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Juul Shake-up: C.E.O. Step down



Juul Labs CEO, the dominant e-cigarette company that has been the target of public and legislative outrage over the powerful use of teenage weaponry, stepped down on Wednesday.

The executive chairman, Kevin Burns, will be replaced by K.C. Crosthwaite, a manager from Altria, the large tobacco company that owns a 35 percent stake in Juul, the San Francisco-based company.

Juul also said it would not fight the Trump administration's proposal to ban most flavored e-cigarettes and would end one of its campaigns, "Make the Switch," which the Food and Drug Administration had criticized as an illegal effort for to make their e-cigarettes safer than traditional cigarettes.

In addition, Altria and Philip Morris International said on Wednesday that they had ended the talks to merge, reducing the chances of reuniting the two arms to what had once been Philip Morris.

The movements were announced in rapid succession during a month of escalating tensions in the market and among regulators, government officials and parents over e-cigarettes and a multitude of hundreds of gun-related illnesses that have spread across the country. Nine deaths have now been linked to lung problems, prompting public health agencies to warn most people to refrain from either nicotine or THC products. Many of the patients have said they had the THC, the high-cannabis ingredient, when they were short of breath and became ill, officials have reported.

Just this past week, Massachusetts announced a four-month ban on the sale of all weapons products; Walmart said it would stop selling all e-cigarettes and F.D.A. announced that it had opened a criminal investigation into the supply chain for weapons products and devices.

In the weeks before, New York and Michigan banned the sale of flavored products, and the Trump administration said it would propose a nationwide ban on flavored e-cigarette products, including mint and menthol.

While no products or ingredient has been blamed for the causes of the diseases, Juul, as the dominant e-cigarette manufacturer in the United States, has faced declining sales and public backlash as to whether it marketed its products to teens. On Tuesday, the company said it was restructuring and would consider reducing its workforce by 3,800 members.

If the Trump administration continues a ban on the most flavored e-cigarettes, Juul officials had estimated that the company's sales would initially be reduced by 80 percent.

Juul had also planned extensive expansion abroad, but efforts in China failed almost immediately, and India last week also said it would ban e-cigarette sales.

In a statement, Philip Morris and Altria said they would instead focus on rolling out the heated tobacco product from IQOS in the United States. They emphasized that IQOS, which Philip Morris International sells abroad, is not "an e-vapor product", unlike Juul's units.

This is an evolving story. Check back for updates.


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