Juul Labs Inc.’s dominance of the electronic-cigarette market in 2018 ended on two high notes for the controversial company — a 75.8 percent market share and having the top-selling U.S. cigarette maker as a major investor.

The market share is based primarily on Nielsen convenience store data for the four-week period that ended Dec. 29. Juul’s market share dipped from 76.1 percent in the previous report.

Juul’s dominance did even more than just attracting a $12.8 billion investment from Altria Group Inc. on Dec. 23 for a 35 percent ownership stake. It also has been sustained even with the potential of tighter Food and Drug Administration regulations casting a large shadow for 2019 and likely beyond.

Wells Fargo Securities analyst Bonnie Herzog had projected $7 billion in e-cig sales in 2018. On Tuesday, she made her initial 2019 projection of $9 billion in sales.

“We expect this reduced risk product category growth will continue to accelerate as technology evolves and new products come to market, such as heat-not-burn traditional cigarettes,” Herzog said. One example is the iQOS brand sold by Philip Morris International in non-U.S. markets.

Philip Morris International had projected gaining FDA approval to sell its Marlboro heat sticks in the U.S. in 2018. The manufacturer entered the FDA regulatory pipeline in May 2017 to market the heat sticks as a modified-risk product.

“Bottom line, we expect more and more consumers to convert to next-generation, reduced-risk platforms,” Herzog said.

The second-place market share of Vuse by R.J. Reynolds Vapor Co. rose from 9.1 percent to 10 percent. By comparison, a year ago, Juul was at 46.8 percent market share and Vuse at 20.7 percent.

Juul entered the mainstream retail marketplace in 2015, and is sold in the form of a pen or a USB device.

That design makes it easy to hide, which FDA Commissioner Dr. Scott Gottlieb said has contributed to “an epidemic” of teenage use, albeit based on a small sample size nationally.

The FDA announced Nov. 15 plans to limit e-cig flavors to tobacco, menthol and mint and potentially ban menthol traditional cigarettes.

On Nov. 14, Juul said it would start selling only those flavors at more than 90,000 convenience stores and vape shops.

For some stores, however, the removal of four other flavors likely will be temporary once retail locations prove they can meet the planned FDA age-21 verification policies on purchases.

In the latest report, MarkTen XL of NuMark was third at 9 percent, blu eCigs of Fontem Ventures was fourth at 4.4 percent and Logic of Japan Tobacco was fifth at 2.6 percent.

Altria announced Dec. 7 its decision to discontinue the struggling e-cigs MarkTen and Green Smoke and oral nicotine product Verve.

In the traditional cigarette category, Herzog said industry volume declined by 6.5 percent despite recent price increases by Philip Morris USA, Reynolds and ITG Brands LLC. She predicted industry volume to decline 4.2 percent in 2019.

Herzog said that for all the buzz about e-cigs, it remains as just the fourth largest tobacco product in terms of having 4 percent of retail sales, compared with 83 percent for traditional cigarettes, 8 percent for chewing and smokeless tobacco and 5 percent for cigars.

Philip Morris was first at 54.2 percent market share, of which 47.2 percent is top-selling Marlboro, down 1 percentage point.

Reynolds remained at 33.8 percent market share, led by 13 percent from Newport, 8.8 percent Camel, 6.6 percent Pall Mall and 3.3 percent Natural American Spirit.

Herzog said that all of the Reynolds brands experience slightly lower volumes during the four-week period.

ITG was at 7.3 percent, representing 2.1 percent from Winston and 1.6 percent Kool and 1.6 percent Maverick. ITG has said its market share is closer to 10 percent.

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