This E-Cig Manufacturer is the First to File Bankruptcy in the Wake of the FDA Regulations

njoy_bankruptcy

The new FDA regulations just claimed their first major victim.

NJOY is one of the most widely known manufacturers of vaping products, primarily cig-a-likes and pen-style vaporizers. On September 16th they officially filed for bankruptcy in Delaware federal court.

The company has been unable to pay it’s debts of $234.4 million, and had been seeking buyers for months. They even hired Barclays in January to help solicit buyers, but had no luck.

While NJOY is one of the biggest names in the vaping world, they chose to throw their weight behind disposable cig-a-likes and vape pens right around the time that mods started to take off and become the most popular way to vape. NJOY continued to bleed cash as the vaping world moved on from the type of products that they focused on. According to court filings, a disposable e-cig called King was one of their biggest flops. Gross sales declined from a peak of $93 million in 2013 all the way down to $7.4 million last year.

The bankruptcy filing is sure to piss off the well-heeled and famous investors who had been pumping cash into the company over the past few years. The prominent investors who were burned by the filing include Sean Parker, famous for co-founding Napster, who invested $10 million in 2013. Peter Thiel, one of the founders of Paypal, was also part of the same funding round that valued the company at $1 billion. At the time, Parker claimed that NJOY had the potential to make cigarettes “and all the harm that they caused obsolete”.  How times have changed. It seems like he underestimated the power of Big Pharma and Big Tobacco.

Who will the next victim be?

 

 

Related Posts

a man pays for items at a checkout

Vape Tax Study: E-Cigarette Tax May Push Smoking

A new vape tax study conducted by a team of researchers from six universities and funded by the National Institutes of Health (NIH) suggests that raising taxes on e-cigarettes to fight vaping may push people back to smoking. The team analyzed scanner data from 35,000 retailers across the country from 2011 to 2017. For every

Read More »
a man wears a surgical mask to protect against diseases like coronavirus

Will Coronavirus Affect the Vaping Industry?

The outbreak of coronavirus in China has infected thousands, killed hundreds, and triggered travel bans. Industry is naturally going to suffer as a result, and some, such as cannabis vaporizer companies, may be affected more than others. The Centers for Disease Control and Prevention (CDC) reports that the coronavirus outbreak, originating in Wuhan City, Hubei

Read More »
Scroll to Top