HARTFORD, Conn. – E-cigarette maker Juul Labs will pay nearly $440 million to settle a two-year, 33-state investigation into the marketing of its high-nicotine products that have long been blamed for sparking a national spike in teen smoking .
Connecticut Attorney General William Tong announced the deal Tuesday on behalf of the states plus Puerto Rico, which joined in 2020 to investigate Juul’s early promotions and claims about the safety and benefits of its technology as an alternative to smoking.
The settlement resolves one of the biggest legal threats facing the beleaguered company, which still faces nine separate lawsuits from other countries. Juul also faces hundreds of personal lawsuits filed on behalf of teenagers and others who say they became addicted to the company’s vaping products.
The state investigation found that Juul sells its e-cigarettes to underage teenagers with launch parties, product giveaways and advertisements and social media posts using youth models, according to a statement.
“Through this settlement, we secured hundreds of millions of dollars to help reduce nicotine use and forced Juul to accept a series of strict injunctions to end youth marketing and to crack down on sales to minors,” Tong said in a press release.
The $438.5 million will be paid over six to 10 years. Tong said Connecticut’s payment of at least $16 million will go toward tobacco prevention efforts and education. Juul previously settled lawsuits in Arizona, Louisiana, North Carolina and Washington.
Most of the restrictions imposed by Tuesday’s settlement will not affect Juul’s practices, which halted its use of parties, giveaways and other promotions after coming under scrutiny several years ago.
Teen use of e-cigarettes has skyrocketed since the launch of Juul in 2015, prompting the U.S. Food and Drug Administration to declare an “epidemic” of underage e-cigarette use among teens. Health experts said the unprecedented increase risks turning a generation of young people on to nicotine.
But as of 2019, Juul has pulled back, abandoning all U.S. advertising and pulling its fruit and candy flavors from store shelves.
The biggest blow came earlier this summer when the FDA moved in ban all Juul e-cigarettes from the market. Juul challenged that decision in court, and the FDA has since resumed its scientific review of the company’s technology.
The FDA review is part of a sweeping effort by regulators to bring control to the multibillion-dollar vaping industry after years of regulatory delays. The agency has approved a handful of e-cigarettes for adult smokers looking for a less harmful alternative.
While Juul’s early marketing focused on young, urban consumerssince then, the company has focused on pitching its product as an alternative source of nicotine for older smokers.
“We remain focused on our future as we fulfill our mission to divert adult smokers from cigarettes – number one cause of preventable death – while combating underage use,” the company said in a statement.
Juul agreed to refrain from numerous marketing practices as part of the settlement. These include not using caricatures, paying social media influencers, depicting people under the age of 35, advertising on billboards and public transport and placing ads in any commercial establishments unless 85% of their audience is adults.
The deal also includes restrictions on where Juul products can be placed in stores, age verification on all sales, and restrictions on online and retail sales.
Juul initially sold its high-nicotine pods in flavors like mango, mint and cream. The products have become a scourge in American high schools, with students drinking in bathrooms and hallways between classes.
But recent data from a federal survey shows that teens are changing away from the company. Most teenagers now prefer disposable e-cigarettes, some of which continue to be sold with sweet, fruity flavors.
Overall, the study showed a drop of nearly 40% in the percentage of teenagers using cigarettes as many children were forced to study from home during the pandemic. Still, federal officials cautioned about interpreting the results, given that they were collected online for the first time instead of in classrooms.
Perrone reported from Washington, DC
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