How Juul became worth $38B | Hacker News Reader

How Juul became worth $38B

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77 pointssoheil100 comments

The big attraction of Juul is delivering cannabinols via vaping.

That is why Phillip Morris (aka Altria) put 18 billion into it.

They plan to combine Juul their vape acquisition and Cronos their cannabis acquisition.

Big cannabis is coming and will dwarf big tobacco...

Weed was the original product from the Juul folks, back when the company was called Pax. Juul was a spin off from that company. The big attraction of Juul is to introduce teenagers to tobacco.

Has Juul done anything to target teenagers? Or is this speculation?

https://www.washingtonpost.com/news/to-your-health/wp/2018/0...

https://www.businessinsider.com/juul-e-cig-startup-marketing...

Anecdotally, they appear to be paying a ton of influencers on social media to advertise Juuls - friends notice it all the time, influencers that specifically almost all have children as their demographic. So they don't have to say they are directly buying ads targetting <18, but indirectly that's a huge amount of their reach.

Fair enough, definitely agree that they shouldn’t be targeting those under 18. Trying to stop your kid from vaping sounds like an exhausting task. Unfortunately, once they start these things seem to hook children well into adult life.

Selling novelty flavors that only children would be interested in could be construed as intentionally targeting teens.

I'll bite - why are novelty flavours only for children?

Not tobacco, nicotine

Not tobacco but nicotine. Just as despicable, slightly less deadly.

Actually a lot less deadly.

I don't think Cannabis would be as big a market as nicotine. Cannabis slows you down and makes you tired. That's great for recreation, but it's not something most people would want to consume every day.

Nicotine is different. It feels good, but you can still go to work after you had your dose.

American pop culture is in an uppers swing right now. Cars, computers, etc are increasingly faster, more powerful.

Appalachia is having a downers problem, and it'll probably spread as people get burnt out and the economy contracts some in the near future.

Time is a flat disk.

Sativa strains are stimulating. Indica is the sedating strain. Indica is usually the type we think of as it grows short and quick, thus common in an age of illegality. Sativa grows about 20 ft tall and yields less. There’s a bunch of other reasons for the dominance of Indica, hybrids, etc but weed doesn’t have to be “sedating”

Lots of people provably want to consume mj every day.

About ten days ago I met the manager of the largest cannabis farm in Washington during a bus trip in Thailand. He said by far the largest percentage of crop they produce is indica, i.e. the strain that can be used as an 'upper', as much as cannabis can be an upper. He also said he steps on more cannabis flowers in a day than most users smoke in a year. Big Cannabis is already a thing.

> Cannabis slows you down and makes you tired

Not quite. Different strains have different results.

I am against making any drugs illegal but shit like this is why we can't have nice things.

Strongly against making drugs with very low potential for harm illegal, but that’s definitely not tobacco related products.

I feel it undermines the logic based argument to legalize recreational drugs. As well, smoking costs 3x the tax revenue from society, coming from single payer, I don’t love paying for people picking up smoking / vaping since the dangers were known.

How's well is that working with meth? Opiates?

I've lost family and friends to both -- they were not "protected from themselves"

Lost my mother to alcohol, which is legal and kills 10s of thousands in the US each year.

I don't have an easy answer, but I do know that our current approach is wrong.

So why are you against making this kind of crap illegal? Why are we doing everything we can to protect society from terrorism, but not so with thousands of car deaths due to alcohol consumption?

Or Sugar. Sugar actually kills.

Corn kills. Sugar is typically high fructose corn syrup in America.

Does it matter? How quantities of any kind of sugar (whether it be in the form of carbs or fructose) are really bad for you.

Don't tell me you're one of those that thinks sugar from whole fruit is bad for you?

Sugar is sugar.

Having said that, as fruit also contain fiber and other things it would be hard to ingest an unhealthy amount if that was your primary source of sugar. It's also why all-natural fruit juices are as bad (or worse) for you as soft-drinks.

You mean like how Steve jobs killed his pancreas and himself by eating only fruit?

