Juul Labs chief executive Kevin Brown is stepping down from the leadership role in the company, making way for a longtime tobacco executive from the company’s largest shareholder, Atria, to take the reins.
The move comes as Juul faces extreme scrutiny from U.S. regulators over the company’s marketing tactics and a possible ban on some of its best-selling products. As part of the announcement today, Juul has agreed to suspend all of its marketing, advertising and lobbying efforts in the U.S., which were a target for criticism.
The man taking over from Burns is K.C. Crosthwaite, who previously served as the chief growth officer at Altria Group and oversaw the company’s expansion into electronic cigarettes with the launch of its IQOS brand. Crosthwaite also served on the Juul board of directors as an observer.
“I have long believed in a future where adult smokers overwhelmingly choose alternative products like JUUL. That has been this company’s mission since it was founded, and it has taken great strides in that direction,” said Crosthwaite in a statement. “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.”
With Burns at the helm, Juul grew from a few hundred employees to over thousands of staff members working in 20 countries around the world. The executive also advocated for raising the legal age of smoking to 21, halted the sale of non-tobacco and non-menthol-flavored Juul pods to brick and mortar retailers, enhanced online age verification and discontinued Facebook and Instagram accounts (in the U.S.).
The steps may not be enough to alleviate the concerns of regulators and lawmakers over Juul’s sway over underage e-cigarette users. The company commands roughly 70% of the e-cigarette market for tobacco products and remains the de facto brand for all vaping (in the same way that Google is the brand for online search).
Juul’s role as a smoking alternative may also be challenged by startups (like Hava Health) that are developing vaporizer technologies for smoking cessation.
“Working at JUUL Labs has been an honor and I still believe the company’s mission of eliminating combustible cigarettes is vitally important. I am very proud of my team’s efforts to lead the industry toward much needed category-wide action to tackle underage usage of these products, which are intended for adult smokers only,” said Brown in a statement. “Since joining JUUL Labs, I have worked non-stop, helping turn a small firm into a worldwide business, so a few weeks ago I decided that now was the right time for me to step down. I am grateful to be able to confidently hand the reins to someone with K.C.’s skill set, which is well-suited to the next phase of the company’s journey.”