Altria (MO  ), the maker of major cigarette brands such as Marlboro, is taking massive writedowns from the share it took in e-cigarette maker Juul last December. Since paying nearly $13 billion for the maker of electronic cigarettes last year, it has declined in value significantly in the face of scrutiny from local, state, and federal regulators. Juul has come under fire for its role in teenagers picking up the habit of vaping nicotine products, and this scrutiny has only intensified in the wake of several of these teenagers being sent to the hospital from tainted vapor products that have not been tested for safety. This is yet another hit to a major player in an industry that has desperately trying to turn itself around in the wake of changing tobacco use trends among Americans.

Late last year, Altria acquired a 35% stake in Juul in the hopes that it would diversify its portfolio. Cigarette use has declined by two-thirds since 1965 among adults and since youth smoking statistics were first reported in 1991, youth smoking rates have declined from 27% to less than 9%. This, combined with the Master Settlement Agreement reached in 1998 between the nation's largest tobacco manufacturers and almost all state governments in the U.S., has led tobacco manufacturers to try to diversify their holdings as tobacco use trends continue to decline.

Despite the decline in cigarette use among American adults, Altria was profitable as recently as last year. Four quarters ago, Altria posted a profit of $1.9 billion on the strength of its premium brands. However, the several billion dollars that Altria has written down as a consequence of the declining value of Juul has caused Altria's total profit to fall precipitously. Consequently, its most recent earnings report has a loss of $2.6 billion. A proposed federal law to ban the sale of flavored e-cigarette flavors and making the only available flavors tobacco and menthol may complicate things further for this large nicotine manufacturer.