In trading on June 22, Altria Group, Inc. (MO) stock fell 9.19 percent to $41.5. The revelation of the impending prohibition of nicotine in the US was the cause. The scope of this issue is far wider, though, since a brand-new element has emerged that is not yet receiving much attention.
The US Food and Drug Administration (FDA) will prohibit Juul electronic steam generators from being sold in the US, according to The Wall Street Journal on Wednesday, June 22. This clearly had a negative impact on Altria Group, Inc. (MO), which in 2018 paid $12.8 billion to purchase a 35 percent ownership in Juul.
With more than $1 billion in revenue yearly, this brand was the largest source of income in the US. to remove oneself from tobacco and standard smokes.
Juul has, however, drawn criticism for being used by schools in US media. This is hardly unexpected given that Juul steam generators are the most often used in the US, are widely available, and are therefore more readily available to teens. However, this popularity turns out to have a negative side, thus Juul could be the first to tighten regulations.
Since Juul already lost ground to other brands with a lineup of fruity and other flavors last year, it is doubtful that this will have an impact on the issue of steam generators in schools.
In terms of legislation, there is a broad movement in the US toward outlawing nicotine. The US presidential administration declared its plan to outlaw practically all nicotine in cigarettes and vaporizers on Tuesday, June 21, 2022. Although experts discuss the demise of the tobacco business, nicotine has long been the lone participant in this field.
Data from the National Youth Tobacco Survey (NYTS) from 2016 found that about 9% of young people aged 9 to 19 used marijuana, while 30% of them used steam generators. Since then, no significant research has been done, however, a 2018 poll revealed that one in ten high school students in the US utilized steam generators to consume cannabis.
Surveys also revealed that 63% of youngsters had no interest in Juul steam generators at all if they included nicotine. Additionally, according to data, the proportion of youths who smoke ordinary cigarettes for the first time has reduced from 70% in 1991 to 28% in 2017 as a result of steam generators.
As a result, it is doubtful that Juul or nicotine will be outlawed by the conclusion of this tale, but Altria Group, Inc. (MO) stock will need to invest heavily in marketing to boost sales.