in smoke:

  • In early 2020, the US Food and Drug Administration banned most flavored e-vape cartridges, and two years later, it disallowed all sales of Juul in the country (the decision was later blocked on appeal.) In December, Juul agreed to pay $1.2 billion in about 10,000 lawsuits that alleged it was partly responsible for the surge in youth vaping.
  • Altria exchanged its stake in Juul – now worth only $250 million – for a "non-exclusive, irrevocable global license" on some of the company's intellectual property concerning heated tobacco products. Juul only offers liquid nicotine cartridges and has yet to release a heat-not-burn product that uses actual tobacco leaves.

You've Come A Long Way, Baby: With Juul looking to be a lost cause, Altria is setting its sights elsewhere. Last year, the Virginia-based company ended its non-compete agreement with Juul and struck a deal with Japan Tobacco to develop heated tobacco products. Plus, Altria might be closing in on an acquisition of NJOY, a start-up vape business, for $2.75 billion. The WSJ reported that NJOY investors had hoped the company would fetch a $5 billion price tag, but they may have just been blowing vapor.