LAS VEGAS (KTNV) — Nevada will receive nearly $14.5 million as part of a multi-state settlement that resolves a two-year investigation into e-cigarette maker JUUL Labs, Attorney General Aaron D. Ford announced Tuesday.
Attorneys general from 33 state and Puerto Rico argued JUUL became the "dominant player in the vaping market" by "willfully engaging in an advertising campaign that appealed to youth, even though its e-cigarettes are both illegal for them to purchase and are unhealthy for their use."
SETTLEMENT DETAILS: Juul to pay nearly $440M to settle states' teen vaping probe
JUUL will have to pay out $438.5 million to the 34 litigants, including Nevada, which will receive $14,473,168.72, according to Ford.
"For years, JUUL Labs knowingly marketed its product to underage users, directly working to expose minors to nicotine use and abuse," Ford wrote in a prepared statement. "This settlement will help Nevada's youth by curbing these harmful marketing tactics and holding the company accountable for its breach of public trust."
According to Ford, an investigation into the company's practices revealed that JUUL "relentlessly marketed to underage users," as well as the following:
- marketed a sleek design that could be easily concealed
- sold its product in flavors known to be attractive to underage users
- manipulated the chemical composition of its product to make the vapor less harsh on the throats of "young and inexperienced" users
- relied on age verification techniques that it knew were ineffective
- sold products in packaging that did not clearly disclose that it contained nicotine, and implied it contained a lower concentration of nicotine than it did
- "misled" consumers to believe that smoking one JUUL pod was the equivalent to smoking one pack of cigarettes
- "misrepresented" its product as a smoking cessation device without FDA approval.
According to terms of the settlement, JUUL would pay out the total amount over six to 10 years, with the amounts increasing the longer it takes to make the payments. If the payment period extends up to 10 years, the final settlement would reach $476.6 million, Ford said.
As part of the settlement, JUUL agreed to refrain from:
- Marketing their product to youth
- Depicting people under age 35 in any marketing
- The use of cartoons in their marketing materials
- The sale of brand name merchandise
- The sale of flavors not approved by FDA
- Making representations about nicotine not approved by FDA
- Allowing access to websites without age verification on landing page
- Making misleading representations about nicotine content
- Advertising on billboard and public transportation
- Using paid “influencers,” product placement and sponsorships/naming rights
- Using direct-to-consumer ads unless there is a form of age verification, and
- Providing free samples
In addition, the company committed to funding education programs and will:
- restrict its advertising to outlets with an audience made up of 85% adults; and
- limit advertising on social media to testimonials by people over the age of 35, with no health claims.
The agreement also includes sales and distribution restrictions, including 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, according to Ford.
Nevada served on the executive committee of the multistate investigation, Ford noted.