Your naturalistic fallacy aside, modern fruits ate not natural; they have been genetically engineered to be as sugary as possible.

LOL, the Steve Jobs argument. He's the goto scapegoat whenever someone wants to spread falsehood on raw foods, fruits in particular.

He wasn't fruitarian. In his early years (20s) perhaps more so, but in the years before his cancer was discovered he was known to consume lots of vegan junk food and processed foods, oils and salt - his body was massively acidic. In the couple years before his death he ended up consuming a lot of dairy and excess protein - both killers and horrible to the human body.

So one semi-fruitarian dies, fruits are evil.

Millions of people die from diets that consist heavily of processed meat, soda, dairy, excess protein, processed sugar and other garbage - nothing to see here.

Wait I’m confused,

Weed: killed few people Opiates: killed many people

I’m saying 1) should be illegal and 2) should not

How you actually treat criminals however, totally for the Nordic model, not the USA model.

I read the parent post as highlighting the fact that the illegality of opiates/meth is not helping to protect people from them.

Perhaps the implication is that we need other solutions aside from making things illegal.

Opiates aren't a catastrophe because they are illegal, they are a catastrophe because government prosecutes the victims and not the perpetrators (manufacters/dealers).

When my brother overdosed on heroin he was shooting up unknown quality/potency. If he was using legal dope he'd likely not have made that mistake.

I agree with the government victimization but legal drugs implies purity and labeling requirements to allow choices to be better informed.

There is no safe dose of heroin.

It doesn't matter how pure it is if you can buy enough to kill an elephant at they grocery store.

> There is no safe dose of heroin

Not true at all. One could safely be a long-time heroin addict with a supply with guaranteed purity and strength. Not a recommended lifestyle, but it's true.

It's still an advantage if you only overdose on purpose and not by accident too.

Legality of alcohol doesn't protect either.

That was my intent.

> I don’t love paying for people picking up smoking / vaping since the dangers were known

Are the dangers of vaping known tho? Is there any study that shows it causes physical damage like inhaling smoke from a burning cigarette? Is seems fairly obvious to me that inhaling vegetable glycerin and nicotine does not cause any harm. The only "problem" is the nicotine addiction, but that one does not cause any physical harm, it just costs money to buy refills.

> Is seems fairly obvious to me that inhaling vegetable glycerin and nicotine does not cause any harm.

Why is that obvious? Lungs evolved to absorb oxygen not vegetable glycerin or propylene glycol. In fact there is some evidence that it may be harmful to protective cells in the lung walls, potentially increasing the risk of lung inflammation[1]. Obviously we'll have to wait 30 years to know of any long-term effects, but maybe common sense would be a better life decision if you don't want to be a test subject.

I would also suggest that there is a risk of cheap e-cigarettes causing even more serious harm because they might have contaminants in the fluid being inhaled.

[1]: https://thorax.bmj.com/content/73/12/1161

> https://thorax.bmj.com/content/73/12/1161

Thank you I didn't know about this.

‘Seems fairly obvious’ is just about the most useless qualification you can make up for this. Nicotine is poisonous, it seems fairly obvious that ingesting it causes damage.

Unsurprisingly, even though e-cigarettes and friends haven’t been on the market for very long, the data already shows it’s harmful. It causes development issues in children, fertility problems in women, blood pressure and heart problems for everyone. And that’s what we know now.

It’s only less harmful if you compare it with smoking.

The dangers of vaping are unknown, however the fear is that once hooked on Nicotine users may switch to cigarettes.

Vapes like Juul are also way easier to consume to excess, for reasons the OP explains.

> As well, smoking costs 3x the tax revenue from society,

Source? Are you sure it's not 5x or 10x? Because all of the evidence I've ever seen says smoking cost society less - smokers die sooner. [1]

[1] - https://www.nytimes.com/2008/02/05/health/05iht-obese.1.9748...

I’ve also heard that smokers cost society less because they die earlier.

