Juul Labs will pay $438.5 million (£378.2m) to settle a probe by 34 US states that found the vaping company marketed to underage smokers, state officials announced Tuesday.
Under the agreement, which is still being finalised, Juul would provide payments over the next 6-10 years to individual US states and pledge to not employ cartoons in ads or otherwise market to younger consumers.
The probe was led two years ago by state officials in Connecticut, Oregon and Texas and joined by other states.
The investigation “revealed that Juul wilfully engaged in an advertising campaign that appealed to youth, even though its e-cigarettes are both illegal for them to purchase and unhealthy for children,” according to a press release from the Oregon Department of Justice.
Juul “relentlessly marketed to underage users with launch parties, advertisements using young and trendy-looking models, social media posts and free samples,” the press release said, adding that the company used age verification techniques “that it knew were ineffective.”
“The conduct that led to this settlement was reprehensible and demonstrates pure corporate greed at its most damaging,” said Oregon Attorney General Ellen Rosenblum.
“Just when we were starting to make serious progress reducing tobacco use among our young people, Juul came along and hooked another generation.”
Juul called the settlement “a significant part of our ongoing commitment to resolve issues from the past.”
“We remain focused on the future as we work to fulfill our mission to transition adult smokers away from cigarettes — the number one cause of preventable death — while combating underage use,” the company said in a statement.
Juul has argued that vaping products can provide a solution to the harmful health impacts from conventional combustible cigarettes.
Juul has been blamed for a surge in youth vaping over its marketing of fruit and candy flavored e-cigarettes, which it stopped selling in 2019.
In January 2020, the US Food and Drug Administration said sale of e-cigarettes in flavors other than tobacco or menthol would be illegal unless specifically authorised by the government.
On June 23, the FDA said it was ordering all products made by Juul Labs off the market after finding the vaping giant had failed to address certain safety concerns.
The following day, a US Court suspended the FDA’s action following a Juul appeal.
Juul, in the statement, said the agency has submitted an appeal to the FDA, adding that “we continue to offer our products to adult smokers throughout the US.”
Juul maintains that its products meet US public health standards.
Juul products that remain on sale include the Juul smoking device and cartridges in Menthol and “Virginia Tobacco.”