FDA Reverses its Ban on Juul

What’s that smell? Cool cucumber-flavored nicotine vapor.

On Thursday, the US Food and Drug Administration reversed its ban on Juul e-cigarettes as it plans a review of new company data and case law derived from various recent lawsuits. Of course, the agency’s initial ban in 2022 quickly became a ban in name only.

Run the Juuls

In the years leading up to the FDA’s crackdown, Juul exploded in popularity; In a report last year, the agency found that monthly e-cigarette sales had boomed 50% between January 2020 and December 2022 (Juul held a strong second place in the industry, behind Vuse, a subsidiary of cigarette giant Reynolds American). 

In 2020, the FDA ordered Juul and its industry competitors to submit scientific research proving the products were less harmful than regular ol’ smokes, and, by June 2022, the FDA banned Juul from the market due to four unresolved questions related to the toxicology data. Juul quickly appealed the order — and the FDA allowed it to stay on shelves through the process. On Thursday, the FDA officially rescinded the 2022 ban-that-wasn’t, though the product remains under agency review.

That keeps Juul in something of a state of limbo. The status quo has been anything but stable:

• The 2022 ban sent Juul into chaos. Just four years prior, Marlboro-maker Altria had invested $12.8 billion into the company for a 35% stake; less than a year after the ban, Altria effectively closed out its position in a move that valued its stake at just $250 million.
• Following the ban, Juul also narrowly averted filing for bankruptcy, though it was ultimately bailed out by two longtime investors and board members: Hyatt heir Nick Pritzker and venture capitalist Riaz Valani. But now, in an ongoing case, other Juul investors have filed a lawsuit against the company, alleging Pritzker and Valani benefitted themselves at the expense of the company and its investors.

Zynception: What’s worse is that in the time since Juul’s 2022 quasi-ban, smokeless tobacco products, like the Zyn pouches made by Phillip Morris, have essentially disrupted e-cigarettes in a similar way the vapes disrupted regular cigarettes. In fact, smokeless products accounted for nearly 40% of Phillip Morris revenue last year, a roughly 21% surge. Juul’s business, in other words, is going up in smoke.