Here’s a Dutch report:

https://www.nytimes.com/2008/02/05/health/05iht-obese.1.9748...

We absolutely do not know the dangers of vaping... what dangers exactly are there? Apart from increasing your heart rate it doesn't seem to be responsible for much harm at all.

Several flavours are linked to lung damage.

> Several flavours are linked to lung damage.

If this is the case, then some flavors are dangerous, not vaping in itself.

There was a study recently showing that vaping negatively affects protective cells in lung tissue which may result in lung inflammation[1]. Their results were not related to flavours -- they specifically used flavourless fluid, instead they were concerned with vegetable glycerin and propylene glycol (the primary components of e-cigatette fluid).

Obviously vaping is preferable to smoking, but I have serious doubts that inhaling air isn't preferable to vaping.

[1]: https://thorax.bmj.com/content/73/12/1161

But see also the diacetyl "butter" flavours (and also "popcorn lung") https://motherboard.vice.com/en_us/article/ypwadv/how-butter...

I bought my first e-cigarette the other day from a local smoke shop. I am switching to vaping as a way to quit smoking after 10 years. Anyways, I saw the juul cigarette for more than double the price of all the other normal e-cigarettes on the shelf and the capsules themselves weren't cheap. I obviously went with the less flashy eco vaporizer and bought the liquid in the bottle. Cost me $30 in total and still using it 3 months later.

My point is that I didn't any reason to buy the juul other than brand. The competitors are significantly cheaper and more customizable(i guess). I believe much like gopro, juul going to tank at some point. They are very overvalued here.

Let me try:

"[Apple's] competitors are significantly cheaper and more customizable(i guess). I believe much like [the iPhone], juul going to tank at some point. They are very overvalued here."

I wouldn't say you're incorrect about them tanking, but I would argue that they're more Apple (sleek, sexy, status symbols) than some other segment leader.

The difference is that apple makes a arguably different product than its competitors; android marketplace is still lacking in quality in comparison to apple store, ios is more seamless, the apple ecosystem is the strongest out there etc.

Juul is simply packaging e-vap in a fancy wrapper and charging double of what their competitors are charging. It's silly to make the comparison.

"Juul's competitors pod selection and ease of use is vastly inferior to their own. The experience of not having to fiddle around with settings to get the vape to work is refreshing when compared to the competition."

The article specifically mentions network affects like being able to plug your pods into someone else's stick if yours is out of battery.

Google Play (Android Market was renamed in 2012) has pretty much the same selection as the App store.

"Apple is simply packaging Samsung components in a fancy wrapper and charging double what the competitors are charging."

Apple makes cellphones. So does everyone else.

Apple is overvalued also, they are getting corrected by the market now though.

You’re pretty much paying for convenience and consistency. Juul is not the greatest or cheapest way to vape. But it is the lowest-time-commitment way to vape (pod systems are no fuss, and then juul has both brick-and-mortar footprint along with online maturity that rivals don’t have and can’t be built overnight). And every pod is going to roughly smoke the same.

This isn’t going to break down the same way for every vaper, but there is going to be a large (probably majority) marketshare who this appeals to. I think the Altria deal hints at the next phase which is probably to leverage lobbying and government to build a regulatory moat.

How is it we allow people to make money from hacking human brains...

It isn’t going to end well. Society will pay, just like it did and continues to do for tobacco.

One could argue that many social media companies are doing the same. The net psychological effects of gamification and engagement hacks are yet to be very well understood.

>How is it we allow people to make money from hacking human brains...

Sugar.

Advertising. Loot crates. Social media.

Yeah, we barely allow people to make money on anything else than hacking brains.

Casinos. Pornography.

Um, by marketing an extremely addictive drug to children and young people?

That’s what tobacco did in the past, and are doing again now.

Eh. Not quite the same. And it wasn't marketed to children. Apparently there's just something about blowing smoke and age restriction that is cool to teens. It is almost as if Juul was sought after by them.

