UTAH (ABC4) – Utah Attorney General (AG) Sean D. Reyes has announced a $438,500,000 agreement between JUUL Labs and 34 states and territories, resolving a two-year investigation into the e-cigarette manufacturer’s marketing and sales practices.
In addition to the financial terms, the settlement would “force JUUL to comply with a series of strict injunctive terms,” severely limiting their marketing and sales practices, according to a press release.
Attorney General Reyes stated the following:
“Vaping is a serious and addictive health hazard for young people in our state that is often promoted as a safer alternative to cigarettes. JUUL, in particular, has used aggressive and manipulative marketing techniques to get a new generation hooked on nicotine.”
“The most important part of this settlement is the implementation of restrictive limits on JUUL’s marketing and business practices to further protect our youth. The monetary component of settlement is secondary albeit not insignificant.“
Department of Commerce Executive Director Margaret Busse added:
“Deceptive marketing tactics are never tolerated, but JUUL’s were especially despicable. This settlement represents a big win for Utah in the fight against those who purposely market dangerous products to youth. JUUL will be held responsible for marketing addictive products to underage individuals.”
A press release of the Attorney General’s office states that JUUL was, until recently, the dominant force in the vaping market.
The multistate investigation revealed that JUUL rose to this position by “willfully engaging in an advertising campaign that appealed to youth,” even though its e-cigarettes are both illegal for them to purchase and reportedly unhealthy to use. The investigation found that JUUL relentlessly marketed to underage users with “launch parties, advertisements using young and trendy-looking models, social media posts, and free samples.”
The Utah Office of the Attorney General says that JUUL marketed a “sleek design” that could be easily concealed, selling its product in flavors “known to be attractive to underage users.” The release states that JUUL also “manipulated the chemical composition of its product” to make the vapor less harsh on the throats of young and inexperienced users.
To preserve its young customer base, JUUL reportedly relied on age verification techniques that “it knew were ineffective.”
The investigation reportedly further revealed that JUUL’s original packaging was misleading, in that it “did not disclose that it contained nicotine” and implied that it contained a lower concentration of nicotine than it actually did.
The release states that consumers were also misled to believe that consuming one JUUL pod was the equivalent of smoking one pack of cigarettes, with the product being marketed as a “smoking cessation device” without FDA approval to make such claims.
The 34 states are reportedly in the process of finalizing and executing the settlement documents — a process that takes approximately three to four weeks. The $438,500,000 million would be paid out over six to ten years, with the amounts paid increasing the longer the company takes to make the payments. If JUUL chooses to extend the payment period up to ten years, the final settlement would reach $476,600,000 million.
As part of the settlement, JUUL has agreed to refrain from:
- Youth Marketing
- Funding education programs
- Depicting persons under age 35 in any marketing
- Use of cartoons
- Paid product placement
- Sale of brand name merchandise
- Sale of flavors not approved by the FDA
- Allowing access to websites without age verification on the landing page
- Representations about nicotine not approved by FDA
- Misleading representations about the nicotine content
- Sponsorships/naming rights
- Advertising in outlets unless 85 percent audience is adult
- Advertising on billboards
- Public transportation advertising
- Social media advertising (other than testimonials by individuals over the age of 35, with no health claims)
- Use of paid influencers
- Direct-to-consumer ads unless age-verified, and
- Free samples
The Attorney General’s Office also states that the agreement includes sales and distribution restrictions, such as where the product may be displayed/accessed in stores, online sales limits, retail sales limits, age verification on all sales, and a retail compliance check protocol.
Alabama, Arkansas, Connecticut, Delaware, Georgia, Hawaii, Idaho, Indiana, Kansas, Kentucky, Maryland, Maine, Mississippi, Missouri, Montana, North Dakota, Nebraska, New Hampshire, New Jersey, Nevada, Ohio, Oklahoma, Oregon, Puerto Rico, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Vermont, Wisconsin, Wyoming have signed on to the agreement. The investigation was led by Connecticut, Texas, and Oregon.