At one time, Juul was a company that was the leader in the vaping industry with a massive margin. Since then, Juul has been going through tough times. Juul’s value is much less than when it was at its height. Juul has also dissolved the non-compete agreement between their leading company, Altria Group Inc. This means that Altria should pursue this option and will be able to join the vaping market.
JUUL’S FIRST MASS LAYOFFS HAPPENED AFTER THE EVALI VAPING SCARE
EVALI is a slang term for the E-cigarette or Vaping product used with Lung injury. The term was coined when numerous vapers suddenly became sick. Many believed they contracted the illness because of illegal black-market THC vapes. EVALI wasn’t linked to THC vapes until following the outbreak. This meant that legal tobacco vape manufacturers were blamed for illness, too.
Juul was the subject of much backlash because of its perceived image. Juul was viewed as a device that was used by minors who were deemed illegal. In the wake of the incident, Juul limited its product range by eliminating many flavors. Only menthol and tobacco pods were still available. Following the incident, Juul laid off 650 of its employees.
MARKETING DENIAL ORDERS
Like many vape brands, Juul received Marketing Denial Orders (MDOs) from the Food and Drug Administration (FDA). Similar to many other companies, Juul stood up to their MDOs. Juul has also been granted an order of stay. This means that Juul can sell their goods even while they are being heard in court. Juul’s legal battle may not be very significant. However, legal problems can cost money. Legal fees can be expensive. Even though Juul is one of the largest vape firms, the cost of going through court may threaten them.
ALTRIA BREAKS OFF THEIR NON-COMPETE AGREEMENT WITH JUUL
For reference, Altria Group Inc. is the parent company of Philip Morris and Juul Inc. In the past, Juul and Altria agreed not to compete with one with each other. Juul was to stay away from the smoking market, while Altria kept vaping devices clear. The agreement is over; Altria is free to join the vaping market if it decides to proceed.
Altria getting into the vaping industry will not be favorable for Juul. Juul, as a firm, is a lot weaker than Altria. Juul’s company’s name has been associated with the most harmful aspect of smoking. They’ve needed to lay off huge numbers of employees in trying to take on an organization of the government in the court. Their size has decreased dramatically as a business. Its shares have lost 95 percent value in the years since Altria purchased it. This brings us to the next issue.
There are a variety of sources that claim Juul may also be considering applying to file Chapter 11 bankruptcy, such as Bloomberg as well as the Wall Street Journal. Chapter 11 bankruptcy allows a firm to continue operating while creditors and the courts decide the best way to settle financial issues and, in most cases, reorganize the business. Filing bankruptcy ensures that a company remains in operation to repay its debtors. If Juul can file for this kind of bankruptcy, it’ll stay alive for a long time.
Altria and Juul can go places after their non-compete agreements have been terminated. Whatever the company does, the results will likely be felt in vaping.