Tobacco giant is nearing a deal to take a significant minority stake in e-cigarette company Juul that could come as soon as Thursday, people familiar with the situation tell CNBC.

Altria is set to take a 35 percent stake in Juul that would value the e-cigarette maker at $38 billion, the people said. The people familiar cautioned negotiations remain in flux. It is possible deal talks could extend beyond the next few weeks. It is also possible the deal falls part.

Should the deal be consummated, it would mark a turning point for Juul. The company has positioned itself as an , helping to wean adults off combustible cigarettes, which are responsible for killing about half a million Americans every year. But a surge in high school students using e-cigarettes, mainly Juul, has challenged that posture. It is widely thought these teens would have never smoked, but are being introduced to addictive nicotine by vaping.

U.S. regulators have cracked down on Juul's use of fruity flavors, which they say encourages teen use. With this pressure, Juul has started facing some of the same regulatory and financial pressures that Big Tobacco has dealt with for decades. A deal with Altria could bring that institutional knowledge.

In Juul's negotiations with Altria, it is seeking a number of conditions from the tobacco giant the could mitigate the potential reputation stain of selling a stake to a party it once labeled the enemy, the people familiar said. If successful, these conditions could mitigate some of the reputational stain that would come with selling a stake to a party it once labeled the enemy.

Some demands have included giving Juul top shelf space and adding Juul coupons to cigarette packs, the people said. Altria owns best-selling cigarette brand, Marlboro. It could not be immediately determined which if any of these stipulations Altria has or will agree to.

Should Altria announce a deal with Juul this month, it would be its second transformative investment in as many weeks. $1.8 billion for a 45 percent stake in Canadian cannabis company, . Altria also said as part of its Cronos announcement it will discontinue MarkTen and Green Smoke e-cigarette products, citing their financial performance combined with heightened regulatory restrictions. Outsiders viewed the move as clearing the way for Juul.

Both deals could provide Altria with new sources of revenue as its main business shrinks. Cigarette volumes have started declining faster than anticipated, threatening Altria's usual tactic of raising prices to offset the declines. That wouldn't be as big of an issue for Altria if it still profited when people switched to Juul pods from Marlboro cigarettes.

The people requested anonymity because the information is confidential.

Juul and Altria declined to comment. Altria has previously said it does not comment on speculation.