Regulatory Approval Value Multiplier

Scott Galloway shares his experience investing in a vaping company called Enjoy (later JUUL), which became his most successful investment despite significant ethical challenges. The investment succeeded through a regulatory strategy that positioned the company for acquisition by Altria.

• Invested $2.5 million in Enjoy, a vaping company bought out of bankruptcy for $60 million

  • The company was positioned as a smoking cessation tool
  • His mother died of a smoking-related illness, and friends were using vapes to quit smoking
  • Turned his $2.5 million into approximately $75 million (30x return)

• The investment was structured as a regulatory play:

  • "Jason and the CEO Ryan were real visionaries and said this is all about an FDA play"
  • They spent "a million bucks trying to get FDA approval"
  • The strategy was to become "one of the three or four companies that has FDA approval around smoking cessation"
  • After "five to seven years later, 80 or 100 million dollars, we get the regulatory approval"
  • They sold the company for "I think 2,200,000,000 to Altria"

• The investment faced serious ethical challenges:

  • "Kids are dying... because vaping had become so big that now kids were buying black market liquid"
  • "High schools in the Midwest were pulling the doors off of bathrooms because so many kids were vaping"
  • Kids were developing "popcorn lung" from black market vape liquids
  • "That was such an incredibly low moment for me and I remember I resigned from the board"
  • "I was on the board of my kid's school and the headmaster was putting out memos warning of vaping"
  • "I tried to sell my stake and there was no market for it"

• The investment succeeded despite being "unsexy":

  • "In total classic ton of hair on it almost went to zero regulatory play really unsexy bankruptcy"
  • "Just all the shit that you wouldn't naturally that most people just wouldn't wanna get near"
  • "It was really really difficult and then just every all the moons lined up"

• Scott also invests heavily in high-end real estate in "super cities":

  • "My biggest asset allocation has been in high-end real estate in what I call these super super cities"
  • Focuses on "homes of future billionaires" in places like Dubai, London, Palm Beach, Aspen, and New York
  • "My view is in thirty or fifty years those homes could be worth a lot of money"
  • "Income inequality has gone so batshit crazy not only in the US around the world"