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What Ever Happened to Juul?

The controversy of vape-related lung injuries that occurred throughout the US in 2019 had Juul at its center. This has deeply affected the company, and the problems don’t stop there. There have been lawsuits, layoffs, and an uncertainty in the future of the most recognizable name in vaping.

While those lung injuries were mostly attributed to illegal THC cartridges that had ingredients like Vitamin E acetate that resulted in lung illnesses, that didn’t stop Juul from being blamed for much of it. Since then, Juul has had some rough times. Here’s what happened.

Juul’s Recent Legal Problems

A lawsuit was filed by a former Juul executive, which alleges that Juul knowingly released a batch of contaminated eliquid that was used in a million pods earlier in 2019 without informing customers. This may have led to many of the cases of lung injury that brought about the “vaping epidemic.”

Siddharth Breja, former senior vice president of global finance at Juul from May 2018 to March 2019, claims that he had been fired due to complaining about the contaminated pods.

He states that during a meeting on March 12 of last year, he learned that a batch of mint eliquid that was used to make 250,000 refill kits, or a million pods in total, was actually contaminated. Despite that, it had already been shipped to retailers.

Breja then claims that while he had forwarded this information to higher-ups, the company refused to issue a product recall or health and safety notice. Doing so would have cost the company $38 billion in valuation. A week later, he was fired from Juul.

He says that the reason for the firing was due to him misrepresenting himself as a former chief financial officer at the ride-sharing company Uber, a claim that he reaffirms as accurate. He claims to represent himself as a former chief financial officer of a division at Uber.

The former Juul executive now claims that Juul wants to sell pods that are almost a year old. He says that he suggested including expiration or best by dates on the packaging of the pods, which was allegedly responded to by former CEO Kevin Burns that they need not bother as their customers wouldn’t care anyway.

In an email, a Juul spokesperson stated that Breja’s claims were baseless, his firing was due to his failure to demonstrate leadership qualities needed in his role, and the allegations regarding safety issues with Juul products are meritless.

Juul Pulling Out of International Markets

In late October 2019, on the same day when news of the lawsuit broke out, Juul announced that it would let go of 500 people, which was 10-15% of its then-current workforce.

Four executives also departed Juul while the company was under intense scrutiny by the Food and Drug Administration due to claims of having given misleading statements about its products and purposefully targeting teens for sales.

Later on, announced in April of this year, in the midst of the COVID-19 pandemic, Juul set forth to lay off 800 to 950 jobs, including a third of the workforce in its Bay Area headquarters. That’s around an additional 40% of its workforce.

They have pulled out of many countries like Indonesia, South Korea, China, Israel, and so on. They’ve also delayed their launch in the Netherlands. Much of the pull-outs were due to push-back by the respective countries’ governments against nicotine-based products.

When the company was acquired by the Altria Group, the parent company of Philip Morris International, it was projected that in five years, 50% of Juul revenue will come from international markets.

However, anti-vaping sentiment in those countries have since made that prediction seem jinxed. They now have to taper off their global ambitions and focus more on securing the American domestic market.

Juul Headquarters Moving to Washington DC

Juul is set to move their headquarters from San Francisco to Washington DC. The move seems to be a politically-motivated one as they’re aiming to influence federal regulations on vaping.

This plus the downsizing of their workforce in San Francisco makes it look like their future is now being directed by their parent corporation, which has close lobbying ties with the capital.

The company owes much of its early success to its vision as a tech company, mingling with other tech startups in Silicon Valley and designing their product to look like a sleek tech gadget.

But now, it looks like they’re moving to a new direction, especially due to the undeniable fact that they’re selling nicotine-based products first and foremost.

Conclusion

More recently, another former employee has filed a lawsuit against Juul over the company’s use of non-disclosure agreements. Former manager Marcie Hamilton alleges that those confidentiality requirements harm Juul’s current and former employees, the public, and the state of California.

It does seem like while they had a meteoric rise during the 2010s, their entry into 2020 has been marred with controversy, downsizing, and legal problems. It remains to be seen how the company will fare in its future, no longer as a startup, but as a vaping juggernaut.


Jesse Hancuff
Jesse Hancuff

Author



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September 25, 2020

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September 25, 2020

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