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Early Monday morning, e-cigarette giant JUUL Labs (“Juul”) filed paperwork with the SEC disclosing it raised $325 million in a transaction consisting of an unspecified blend of equity and debt. An unnamed source told Reuters that “Juul sold convertible debt in a bridge financing to bolster its balance sheet.”

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According to the filing, four investors contributed capital to the private securities offering, which took place earlier this month.

According to Crunchbase data, JUUL Labs has raised over $14 billion in combined equity and debt funding to date, the surpassing majority of which came from Marlboro maker Altria Group, which purchased a 35 percent stake in Juul for $12.8 billion.

JUUL Labs is seeking to expand the reach of its nicotine vaporizer products abroad, mostly due to a changing regulatory climate in its home markets.

JUUL Labs isn’t technically allowed to sell its product in the city where it’s based. In June, San Francisco city officials placed a ban on the sale of electronic cigarettes and related products within city limits. The ordinance cites research from the Centers for Disease Control and Prevention (“CDC”) on rising nicotine use among U.S. middle and high school students. The CDC found that the number of underage tobacco and nicotine users “increased 36%—from 3.6 million to 4.9 million students—between 2017 and 2018.”

On a federal level, tobacco and other nicotine products are under the purview of several regulatory agencies. A 2016 federal ruling from the Food and Drug Administration (FDA) and the Department of Health and Human Services (HHS) expanded the scope of tobacco and nicotine products, “but not their accessories,” that are subject to premarket review by regulators. Nicotine-containing gels and liquids, such as those used in electronic cigarettes, are now subject to premarket review by the FDA.

In March 2019, the FDA, HHS, and the Center for Tobacco Products (an office of FDA) issued draft guidance (PDF) on flavored tobacco and other nicotine delivery products. A statement from former FDA commissioner Scott Gottlieb states that some flavored nicotine products like e-cigarette liquids and tobacco cigars “will no longer be sold” as a result of the new regulations.1 He also stated that new flavored e-cigarette products would be subject to premarket review starting in August 2021.

On an earnings call in January 2019, representatives from Altria told analysts that Juul’s 2018 revenue was $1.3 billion and expects to grow sales by 160 percent through the end of 2019. Altria CEO Howard Willard “anticipates 26 percent of [Juul] sales will come from international customers by the end of this year,” according to reporting from Bloomberg.

Nicotine is an addictive chemical that’s difficult to quit. That might be good for Juul’s business, but could lead to negative public health outcomes in a world that was, for a time, seeing declining use of tobacco and its byproducts.

Illustration: Li-Anne Dias