Kevin Burns is stepping down as CEO of JUUL Labs, and will be replaced by former chief growth officer at tobacco company Altria, K.C. Crosthwaite. The move comes as JUUL is under fire by Congress and federal authorities for its marketing practices targeting youth and claiming its nicotine-containing devices are safer than smoking tobacco.
Despite the former Altria head taking the helm of JUUL, The New York Times reported shortly after the announcement that Altria and Philip Morris International said they ended talks to merge. In April, Altria invested $12.8 billion for a 35% share of JUUL, valuing the company at $38 billion. The investment raised red flags with lawmakers and public health officials alike.
Vape companies in general are also being scrutinized after at least 530 people fell ill – nine of whom have died – from a mysterious vape-related lung injury in recent months.
JUUL also announced it will suspend all advertising and will ease up on its marketing efforts and will comply with requests from the Food and Drug Administration (FDA) to correct violations related to its marketing practices.
“I have long believed in a future where adult smokers overwhelmingly choose alternative products like JUUL,” Crosthwaite said. “Unfortunately, today that future is at risk due to unacceptable levels of youth usage and eroding public confidence in our industry. Against that backdrop, we must strive to work with regulators, policymakers and other stakeholders, and earn the trust of the societies in which we operate.”
JUUL was founded by Adam Bowen and James Monsees in 2015. Burns, who served previously as president and CEO of Chobani, took over as CEO of JUUL. Burns helped JUUL become the most popular vaping company in the United States, with a 72% market share by September 2018.
“Kevin transformed our start-up into a global business, and we are incredibly grateful for his commitment to and passion for our mission,” Bowen and Monsees said.