Also, it isn't tobacco that is the big driver of juul sales. Weed is. And we've had a multi-decade marketing campaign about how weed carries no negative side-effects by large swaths of the population. I got shellacked on this forum when I tried to argue that it isn't normal for kids to smoke weed (apparently it is perfectly normal for kids to 'experiment'). Juul didn't do that.

Tobacco is an industrial product. It's only amenable to industrial cultivation at scale, because of the biology of the tobacco plant. It's not feasible to grow and process enough tobacco yourself to sustain a habit. This is why big tobacco made such a gigantic pile of money in the last 100 years. But now Americans don't smoke cigarettes anymore.

The thing about weed is that it's not an industrial product. A 15 year old can easily grow enough weed in his bedroom to keep himself constantly high. This is Really Bad for profits.

So Juul is valuable because big tobacco sees an opportunity to revive tobacco sales aka nicotine Juul cartridges, while also replacing soon-to-be-legalized ordinary marijuana with weed-themed Juul cartridges. It's a two-pronged strategy.

> A 15 year old can easily grow enough weed in his bedroom to keep himself constantly high. This is Really Bad for profits.

I see this repeated a lot, but I have a very hard time believing it matters at all. It’s just as easy to grow tomatoes and the result is significantly cheaper and tastier than what you can buy in stores, yet I doubt anyone would say tomatoes are significantly less profitable because of it. Even in my own state where growing weed is legal I’ve heard of exactly one friend who grew their own, and that was a one time novelty rather than a real supply.

The reality is that the vast majority of customers prefer the convience of pre-packaged and pre-portioned weed products over the cost savings of growing. In fact, if anything the trend is towards more convenice (edibles, single dose vapes, delivery services) rather than away from it. The profit impact of those who do choose to grow will be extremely tiny.

I've had several friends that grow weed, from pretty sophisticated (albeit <5 plant) hydroponic setups to "guerrilla grows" (tossing seeds into areas unlikely to be discovered and later coming back to check/harvest). It's a lot easier than most home garden produce by a long shot, in my opinion. There is even a book called "The $64 Tomato" that details how difficult that particular fruit is to grow.

Even if the actual growing isn’t hard, you need to plan it months in advance and there’s work involved in setup and harvesting. That’s far more inconvenient than just opening an app or driving to the store. It can also be risky (there are still plenty of confusing rules around growing for personal use, and guerrila growing is illegal) and even meticulously attended plants have variable yields. The only way for it to substantially affect profits is if a non-trival portion of customers prefer the cost savings to inconvenience, and, imo, the evidence points strongly against this. Heck, at my local despensery pre-rolls far outsell flower and the only work involved there is grinding and rolling!

Also, I haven’t read that particular book, but the growing difficulty depends on the variety. I can personally attest that growing cherry tomatoes is extremely easy (they’re commonly recommended as a “beginner” plant.)

That's a really good point about pre-rolls. I agree that homegrown weed is no more of a threat to dispensaries than homebrewed beers are to Budweiser.

>Apparently there's just something about blowing smoke and age restriction that is cool to teens.

Yes this explains why they try it or start using it but you can't deny that nicotine will keep them coming back and that is something we shouldn't want. We're just getting a bit of success in a multi-decade battle against cigarettes.

"Also, it isn't tobacco that is the big driver of juul sales. Weed is."

What do you mean by this? Juul doesn't sell weed products and is hugely successful because it has made nicotine addiction easier + more accessible (which is part of what the article argues).

PAX labs owns the Juul brand and also sells weed vapes (under the PAX brand.)

Juul was spun-off from Pax (unclear to me if Pax still owns a portion of it). And Juul's nicotine is the "big driver" of Juul's sales, not weed (as the commenter above claims)

I have a friend who works at a competitor and according to him PAX still owned a majority after the spinout. Although, I tried looking it up and Philip Morris just bought a 35% stake, so this may no longer be true.

> Juul's nicotine is the "big driver" of Juul's sales, not weed

I agree, just trying to clarify that (at least at one point) the company that owns Juul also sold weed vapes.

