Juul to lay off 500 people, founders lose billionaire status, company under criminal investigation, and now California is suing them
2019 has been a rough year for the chic-vape business
Adam Bowen and James Monsees met over smoke-breaks between study sessions at Stanford University. The two would go on to found Juul Labs together, one of the most successful (and controversial) vape product companies on the market, and one that would get them listed on the Times 100 most influential people of 2019.
Juul vapes are slicker, more stylish, cooler and more futuristic looking than any other vapes on the market — which ended up working against their favor. Juuls fell into the hands of teens (who loved them) and the company made the fatal error of leaning into that. They started marketing towards the youth, pushing flavors that would appeal to them and even funding education campaigns in high schools that misled kids into believing that vapes were not harmful in any way to their health.
Between 2018 and 2019 the company exploded. By 2019 the company’s Market Insider valuation was at $38 billion. Bowen and Monsees’, those two old smoke buddies stepped up into the exclusive three-comma-club — they were billionaires.
For a few months anyway.
Then shit hit the fan and seemingly all at once. Vape related illnesses and deaths started happening all over the country, congress held a hearing on Juul, counties and states started banning flavors and even banning vaping entirely, the California supreme court opened a criminal investigation into Juul, the company’s net worth plummeted by $14 billion. Bowen and Monsees’ billionaire statuses were revoked (today those peasants are only worth $900 million apiece).
And now, California is suing them. According to the Centers for Disease Control, between 2017 and 2019 the rate of high school students using e-cigarettes rose by 78-percent — and the state of California alleges that Juul is largely responsible for that. They say that Juul unfairly targeted kids with advertising and sold Juul products indiscriminately to minors, fulfilling thousands of online orders to clearly phony names/individuals, including 17 separate orders from someone named “Beer Can.”
“We’ve worked too hard, committed our hard-earned money for too long combating harmful tobacco use to stand idly by as we now lose Californians to vaping and nicotine addiction,” California’s state attorney general Xavier Becerra said at a news conference. “Juul adopted the tobacco industry’s infamous playbook, employing advertisements that had no regard for public health and searching out vulnerable targets.”
Things are not looking good for this explosively popular vape business. Which is likely why their CEO, Kevin Burnes resigned in September, and why the company has stopped advertising in the US entirely.
It’s also likely why Juul has announced that they are executing a restructuring plan. By the end of 2019 they will be laying off between 10- and 15-percent of their employees — around 500 people.
Clearly, 2019 has been a rough year to be in the business of vape products. And not just because of the scrutiny surrounding who these companies advertise to, but also because of the still-climbing number of deaths related to vaping. All year long, people across the country have been falling ill and dropping dead because of something to do with vape products. No one knows exactly what, although there are a lot of theories out there: that black market vape cartridges are cut with chemicals or heavy metals; that cheaply made cartridges are releasing metal-fumes that people are inhaling; that oils in the e-liquid are adversely reacting inside of people’s lungs.
But there’s no smoking gun — no one knows WTF is going on. Not yet at least.
What will become of Juul? The company is still worth $24 billion, and their sales in places like Europe haven’t taken much of a hit. The founders still own it, and realistically, they’ll probably be back in that three-comma-club in the not-so-distant future.
Sure, their products might be harder to find, and their advertisements fewer and further between. But it’ll take more than that to sink a business that’s already hooked itself to so many nicotine-addicted customers.