As Regulations Loom and Vaping Deaths Climb, Juul Replaces CEO with Big Tobacco Exec

Businessman holding a briefcase

The embattled e-cigarette manufacturer Juul Labs has announced that Kevin Burns is stepping down as company CEO. Under Burns, the company grew from a small start-up into a worldwide business. Yet Juul’s meteoric success came partly from hooking a new generation of kids on their nicotine products — leading to what the U.S. Surgeon General has described as a “youth vaping epidemic.”

Now that a growing number of people are sick and dying from a poorly understood vaping-associated lung disease, Juul and the vaping industry are facing an unprecedented wave of outrage and scrutiny.

Recently, it was reported by the Wall Street Journal that Juul is facing a criminal probe from the U.S. attorney general’s office in the Northern District of California. Shortly thereafter, Massachusetts Governor Charlie Baker took the landmark step of declaring a 4-month ban on the sale of all vaping products.

Federal regulators have announced that they are following through with the Trump administration’s ban of flavored e-cigarette products, which will cut sharply into Juul’s sales. Against the backdrop of hundreds of vaping-related illnesses and escalating oversight, Juul is going to have a lot to answer for in the coming days.

New CEO for Juul, No Merger for Altria

Enter Juul’s new CEO, K.C. Crosthwaite, who was serving as chief growth officer for Altria, the Big Tobacco powerhouse that owns a 35% stake in Juul. Unlike Burns, who led the upstart yogurt company Chobani before coming to Juul, Crosthwaite is a veteran of the complex legal landscape surrounding tobacco.

At Altria, Crosthwaite helped get Food and Drug Administration (FDA) authorization for its IQOS devices (I-Quit-Ordinary-Smoking). Like Juul, IQOS is marketed as a safer alternative to smoking, though the research is still highly conflicted.

In a separate statement, Altria announced that they had ended merger discussions with Phillip Morris International (PMI). Despite the timing of Burns’ departure, the current level of public outrage, and the cacophony of investor concerns, Juul was not named as a reason for the breakdown in negotiations.

Amid Outrage, Juul to Suspend Advertising and Lobbying Efforts

Juul also announced that they are suspending all product advertising in the U.S. The move comes after the FDA sent a warning letter to Juul about illegally marketing their product as safer than cigarettes without approval. In addition, the company promised to refrain from lobbying the Trump administration on its forthcoming ban of e-cigarette flavors.

Flavored tobacco products have long been cited as a driver of youth nicotine use, and with vaping, this trend has only become more pronounced. According to preliminary survey data from the Centers for Disease Control and Prevention (CDC), 60% of high schoolers cited the use of popular fruit, menthol, or mint-flavored e-cigarette products in the past 30 days.

House Hearing Clarifies the Next Steps for Juul

The announcement about the CEO shakeup and marketing freeze came only hours before a hearing on Capitol Hill titled, “Sounding the Alarm: The Public Health Threats of E-Cigarettes.” Almost all the representatives expressed disappointment at the FDA’s limited response in comparison to the scope of the twin vaping crises.

“I think this is horrifying, what’s happening,” said Rep. John P. Sarbanes of Maryland, who sketched a bleak picture of what will happen if the government doesn’t do more to intervene. He said:

“We’re playing the same reel over again that we saw with cigarettes before the tobacco settlement, with opioids before the heightened scrutiny it’s receiving, and the litigation that’s ensued, and presumably some kind of compensation that will come too late for many families and many communities. But even as we’re dealing with the aftereffects of those public health crises, we’ve got a new one unfolding before our eyes.

And you can just predict that we’re going to be having hearings ten years from now, looking back and picking up the pieces of a terrible public health crisis with incredible impacts on communities across the country. The fact that it’s starting, and its breeding ground is among children, is what makes it even more horrifying.”

But decisive action may not be quick to come. When it came to whether or not mint and menthol would be part of the new ban on flavored e-cigarette products, acting FDA Commissioner Ned Sharpless could not say. He said the guidance was being finalized and would be published soon.

Pressed by Subcommittee Chair Diana DeGette about enforcing compliance with the new regulations, Sharpless said the FDA would order manufacturers to pull their flavored products. If they do not, manufacturers become subject to penalties and ultimately law enforcement.

Will these changes be enough?

Likely other states and municipalities will soon elect to use their regulatory authority to combat youth vaping and vaping-related illnesses.

If you, your child, or someone you care about vapes e-cigarettes, it’s important to be informed about the risks and what to do if someone has been hurt vaping.

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Author:Sokolove Law
Sokolove Law

The Sokolove Law Content Team consists of writers and editors who work alongside the firm’s attorneys and case managers. The team strives to present the most accurate and relevant information for those who need legal help.

Last modified: October 9, 2019

View 5 Sources
  1. Centers for Disease Control, “Outbreak of Lung Injury Associated with E-Cigarette Use, or Vaping.” Retrieved from https://www.cdc.gov/tobacco/basic_information/e-cigarettes/severe-lung-disease.html. Accessed on September 25, 2019.

  2. The New York Times, “Juul Shake-Up: C.E.O. Steps Down.” Retrieved from https://www.nytimes.com/2019/09/25/health/juul-vaping.html. Accessed on September 25, 2019.

  3. Reuters, “’Heat-not-burn’ Cigarettes Still Damage Lungs.” Retrieved from https://www.reuters.com/article/us-health-iqos/heat-not-burn-cigarettes-still-damage-lungs-idUSKCN1M12CB. Accessed on September 25, 2019.

  4. U.S. House of Representatives, House Subcommittee on Oversight and Investigations, “Sounding the Alarm: The Public Health Threats of E-Cigarettes.” Retrieved from https://energycommerce.house.gov/committee-activity/hearings/hearing-on-sounding-the-alarm-the-public-health-threats-of-e-cigarettes. Accessed on September 25, 2019.

  5. Wall Street Journal, “Federal Prosecutors Conducting Criminal Probe of Juul.” Retrieved from https://www.wsj.com/articles/federal-prosecutors-conducting-criminal-probe-of-juul-11569268759. Accessed on September 25, 2019.