Ah interesting to hear, thanks! Guess it would've been a pretty big ball-drop to not continue to own a piece

Kids but juul (not marijuana) becausee people like marijuana?

But an article I read on the internet said it was true!

"How drug dealers are getting rich"

I tried nicotine toothpicks and they just made me feel sleepy and didn't give any neurological benefits. I don't really see why nicotine is popular at all.

Caffeine, P5P, D-Ribose, Astragalus, Turmeric... etc. are way better natural stimulants/nootropics. I guess people don't smoke for the same reasons that I take supplements.

Most turmeric research has been found fraudulent.

From Wikipedia:

> Bharat Aggarwal was a cancer researcher at the University of Texas MD Anderson Cancer Center, who as of April 2018 had 19 papers retracted for research fraud.[18][19] Aggarwal's research had focused on potential anti-cancer properties of herbs and spices, particularly curcumin, and according to a March 2016 article in the Houston Chronicle, "attracted national media interest and laid the groundwork for ongoing clinical trials".

Unrelated but Turmeric often contains elevated levels of lead compared to other spices. Source: https://www.cdc.gov/mmwr/volumes/67/wr/pdfs/mm6746a2-H.pdf

Psychoactive drugs have different effects on different people.

For me, caffeine is the drug that does not really do anything (higher doses in the 300mg+ range are definitely noticeable, but mostly by the physical side effects). Nicotine chewing gum produces a short-lasting mild stimulation (and I have to take a 4mg one, even though I am a non-smoker).

I wonder if some people are predisposed to nicotine while others aren't.

I also tried to smoke, felt nothing good. Hot fire stick that dries out my throat for zero benefit. And I mean zero. I'd look at my friend and be like "WTF is the point of this again?"

But it wouldn't surprise me that other people do feel something.

The first time I smoked I felt the same: nothing good. But eventually I got hooked. You become addicted and feel terrible while not on it. Once you're on it, you're good to go for a while again. (I eventually managed to quit.)

I only tried smoking when drunk and the effect was to make me dizzy, like I’d been spinning on a roundabout too fast.

That effect is normal the first time(s) you smoke. It goes away eventually. The alcohol probably made it worse, or more uncomfortable. Either way, good on you for not starting. I succeeded with not starting various times, but did fail eventually. Growing up with a mother who smoked (did quit too though) who's also my main parent did not help.

I tried smoking when drunk, the effect is I feel more alert and less dizzy.

I've done many drugs in past:

Marijuana, cocaine, heroine, vaping, estasy and did it like a month with friends but i don't feel any addiction.

I did feel some effect but never felt addicted.

But i am addicted to peanut butter, the i don't have atleast one spoon i feel very bad whole day.

So, a serious question. Do you need to do something for longer duration (more than a month?) to get addicted to these drugs?

It's because I have been putting nicotine in your peanut butter.

Nicotine is biologically addictive.

I've quit smoking a couple of times. The hardest part is the first few days: I get really irritated and angry, and I know that I would just need one cigarette to feel alright again. After a few days, the effect wears off, and I feel normal again.

In the long run, the hard part is resisting the urge to start smoking again. There is always some situation where it's so tempting to light a cigarette...

[citation needed]

According to https://www.gwern.net/Nicotine, nicotine itself doesn't seem biologically addictive in a significant way. Only when mixed with other substances in tobacco, the addiction potential manifests itself.

You just don't respond the way that most people do to nicotine. Not every body and brain responds the same way to drugs.

They really misuse the phrase "virality" over and over here. There's nothing beyond word of mouth spreading it from one user to another. It's more UX that's impressive.

Ok, we've reduced the title above to the salient point.

Flagged for just being native advertising, considering how often the brand is mentioned (most of the article applies to all e cigarettes)

A profile of a successful company by an independent journalist is not advertising.

It’s actually an entire category of journalism, and happens to be the genre TechCrunch is known for.

But seriously though, JUUL is the rocket ship I wish I could put my money in.

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