Marlboro cigarette maker Altria Group Inc. (NYSE: MO) and one of its electronic cigarette-maker subsidiaries have filed a lawsuit against nearly three dozen competitors that it contends are routinely breaking both state and federal laws, in an attempt to drive the vape companies out of business.
The defendants – which include brand names Breeze, Elf Bar, EB, EB Create, Esco Bar, Flum, Juice Box, Lava Plus, Loon, Lost Mary, Mr. Fog, and Puff Bar according to a press release – have been making and selling vaporizer cartridge technology that has been used primarily in the e-cigarette sector, but some of the companies have also expanded into the cannabis trade.
Altria has also dipped its toes into the cannabis industry, with a large ownership stake in Canadian marijuana firm Cronos Group, as well as membership in the Coalition for Cannabis Policy, Education and Regulation (CPEAR), a national U.S. marijuana lobbying and reform group. Altria also has a large ownership stake in e-cigarette maker Juul.
The lawsuit, filed in federal district court in California by Altria subsidiary NJOY LLC, alleges that the 34 defendants have been violating a California flavor ban on vape cartridges that went into effect last year and selling federally illegal products. The suit also alleges that they “illegally compete” against rule-abiding companies such as Altria, according to the release. The suit asserts violations of the Lanham Act and the Prevent All Cigarette Trafficking Act of 2009.
“Today there are two markets – one for those who play by the rules and one for those who flagrantly ignore them. We are taking this action because the current state of the illicit e-vapor market is intolerable, and we must see more action from FDA and others,” Altria general counsel Murray Garnick said.
Altria contends that the vapes made and sold by the defendants have not been approved by the U.S. Food and Drug Administration, as Altria’s have been, and that many of the defendants have already received warning letters from the FDA regarding their business operations.
The suit seeks a nationwide injunction to halt the import and sale of all vaping products in question by the defendants, which includes some foreign companies, as well as punitive damages.
The legal action may also not be the last, as Altria seeks to protect its vape market share. The company noted in its release that it may still increase the list of defendant companies and “will consider further litigation” as warranted.