Juul Labs, the producer of electronic cigarettes, has agreed to pay roughly $440 million to resolve a two-year investigation by 33 states into the marketing of its high-nicotine vaping devices, which have long been accused for triggering a nationwide spike in teen vaping.
The Connecticut Attorney General announced the agreement on behalf of the states and Puerto Rico, who joined together in 2020 to investigate Juul's early advertising and promises about the benefits of its technology as a smoking substitute.
The deal, which contains various limits on how Juul may sell its products, eliminates one of the most serious legal risks to the organization, which is still facing nine other lawsuits from other states. Furthermore, Juul is facing hundreds of personal lawsuits filed on behalf of minors and others who claim to have been addicted to the company's vaping devices.
According to a statement, the states' investigation discovered that Juul advertised its e-cigarettes to underage minors through launch parties, product freebies, commercials and social media posts featuring young models.
According to the attorney general, the deal will go a long way toward stopping the wave of youth vaping. He even stated that there is no guarantee that the problem of youth vaping would be solved. It will continue to be an epidemic, but the move has had a significant influence on the market leader's conduct.
The $438.5 million will be distributed over a six to ten-year period. The state of Connecticut will contribute at least $16 million to vaping prevention and education activities. Juul previously reached settlements in Arizona, Louisiana, North Carolina, and Washington.
The settlement sum is almost 25% of Juul's $1.9 billion in U.S. sales last year. It was an "agreement in principle," which means the states will finalize the settlement agreements in the coming weeks.
The majority of the restrictions established by the agreement would not apply immediately to Juul, which stopped using parties, giveaways, and other promotions after being investigated some years ago. The corporation now accounts for around one-third of the retail vaping industry in the United States, down from 75% a few years ago.
The use of e-cigarettes among the youth increased in the years following Juul's 2015 introduction, prompting the FDA to proclaim an "epidemic" of underage smoking among young people. The enormous growth, according to health experts, risks hooking a generation of young people on nicotine.
However, Juul has mostly been in retreat since 2019, discontinuing all U.S. advertising and withdrawing its fruit and candy flavours from shop shelves.
The FDA announced earlier this summer that all Juul e-cigarettes will be removed from the market. Juul appealed the decision in court, and the FDA has now reopened its scientific investigation of the company's technology.
The FDA inquiry is part of a broad move by authorities to put the multibillion-dollar vaping business under examination after years of delays. For adult smokers searching for a less dangerous alternative to cigarettes, the FDA has approved a few e-cigarettes from Juul's competitors.
While Juul's early marketing targeted youthful, urban professionals, the business has recently altered its attention to selling its product as a nicotine replacement for elderly smokers.
According to the corporation, it is entirely focused on the future in order to meet the aim of transitioning adult smokers away from cigarettes and combating underage usage.
As part of the settlement, Juul agreed to desist from a variety of marketing techniques. They include avoiding to use of cartoons, bribing social media influencers, showing people under the age of 35, promoting on billboards and public transportation, and displaying advertisements in any medium unless at least 85% of their audience is adults.
The agreement also includes limitations on where Juul products may be sold in shops, age verification on all purchases, and restrictions on online and retail sales.
Juul first marketed its high-nicotine pods in mango, mint, and cream flavors. Students vaping in toilets and halls between classes became an epidemic in American high schools.
However, according to new government survey data, youths are drifting away from the corporation. Many vaping youths now choose disposable e-cigarettes, some of which are still available in pleasant, fruity flavours.
Overall, the poll found a roughly 40% decrease in teen vaping rates, as many children were compelled to learn from home during the epidemic. Nonetheless, federal officials warned against interpreting the findings because they were collected online for the first time, rather than in classrooms.