April 19 (UPI) -- Tobacco stocks plummeted Monday as investors responded to reports the Biden administration is considering new regulations on cigarettes.
Shares of Altria fell 6.15%, while British American Tobacco declined 2.22% and Philip Morris dropped 1.35% following a report by The Wall Street Journal that President Joe Biden is weighing whether to include a reduction in nicotine levels in conjunction with a ban on menthol cigarettes.
The paper reported the Food and Drug Administration is facing an April 29 deadline to respond to a citizen's petition to ban menthols and that the administration is considering whether to include a measure reducing the amount of nicotine in cigarettes in the same piece of legislation.
The presence of nicotine in cigarettes, while not carcinogenic, makes tobacco products more addictive.
Altria representative George Parman urged the FDA to ensure that its decision is informed by scientific research in a statement to CNBC.
"Any action that the FDA takes must be based on science and evidence and must consider the real-world consequences of such actions, including the growth of an illicit market and the impact on hundreds of thousands of jobs from the farm to local stores across the country," Parman said.
Altria purchased a 35% stake in e-cigarette company Juul for $12.8 billion in 2018 and took writedowns of more than $4 billion in each of the following years as the company faced lawsuits and legislation banning flavored replaceable e-cigarette pods and cartridges aimed at reducing teen vaping.
A study by researcher Geoffrey Fong of the University of Waterloo found that a 2018 ban on menthol cigarettes in Canada led to a 59% increase in the likelihood of menthol smokers quitting.
A similar ban in the United States, the study found, could lead an additional 923,000 smokers to quit.
FDA research released earlier this year also found that the minty flavor of menthol cigarettes can make smoking less irritating, making smoking harder to quit and more appealing to young people.