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Tobacco company Altria is getting close to taking a 35 per cent stake, which would value Juul at US$35 billion, making the electronic cigarette company one of the most valuable private companies in the United States. (Wall Street Journal)

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Talking point: Juul’s valuation would make the three-year old company worth US$4 billion more than Airbnb and three times more than Pinterest. The company has about 1,500 employees and US$2 billion in annual revenue. Some of that revenue comes from Juul’s popularity with children, who report enjoying the different flavours offered by the company and the ability to surreptitiously smoke in school (although administrators are trying to crack down). Last month, the U.S. Food and Drug Administration decided not to ban the sale of flavoured e-cigarettes, which would have been a blow to Juul.

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The move is part of an action plan issued Thursday by eight government bodies to quell the “distinct increase” in e-cigarette use among teens. Last week, the country also banned all online sales of vaping products. (Bloomberg)

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Talking point: China’s e-cigarette market grew from an estimated US$451 million in 2016 to US$718 million in 2018. Losing the country’s online market and limiting the convenience of vaping could stymie that growth. The announcement follows a ban on the production, import and sale of e-cigarettes in India, another significant growth market for the vaping industry. And on Wednesday, U.S. Rep. Mark DeSaulnier introduced a bill to ban e-cigarette sales nationwide until the Food and Drug Administration completes pre-market reviews of the products. The threat of sweeping new regulations has rocked industry leader Juul, which lost US$14 billion in value after tobacco giant Altria wrote down its US$12.8-billion investment in the company by US$4.5 billion. The regulatory crackdown comes amid rising youth vaping rates and more people falling sick from a mysterious lung injury linked to vaping—as of Tuesday, 2,051 cases were reported, including 39 deaths.

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Surveys of nearly 100,000 Canadians ages 11 to 25 found an overall increase in youth vaping rates between 2014 and 2017—before federal laws were enacted banning sales to minors. Provinces that prohibited e-cigarette sales to minors during the test period saw a 4.4 per cent increase in youth vaping, compared to a 9.7 per cent increase in provinces without bans. (The Logic)

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Talking point: Hai Nguyen, the study’s lead researcher, suggested that banning flavoured e-cigarette products, among other measures, would be a more effective way to reduce youth vaping than simply banning sales to minors, noting that kids find other means of accessing the products. Meanwhile, Reuters reported on Tuesday that industry leader Juul Labs—which claims its target market is adult smokers trying to quit—knew soon after launching products that kids were getting addicted to its products, but didn’t change course. The company is now facing intense pressure from regulators and investors—last week, tobacco heavyweight Altria wrote down its US$12.8-billion investment in Juul by US$4.5 billion.

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The prohibition was removed from a planned 2015 rule that gave the Food and Drug Administration oversight of e-cigarettes after the Obama administration’s Office of Management and Budget (OMB)—which assesses the economic impact of new regulations—consulted with more than 100 people over 46 days. That included 44 meetings with tobacco company lobbyists. (Los Angeles Times)

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Talking point: Cecilia Muñoz, a former White House official, said that at the time, the “science wasn’t clear” on the effects of flavours on youth vaping. Since flavours made up a significant portion of vaping sales it would be unfair to stop businesses from selling them, she said. But the final rule excluded 15 pages of supporting documentation on how flavors affected youth vaping rates. The FDA is once again planning a ban on flavoured vaping liquids, but this time President Donald Trump is backing the move. And while tobacco giant Altria opposed the rule in 2015, Juul, in which it made a major investment, has promised not to lobby the government this time.

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AnitaB.org, the tech organization behind the conference, said Palantir enables human rights abuses of asylum seekers. Palantir provides and maintains software used by U.S. Immigration and Customs Enforcement (ICE) to screen migrants and conduct raids; the firm renewed a US$50-million contract with the agency earlier in August. AnitaB’s move follows a petition calling for the drop by a group called NoTechForICE; it had 337 signatories at the time of publication. The petitioners continue to demand that AnitaB cuts partnerships with organizations that work with ICE, including Amazon and Microsoft. Palantir has not commented on the decision. (The Logic)

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Talking point: The Grace Hopper Celebration is the world’s largest conference for women in computing: in 2018, it drew 20,000 attendees from 78 different countries; past speakers have included Anita Hill and Priscilla Chan, co-founder of the Chan Zuckerberg Initiative. It joins a growing chorus of groups calling on tech firms like Palantir to halt their work with ICE, including some Palantir employees. At least two employee letters have circulated within the company that criticize its business with the agency, but CEO Alex Karp continues to defend the contracts, citing his commitment to working with the U.S. government, whose immigration policy he has described as “fair but rigorous.” AnitaB has a history of cutting sponsors it deems out of line with its values. In 2017, it ended a partnership with Uber over the latter’s treatment of women employees. Following that— and mounting pressure from advocacy groups—Uber CEO Travis Kalanick resigned. Most of the Palantir criticism has been focused in the U.S., but the company is expanding significantly in Canada. In June, my colleague Murad reported that the firm had inked a million-dollar contract with the defence department. That was the first time the federal government had admitted working with the company. And, earlier in August, David MacNaughton, Canada’s ambassador to the U.S., announced he was leaving his diplomatic post to join Palantir.

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The Toronto-based innovation hub has hired John Duffy, Conal Slobodin and Conor Coles of StrategyCorp to lobby the PMO, the finance department and Innovation, Science and Economic Development. Dr. Raphael Hofstein, MaRS Innovation CEO, told The Logic he’s looking for funding in the “tens of millions” to help promising Canadian biomedical startups stay in Canada, and bridge the gap between seed-stage funding and being established enough to attract venture capital investment. “People start things in Canada but they can’t get funding so they go south and it helps the U.S. economy. That makes no sense,” said Hofstein. (The Logic)

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Talking point: The appeal for funding is new. In October 2018, MaRS Innovation hired a lobbyist tasked with introducing the hub to key players in the federal government. Duffy himself is a noteworthy hire. The StrategyCorp founder currently represents a series of other powerful companies, including Sidewalk Labs, the e-cigarette company Juul Labs and the construction giant EllisDon. MaRS Innovation focuses on early-stage seed investments for life-science companies. The hub mostly helps Toronto’s major research universities and hospitals package and commercialize the intellectual property they generate.

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In 2018, female founders raised US$2.88 billion split across 482 companies, according to data from PitchBook and All Raise, a non-profit supporting women in entrepreneurship. That’s US$10 billion less than the US$12.8-billion that just one company—e-cigarette maker Juul—received on its own. Though the dollar amount raised was higher than in 2017, female founders received the same small share of VC funds distributed last year. (Fortune)

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Talking point: One explanation for the standstill is the increased number of “mega-rounds” of US$100 million or more that typically go to later-stage companies. Those deals continue to expand overall VC funding numbers and almost always go to male founders. Only two of the 25 top investments by SoftBank’s US$100-billion Vision Fund went to a company with a female co-founder, and they were both to Grab, the ride-hailing and food-delivery company co-founded by Tan Hooi Ling.