TI Editorial

The shoe finally dropped on December 20 when Altria Group announced it had signed and closed a $12.8 billion investment in Juul Labs, the U.S. e-vapor leader. The purchase brings Altria a 35 percent interest in the company, whose value it set at $38 billion.

Juul will remain fully independent.

The transaction involves a service agreement that will contribute to Juul’s mission to switch adult smokers to e-vapor products. What benefits will Juul enjoy from this transaction, besides lots of money? Altria says it will have access to its best-in-class infrastructure and services, among them:

• Altria will provide Juul access to its tobacco products retail shelf space which will allow Juul’s products to appear alongside combustible cigarettes.

• Altria will enable Juul to deliver smokers directly through cigarette pack inserts and mailings to adult smokers via Altria companies’ databases.

• Altria will help Juul expand its reach and efficiency, and Juul will have the option to be supported by Altria’s sales organization, which covers approximately 230,000 retail locations.

What should we derive from all this? Well, here is what the parties involved want us to derive.

“[Our] investment sends a very clear message that Juul’s technology has given us a truly historic opportunity to improve the lives of the world’s one billion adult cigarette smokers,” said Kevin Burns, Chief Executive Officer of Juul Labs. “This investment and the service agreements will accelerate our mission to increase the number of adult smokers who switch from combustible cigarettes to Juul devices.”

The message I derive is a metaphorical one, symbolizing that for the major players in this industry, cigarettes are beginning to look like a part, and a diminishing one, of their history.

Will the Altria-Juul partnership last 100 years? I don’t know, but I think it is fairly safe to assume that it will last beyond the six year minimum specified in the agreement. For the whole story, see “Could Juul be the Newest Jewel in Altria’s Crown?”

You will be interested also in reading how Altria has discontinued several of its reduced-risk products (see page 14) so that Altria will participate in the e-vapor category only through Juul. Altria, by the way, has purchased nearly half of a leading cannabinoid company in Canada (see page 12).

Elsewhere in this issue: Universal Leaf is coming to the end of its centennial year, but when I asked for information about the event, what I mostly got was a list of the principles that the company has learned on how to conduct business in the future. That tells me that UL is already planning its next 100 years. See for yourself— the story begins on page 16.

—Chris Bickers, Editor-In-Chief