In 2018, Altria made an investment in JUUL Labs for 35% stake in the company for about 12.8 billion dollars. (Federal Trade Comission 2020)
However, in 2023 Altria sold its investment in JUUL labs for in exchange for some of JUULs intellectual property.
Why JUUL?
JUUL Labs sells electric cigarettes, that are meant to appeal to “adult smokers”, which is part of JUUL’s marketing. At the end of 2018, JUUL accounted for 76% of retail e-cigarette sales in the United States. JUUL has many reasons for it’s rise of popularity in the United States, stemming from the negative stigma surrounding cigarettes to the sleek design of the JUUL pen. JUUL pens require one cartridge to use, come in a variety of flavors such as mango, fruit melody, and menthol, and reduces aversive experiences of taste, smell, and throat irritation that come with a standard cigarette. In 2019, 80% of people aged from 15-24 reported trying JUUL were also users in the past 30 days. (Matthew C. Fadus 2019)
Altria, wanting to diversify its assets, sought investment into JUUL Labs, wanting to enter the rapidly growing e-cigarette market, and by purchasing stake in JUUL, Altria could get a advantage over its competition.
Challenges to the Investment
Following Altria’s Investment, JUUL was evaluated at 38 billion dollars. Prior to it’s investment in JUUL Labs, Altria backed out of its prior attempts to the e-cigarette market, changing from JUUL’s competitor, to it’s largest investor.
On April 1st, 2020 the FTC sued Altria for violating the Sherman Anti-Trust Act and creating an illegal monopoly. The FTC argued, that Altria and JUUL made closed door agreements, that in exchange for lack of competition from Altria, JUUL Labs would sell stake in its company to Altria, allowing for JUUL to gather further investment into its company and for Altria to gain a strong foothold in the e-cigarette market (Federal Trade Comission 2020)
In 2022, Altria’s investment was significantly devalued due to the legal challenges facing JUUL and its products, such as various lawsuits and the FDA banning flavored e-cigarettes besides tobacco and menthol, Altria’s investment value was brought down to 250 million dollars. In conjunction with the anti-trust lawsuit from the FTC, in March of 2023 Altria sold it’s stake in JUUL in exchange for some of it’s intellectual property. This allowed for it to recuperate it’s investment and in June of 2023, Altria bought the much smaller e-cigarette company NJOY, becoming it’s parent company and allowing for competition in the e-cigarette market. (Altria Group, Inc 2023) Following the deal, NJOY released the NJOY ACE pods, with it being the only e-vapor device approved the FDA.
NJOY Cease and Desist
In June of 2023, JUUL Labs filed a patent infringement claim against NJOY, claiming that it violated JUUL’s patents with regards to NJOY ACE and NJOY DAILY. JUUL argues that NJOY violated their patent on nicotine-salt formation that delivers the cigarette satisfaction from using JUUL and technology in their devices. On January 29, 2025 the International Trade Commission sided with JUUL Labs and on March 31st, NJOY received a cease and desist the prohibited “NJOY® Devices’ and Pods’ importation, distribution and marketing”. NJOY has since filed an appeal for the decision made by the ITC, with the case still ongoing.
If the appeal is rejected, NJOY will be prohibited to sell their product until JUUL’s patents expire in 2034 and 2037 respectively. (Yaisejko 2025)