New Jersey Attorney General Matthew Platkin announced Dec. 6 that the Garden State entered a $438 million multistate settlement with Juul Labs.
The terms of the 33-state agreement were first announced in September. Tuesday’s development is the next step in that process, as Consent Judgements were filed between Juul and the states.
The settlement resolves a two-year investigation into the electronic cigarette company’s marketing and sales practices.
The multistate inquiry revealed that Juul rose to the top of the vaping market by engaging in an advertising campaign that appealed to youth, including through launch parties, influencers, social media posts, free samples, attractive flavors and more.
“For years the tobacco industry has preyed on young people to get them addicted to nicotine early and keep them hooked for the rest of their lives,” said Platkin in a statement. “This settlement will protect youth from the hazards of vaping and smoking and ensuring that Juul can no longer put profits over public health by using unlawful sales practices to fuel a youth vaping crisis.”
New Jersey will receive roughly $33.6 million from the settlement, which will be paid in yearly installments between now and the end of 2027.
In addition to the financial penalty, Juul has also agreed to comply with a slew of terms that will limit its marketing and sales practices, including refraining from the following:
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 U.S. Food and Drug Administration, allowing access to websites without age verification on its landing page, representations about nicotine not approved by the FDA, misleading representations about nicotine content, sponsorships/naming rights, advertising in outlets unless 85% of the audience is adult, advertising on billboards near schools or playgrounds, public transportation advertising, social media advertising, use of paid influencers, direct-to-consumer ads unless age verified, and free samples.
The terms also include sales and distribution restrictions.
Acting Director of the Division of Consumer Affairs Cari Fais said this monumental settlement shows the e-cigarette industry that deceptive marketing to get teens addicted will not be tolerated.
“As the rate of teen smoking went down, Juul was finding new ways to market nicotine to young people,” said Fais.
The announcement comes amid broader turbulence for Juul, as it faces scrutiny from federal regulators and last month narrowly avoided filing bankruptcy by securing new financing.
Juul had reportedly been preparing to file Chapter 11. Instead, the company said it is undertaking a reorganization that will include layoffs.
In response to Tuesday’s announcement, a Juul spokesperson told NJBIZ that the filing of these Consent Orders is part of moving forward with the settlement and a continuation of the company’s progress to resolving past issues.
“The terms of the agreement are aligned with our current business practices which we started to implement after our company-wide reset in the fall of 2019,” the spokesperson told NJBIZ. “As past issues continue to be resolved, Juul Labs remains focused on a path forward to secure its future and fulfill its mission to transition adult smokers away from cigarettes – the No. 1 cause of preventable death – while combating underage use. As we work through the FDA’s administrative appeals process of its now-stayed MDO [Marketing Denial Order] and our products remain available for adult smokers, we are confident in our ability to advance the harm reduction opportunity in the United States.”