Juul Labs agreed to pay US$40 million to the state of North Carolina to settle a lawsuit, the first in numerous cases against the e-cigarette maker, including those filed by 13 other states, alleging that the company aggressively marketed its products to young people through social media and other mediums, which in turn led to addiction to a rise in youth vaping and addiction to high-nicotine vapes.
The US$40 million will be paid out over six years, which the state will use to fund programs to help people quit e-cigarettes and underwrite e-cigarette research. The consent order for this settlement will restrict Juul’s sales and advertising in the state, with the company agreeing not to sell flavored e-cigarettes without US Food and Drug Administration (FDA) approval. Juul will be prohibited from implementing marketing strategies that would appeal to young people such as influencer marketing, outdoor advertising near schools, sporting events and concerts, social media advertising, or even using anyone younger than 35 in their advertising. The company is also required to use a barcode age-verification system on IDs at over-the-counter points of sales, while for online sales it is ordered to restrict sales to no more than two devices per month per individual, 10 devices per year, and no more than 60 pods per month.
Juul spokesperson, Joshua Raffel, said, “This settlement is consistent with our ongoing effort to reset our company and its relationship with our stakeholders, as we continue to combat underage usage and advance the opportunity for harm reduction for adult smokers.”
Reaching the settlement deal with North Carolina allowed Juul to avoid a jury trial that had been scheduled for later this summer. None of the other 2,600 lawsuits against the company have been scheduled to begin this year. An FDA ruling on whether Juul and other e-cigarette products with submitted premarket tobacco applications (PMTA) will be allowed to remain on the market, expected early this September, will also be an important factor in Juul’s future and the lawsuits against it.
Altria, the parent company of Philip Morris Inc, the US division of the famous global company, has a 35% stake in Juul Labs.