Juul to pay $439m to settle US e-cigarette marketing probe | Business and Economic News

The e-cigarette maker also promises to refrain from some marketing, such as the use of cartoons and depictions of users under the age of 35.

E-cigarette maker Juul Labs Inc has agreed to pay $438.5m to settle claims by 34 US states and territories that it downplayed the risks of its products and targeted minors of consumer age, some states said.

As part of the settlement announced Tuesday, Juul agreed to refrain from certain types of marketing, including the use of cartoons, product placement and depictions of users under the age of 35.

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

The payout stems from a two-year investigation led by Connecticut, Texas and Oregon. The $438.5m will be paid over six to 10 years.

Connecticut Attorney General William Tong said Connecticut’s payment of at least $16m will go toward vaping prevention efforts and education.

“I have no illusions and I can’t say it will stop youth vaping,” Tong said. “It continues to be an epidemic. It continues to be a big problem. But we’ve actually got a large part of what used to be the market leader, and by their behavior, a big offender.”

The deal accounts for about 25 percent of Juul’s sales in the United States, which totaled $1.9bn last year.

Tong said it was an “agreement in principle”, meaning states would finalize settlement documents in the next few weeks.

Juul, which has not admitted wrongdoing, called the settlement “an important part of our ongoing commitment to resolve issues from the past” and said the marketing restrictions were consistent with its practices since it implemented “company-wide reset” in 2019.

The company at that time pulled most flavors from the market and stopped most of its advertising under pressure from regulators.

“We remain focused on our future as we fulfill our mission to move adult smokers away from cigarettes – the number one cause of preventable death – while combating underage use,” Juul said in a statement.

Juul previously settled similar claims by Arizona, North Carolina, Louisiana and Washington. Several states, including New York, California, Massachusetts and Illinois, continue to pursue claims against the company.

Juul brand vape cartridges are pictured in a store in Atlanta, Georgia [File: Elijah Nouvelage/Reuters]

The use of e-cigarettes by young people has increased in the years following the launch of Juul in 2015, leading the US Food and Drug Administration (FDA) to declare an “epidemic” of minor vaping. Health experts say the unprecedented increase risks hooking a generation of young people to nicotine.

But since 2019, Juul has been mostly in retreat, dropping all US advertising and pulling its fruit and candy flavors from store shelves. At first, Juul sold its high-nicotine pods in flavors like mango, mint and creme.

The products have become a scourge in US high schools, with students vaping in bathrooms and in the hallways between classes.

Thousands of local governments and individuals have also filed lawsuits against the company, most of which have been consolidated in federal court in San Francisco, California.

The first trial is set for November in a case brought by the San Francisco school district. The next trial, scheduled for January, will be contested by the family of a Tennessee teenager who allegedly became addicted to Juul’s e-cigarettes.

The FDA in June briefly banned the products, although it halted the ban and agreed to reconsider after the company appealed.