Vaping Concerns: Juul's CEO Stepping Down As E-Cigarette Company Stops Advertising
BOSTON (CBS/AP) -- Juul is shutting down broadcast, print and digital advertising and ending lobbying efforts on behalf of the e-cigarette in Washington as safety concerns intensify. The moves come one day after Massachusetts Gov. Charlie Baker declared a public health emergency and ordered a four-month ban on the sale of vaping products in the state.
The company on Wednesday said its CEO was stepping down and will be replaced by a senior executive from Altria, the maker of Marlboro. Altria took a 35% stake in Juul in December at a cost of $13 billion. Also on Wednesday, Altria and Philip Morris announced that they are calling off merger talks.
Juul has long pushed its e-cigarettes as an alternative for adults looking to wean themselves tobacco products. But e-cigarettes have become popular among teenagers, and illnesses potentially liked to the product are on the rise.
On Tuesday, Baker said he was enacting the ban because of the "rapidly increasing number of vaping-related illnesses that in some cases have led to death." There have been 61 reported cases in Massachusetts.
"We as a Commonwealth need to pause sales in order for our medical experts to collect more information about what is driving these life-threatening vaping-related illnesses," Baker said.
Three confirmed cases and two probable Massachusetts cases of vaping-associated pulmonary disease have been reported to the U.S. Centers for Disease Control and Prevention.
A notice on Juul's website states "To comply with state and local laws, we cannot ship to addresses in Massachusetts."
JUST IN: The CEO of @JUULvapor is stepping down.
— CBS Mornings (@CBSMornings) September 25, 2019
Kevin Burns had faced a storm of controversy over the vaping product, denying to @TonyDokoupil in a @CBSThisMorning interview that Juul targeted teenagers. ➡️ https://t.co/Vf0RFcAWGa pic.twitter.com/hQFEzVZdez
Altria Group Inc. said that K.C. Crosthwaite will become JUUL's new CEO, replacing Kevin Burns. Crosthwaite served as Altria's chief growth officer.
Altria and Philip Morris said last month that they were in discussions to become a single company, more than a decade after splitting into two as lawsuits mounted.
Altria has exclusively sold Marlboro cigarettes and other tobacco brands in the U.S., while Philip Morris has handled international sales.
Philip Morris International Inc. CEO André Calantzopoulos said Wednesday that the companies will instead focus on launching IQOS in the U.S. IQOS is a heat-not-burn cigarette alternative made by Philip Morris.
It was Crosthwaite, who will take over Juul, who headed the development of IQOS.
Altria's stock climbed 3.5% before the market opened, while shares of Philip Morris jumped 7.7%.
(© Copyright 2019 CBS Broadcasting Inc. All Rights Reserved. The Associated Press contributed to this report.)