Big Tobacco’s Altria’s billion-dollar investment in vape giant JUUL appears to be going up in smoke. Less than a year after Altria paid $12.8 billion to purchase a 35% stake in JUUL, the company recorded a $4.5 billion third-quarter write-down on the investment. The news comes amid a vaping health crisis and a regulatory crackdown on the vaping industry as a whole.

JUUL has been rattled in recent months. In July, JUUL Labs co-founder James Monsees testified before the House Subcommittee on Economic Consumer Policy of the Committee on Oversight and Reform regarding concerns raised about the company’s role in youth nicotine addiction. During the hearings, the company was criticized for sending a representative to a ninth-grade classroom in 2017 and telling students its vape products were “totally safe.”

In September, JUUL Labs CEO Kevin Burns stepped down and was replaced by K.C. Croswaite, Altria’s chief growth officer. The company also announced it would remove flavored e-liquids from the market after receiving a warning letter from the Food and Drug Administration (FDA)’s Center for Tobacco Products questioning its marketing practices, specifically its advertising saturating social media channels frequented by underage teens. The agency also chided the company for illegally advertising its nicotine pods as a safer alternative to cigarettes.

Altria stock is down more than 5% this year, but the company is hoping to rebound by diversifying with a majority stake in an oral nicotine pouch and a 45% stake in a Canadian cannabis company. Altria also said it will move forward with plans to sell iQOS, a Phillip Morris-brand vaping product that uses tobacco.

Altria’s write-down comes amid growing concern of an outbreak of lung injury linked to vaping products. As of Oct. 29, 2019, there have been 1,888 cases of “e-cigarette, or vaping, product use associated lung injury” or EVALI, including 37 deaths. Cases of lung injury have been reported in every state except Alaska, as well as the District of Columbia and one U.S. territory, according to the Centers for Disease Control and Prevention (CDC). Forty percent of those sickened are between the ages of 18 and 24, and 14% are younger than 18.

Beasley Allen lawyers Joseph VanZandt and Sydney Everett, together with Mass Torts Section Head Andy Birchfield, are currently representing several individuals who are suing JUUL for the negative impact its products have had on their lives. On Oct. 7 they also filed lawsuits on behalf of school districts in three states, which seek to protect students and recover resources spent fighting the vaping epidemic.

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