Juul agreed to pay nearly $440 million for its marketing practices promoting teen vaping

File image of a package of Juul e-cigarettes at a store in Atlanta, Georgia, USA. September 26, 2019 (REUTERS / Elijah Nouvelage) (Elijah Nouvelage /)

The manufacturer of electronic cigarettes Juul Labs has agreed to pay nearly $440 million to settle a two-year, 33-state investigation into the marketing of its high-nicotine vaping products.which have long been blamed for sparking a controversial rise in teen vaping.

Connecticut Attorney General William Tong announced the settlement Tuesday on behalf of states plus Puerto Rico, which came together in 2020 to investigate early promotions and claims by Juul about the benefits of its technology as an alternative to smoking.

The agreement, which includes numerous restrictions on how Juul can market its products, resolves one of the biggest legal threats facing the beleaguered company, which is still facing nine separate lawsuits from other states. In addition, Juul is facing hundreds of personal lawsuits filed on behalf of teenagers and others who say they have become addicted to the company’s vaping products.

The states investigation found that Juul marketed its e-cigarettes to underage teens with launch parties, product giveaways, and ads and social media posts using young models, according to a statement.

“We think this will go a long way toward stemming the flow of youth vaping,” Tong said at a news conference at his Hartford office.

“I am under no illusions and I cannot say that it will stop youth vaping,” he said. “It is still an epidemic. It’s still a big problem. But we have essentially taken a large part of what was once a market leader and, by the conduct of it, a major offender.”

The USD 438.5 million will be paid over a period of six to ten years. Tong said Connecticut’s payment of at least $16 million will go toward vaping education and prevention efforts. Juul previously settled lawsuits in Arizona, Louisiana, North Carolina and Washington.

The total agreement amounts to about 25% of Juul’s US$1.9 billion sales last year. Tong said it was an “agreement in principle,” meaning the states will finalize agreement documents in the coming weeks.

E-cigarette maker Juul Labs has agreed to pay nearly $440 million to settle a two-year investigation (REUTERS/Mike Blake/Illustration/File Photo)
E-cigarette maker Juul Labs has agreed to pay nearly $440 million to settle a two-year investigation (REUTERS/Mike Blake/Illustration/File Photo) (Mike Blake/)

Most of the limits imposed by Tuesday’s deal won’t immediately affect Juul, which stopped the use of parties, giveaways and other promotions after coming under scrutiny several years ago.

Teen e-cigarette use skyrocketed after Juul launched in 2015, prompting the US Food and Drug Administration to declare teen vaping an “epidemic.” Health experts said the unprecedented increase risked hooking a generation of young people on nicotine.

But since 2019, Juul has been mostly in retreat, removing all advertising from the US.. and removing its fruit and candy flavors from store shelves.

The biggest blow came earlier this summer when the FDA moved to ban all Juul e-cigarettes from the market. Juul challenged that ruling in court and has since The FDA has reopened its scientific review of the company’s technology.

The FDA review is part of a broader effort by regulators to bring scrutiny to the multibillion-dollar vaping industry after years of delays. The agency has licensed a handful of Juul’s competitor e-cigarettes for adult smokers looking for a less harmful alternative.

Yes ok Juul’s initial marketing focused on young, urban consumers, the company has since gone on to market its product as an alternative source of nicotine for older smokers.

“We remain focused on our future as we fulfill our mission to stop adult smokers from smoking cigarettes, the leading cause of preventable death, while combating underage use,” the company said in a statement.

Most of the limits imposed by Tuesday's agreement will not immediately affect Juul (REUTERS/Mike Blake/Illustration/File Photo)
Most of the limits imposed by Tuesday’s agreement will not immediately affect Juul (REUTERS/Mike Blake/Illustration/File Photo) (Mike Blake/)

Juul agreed to refrain from a number of marketing practices as part of the settlement. They include not using cartoons, paying social media influencers, representing people under the age of 35, advertising on billboards and public transportation, and placing ads at any point of sale unless 85% of your audience is adults.

The deal also includes restrictions on where Juul products can be placed in stores, age verification on all sales, and limits on retail and online sales.

“These are some of the strictest mandates at any point in any industry,” Tong said, “which is incredibly important because at the end of the day it’s about protecting our children and protecting all of us from a very significant public health risk.” . “

Juul initially sold its high-nicotine pods in flavors like mango, mint and cream.. The products became a scourge in US high schools, with students vaping in bathrooms and hallways between classes.

But recent federal survey data shows that teenagers have been drifting away from the company. Most teens now prefer disposable e-cigarettes, some of which continue to be sold in sweet and fruity flavors.

Overall, the survey showed a nearly 40% drop in teen vaping rate, as many children were forced to learn from home during the pandemic. Still, federal officials cautioned against interpreting the results given that they were collected online for the first time, rather than in classrooms.

(With information from AP)

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