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Altria decreases Juul investment by $ 4.5 billion

Juul products appear in a New York smoke shop on Thursday, December 20, 2018.

Seth Wenig | AP

Altria reduced its investment in Juul by about one-third and recorded a $ 4.5 billion expense charge before its third-quarter revenue, the company said Thursday.

Altria said that it was not a single event or factor that led to the impairment. It cited the Trump administration's plans to remove flavored e-cigarettes from the market, as well as e-cigarette bans adopted by cities, states and countries.

Altria invested $ 1[ads1]2.8 billion for a 35% stake in Juul late last year, valuing the start-up of e-cigarettes at $ 38 billion. Regulators have still not approved Altria's stake in Juul. Altria on Thursday said it expects a response in the first quarter of 2020.

In the nearly year since announcing the deal, Juul has been implicated in controversy. The company is largely blamed for having driven an epidemic of youth gunfire.

Juul is the subject of many lawsuits alleging that the company mislead minors and addicted them to nicotine, as well as federal investigations of the company's marketing practices. A former Juul leader arrived on Tuesday in an unfair dismissal lawsuit, claiming the company's quest for profits trumped public health problems.

Consumers question the safety of e-cigarettes in the midst of the outbreak of a mysterious gun-related lung injury. The diseases appear to be related to THC, although a number of patients have only reported nicotine vaping, the addictive chemical in Juul and other e-cigarettes.

The Trump administration is preparing a plan that officials said would remove all flavored e-cigarettes. cigarettes from the market to – and if – the FDA assesses and authorizes them for public sale. Juul announced earlier this month that they would stop selling most flavors of the nicotine pods.

Longtime Altria executive K.C. Crosthwaite replaced Kevin Burns as CEO of Juul last month. Crosthwaite shakes up top management, cuts jobs and tries to repair Juul's image. The company announced it would cease all product advertising in the United States and end its support for a campaign to overturn a San Francisco scheme that banned e-cigarette sales.

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