Looks as if the company behind Marlboro is ready to dive further into the booming e-cigarette market. Altria Group Inc. (MO - Get Report) is negotiating buying a stake in Juul Labs Inc., according to a report in the Wall Street Journal.
Juul is the wildly popular California startup making smokeless nicotine vaporizers. The company has also come under scrutiny from public health officials.
News of the report, which named no sources and cautioned that the deal was not imminent, sent shares of Altria up slightly, rising by nearly 2% in morning trading.
"We do not comment on rumors and speculation," Altria spokesman Steve Callahan told TheStreet.com in an email when asked about the investment by phone.
The plan, if true, comes just a month after tobacco giant Altria temporarily cut sales of its pod-based electronic cigarettes over public health concerns that teens and kids were using the products to get a nicotine fix by "vaping." It also follows the Food and Drug Administration crack down on sales of flavored e-cigarettes to minors online and in stores. The Centers for Disease Control and Prevention has even singled out Juul recently for its popularity among teens.
Since forming in 2017, Juul has pulled in some $761 million in funding from investors such as Tiger Global Management and Timothy Davis, according to Crunchbase.com.
Buying a stake in the company would give Altria - known by its traditional brands and companies such as Philip Morris - greater access to the growing smokeless cigarette market.
But it would also no doubt add to controversy over vaping, as Altria had just directed its Nu Mark company to stop sales of its "cig-a-like" products, such as its MarkTen Elite and Apex by MarkTen pod-based e-cigarettes, and limit its lineup of products to only those with tobacco, menthol and mint.
In October, the CDC announced that as sales of Juul e-cigarettes "skyrocket" they are threatening the health of youths.
"Use of JUUL by youth in schools, including in classrooms and bathrooms, has been widely reported. Most e-cigarettes contain nicotine, and JUUL contains among the highest nicotine content of any e-cigarette on the U.S. market. Nicotine is highly addictive and can harm a child's brain development, which continues into the mid-20s," wrote the CDC.