Juul Labs has agreed to pay $438.5 million to resolve a two-year bipartisan investigation by 34 states and territories into the e-cigarette giant’s sales and marketing practices.

Led by the state attorneys general of Connecticut, Oregon and Texas, the investigation revealed that Juul willfully engaged in an advertising campaign that appealed to youth, even though its e-cigarettes are both illegal for them to purchase and unhealthy for them to use.  The investigation also found that Juul targeted underage users with launch parties, ads featuring young models, social media posts and free samples; marketed a technology-focused, sleek design and appealing product flavors; and relied on age verification techniques that it knew were ineffective.  

Additionally, Juul’s early packaging allegedly failed to clearly disclose that the product contained nicotine and, further, misrepresented the concentration of nicotine in its products.  Consumers were also misled to believe that consuming one e-liquid Juul pod was the equivalent of smoking one pack of combustible cigarettes and that the product was a smoking cessation device despite the absence of FDA approval to make such claim.

“[Juul] relentlessly marketed vaping products to underage youth, manipulated their chemical composition to be palatable to inexperienced users, employed an inadequate age verification process, and misled consumers about the nicotine content and addictiveness of its products,” said Connecticut Attorney General William Tong.  “Through this settlement, we have secured hundreds of millions of dollars to help reduce nicotine use and forced JUUL to accept a series of strict injunctive terms to end youth marketing and crack down on underage sales.”

Settlement documents are currently being finalized.  The $438.5 million will be paid over a period of six to ten years, with the total amount increasing the longer the company takes to make payments (if extended to ten years, the final settlement would reach $476.6 million).  As part of the settlement, Juul has also agreed to refrain from, among other things, youth marketing, depicting persons under 35 in any marketing, paid product placement, representations about nicotine that are misleading or not approved by the FDA, advertising in outlets with less than an 85% adult audience, advertising on billboards or public transportation, social media advertising (other than testimonials by individuals over 35, with no health claims), use of paid influencers, direct-to-consumer ads unless age-verified, and free samples.

In a statement on its website, Juul did not acknowledge any wrongdoing but said that the settlement was “a significant part of [its] ongoing commitment to resolve issues from the past” while awaiting a decision on its administrative appeal to the FDA over whether it should receive marketing authorization.