Juul Labs will pay $438.5 million (£380 million) to end an investigation into its advertising to underage buyers as it has risen to become one of the leading vape companies in the US.
The 33-state and Puerto Rico deal also restricts Juul’s marketing, for example by banning the use of anyone under the age of 35 in its ads.
Juul called the settlement “an essential part” of its efforts to resolve “issues from the past.”
The company is also fighting a US ban on its products.
The U.S. Food and Drug Administration said in June it would suspend sales of Juul products due to insufficient data on health effects. The measure is suspended while the company appeals the decision.
It continues to face litigation in some other states, as well as private lawsuits brought by individual families and others.
Juul said the terms of Tuesday’s settlement are consistent with its marketing practices since a “company-wide reset” in the fall of 2019 and are “looking forward.”
“We believe that once the FDA has completed a full review of all submitted scientific evidence and evidence, as required by law and without political interference, we should receive marketing approval,” the company said in a statement.
Juul has been widely blamed for the explosive growth of vaping among teens. More than a quarter of high school students used e-cigarettes in 2019, according to a federal survey, although that proportion has since declined.
The investigation into Juul’s marketing found that the company “has relentlessly marketed vaping products to underage youth,” despite such purchases being illegal in the U.S., said Connecticut Attorney General William Tong, who announced the settlement on Tuesday.
He said the company also used age verification practices that it knew were ineffective and failed to clearly disclose that its capsules contained nicotine, which is addictive.
“Juul’s cynically calculated advertising campaigns have created a new generation of nicotine addicts,” he said.
Funds from the settlement will be paid out over six to ten years and are intended to be used to combat tobacco use.
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