On Wednesday, the CEO of Juul Labs, Kevin Burns, announced his resignation from the company. Burns’ resignation comes amid an ongoing national vape crisis that has drawn intense scrutiny against e-cigarette manufacturers and products. Across the United States, health experts have tied nearly 600 cases of a still-unknown lung syndrome to vaping. So far, eight people have died in connection with vaping products. But most of the deaths appear to have stemmed from the use of counterfeit THC vape cartridges.
Despite the lack of conclusive evidence, however, policy-makers are moving forward with aggressive bans and restrictions on vape products that include nicotine in an effort to reduce emerging public health concerns and address a rapid uptick in the popularity of vaping among adolescents. Faced with mounting regulatory pressure and a growing chorus of public criticism and backlash, Juul Labs, maker of one of the most popular disposable vape products on the market, has ousted CEO Kevin Burns and suspended all U.S. advertising.
Shake-Up at Juul Over National Vape Crisis
Juul Labs is in damage control mode. The company’s principal investor Altria Group, the marker of Marlboro cigarettes, is replacing Juul CEO Kevin Burns with one of their own to handle the vape company’s response to looming bans on many of its signature products. According to Altria, which said Burns’ stepping down was Juul’s decision, K.C. Crosthwaite, Altria senior vice president and chief strategy and growth officer, will step up to serve as Juul CEO.
Altria essentially went all in with its investment in Juul when the vape company was at its peak performance. Now, it looks like Juul is in free fall. The company has halted all U.S. advertising across all platforms: broadcast, print and digital. Altria is also backing out of talks with cigarette giant Philip Morris International. Altria had hoped to complete a merger with Philip Morris.
Juul Says it Will Comply with Federal and State Decisions on Vaping Bans
It would also appear that Juul knows a losing battle when it sees one. In addition to suspending all advertising in the U.S., Juul has announced that it will “fully support and comply” with federal policies addressing vaping. Earlier this month, Trump convened Food and Drug Administration officials and other federal health officials to discuss a possible nationwide ban on flavored e-cigarettes. On Wednesday Juul officially announced that it would not lobby the Trump administration regarding any vape policy. Critics say flavored vape products are marketed toward children and driving underage vape consumption.
In a statement announcing his new role as Juul CEO, K.C. Crosthwaite acknowledged that the future of alternative nicotine products is under significant threat. “Unacceptable levels of youth usage and eroding public confidence in our industry” have compromised trust in e-cigarette products, Crosthwaite said in the statement. Crosthwaite said he wants to invite open dialog in order to respond to concerns and regain public trust.
Despite deaths linked to non-nicotine vape products, like illicit THC cartridges, the cannabis industry has not faced the kind of public pressure e-cig manufacturers have. Unlike licensed cannabis products, which must comply with a bevy of rules and regulations including product testing, e-cigarettes have virtually no regulatory standards or testing requirements. This fact has made e-cigarette companies easier targets for politicians and regulators eager to gain some control over the sprawling nicotine vape industry.