Juul Revenue Reaches $1 Billion, Finds Investor in Marlboro

With less than two year’s under its belt, JUUL Labs has become an overnight success with its production of the hottest vaping device on the market, the Juul. A huge item among teenagers and college-aged users, the e-cigarette has been exponentially profitable, officially passing a major milestone: $1 billion in revenue.

Revenue for the Juul has increased from $200 million, according to CNBC, with sales closer to $1.5 billion. This comes at a time where tobacco sales are reaching a low, with cigarette sales falling 4.5% in 2018. In response to this drop, Altria, the makers of Marlboro, invested at $12.8 billion for a 35 percent stake in Juul Labs. This ups Juul’s value as a company from $15 billion to an estimated $38 billion as a whole. While the deal still requires regulatory approval that may take the year to attain, the 35 percent stake is frozen for the next six years.

Investors and analysts worry that the company paid too much for too little, but CEO Howard Millard spoke to assure that this was a sound business decision. 

"When you add to Juul's already substantial capabilities, our underage tobacco prevention expertise and ability to directly connect with adult smokers, we see a compelling future with long-term benefits for both adult tobacco consumers and our shareholders," Willard said. “[Juul provides] significant stake in the fast-growing e-vapor category.”

Courtesy: Juul

Despite being the center of controversy among health advocates and the FDA deeming the rampant use of the product an “epidemic,” the Juul is still experiencing massive upticks. Willard acknowledges the criticisms against the product’s potential harm to younger users but remained firm that it was an industry issue. Regulators tried to crack down on Juul sales to underage users by temporarily prohibiting the marketing of certain sweet flavors, only selling the products at age-restricted shops, and shutting down social media accounts tied to the product. The concern lies in the real possibility of addiction, despite being a tobacco smoking alternative, with a single Juul pod cartridge being the nicotine equivalent to a pack of cigarettes.

While the threats to the company and the controversies swirling over the health risks and safety of the product, the fact still remains that Juul dominates nearly three-quarters of the e-cigarette market with a 73% share as of Oct. 2018. Whether a healthy alternative to cigarettes or not, Marlboro still stands to experience a great deal of success and feel the growth that has been lacking in its own tobacco sales.