PHOENIX, AZ (AP) — Juul Labs, an E-cigarette company, has agreed to pay $14.5 million to Arizona. The state also promised not to market to youth in order to settle a consumer fraud suit.
Attorney General Mark Brnovich announced Tuesday that Juul had reached a second settlement with state prosecutors. The settlement ends the litigation that a Republican U.S. Senate candidate had filed in January 2020 against Juul, and another maker electronic cigarettes. They claimed they had illegally targeted young people with their marketing.
Arizona had previously been awarded a $22.5million judgment against Eonsmoke, a defunct vaping product manufacturer. However, Arizona has yet to and will not collect the money.
Juul Labs admitted that it did not commit any wrongdoing during the settlement and said it was “another step in an ongoing effort to resetour company.” The company had already stopped advertising prior to Brnovich’s lawsuit and discontinued all sales of flavored products, except menthol.
Juul has been sued by multiple states for marketing its products. Juul claims that it is a safer option to regular tobacco products. It reached a similar agreement with North Carolina’s attorney-general in June. This included a $40m payment, promises not to market its products to minors, and increased enforcement of retailers selling its products. The company is still facing lawsuits in a few states.
E-cigarettes are marketed as safer than traditional tobacco cigarettes. They deliver nicotine, but do not emit smoke that can cause cancer. However, they can still be addictive and harmful to your health, particularly for teens whose minds are still developing.
The U.S. Food and Drug Administration approved last month the first e-cigarette. It stated that R.J. Reynolds’ product had a clear advantage because it could reduce regular smoking. FDA is still reviewing Juul’s product. There have been serious health consequences from vaping products that are not properly tested.
Only $2 million of the $14.5million Arizona settlement will go towards programs that discourage vaping, including education and cessation programs to stop young people becoming addicted. Juul also agreed to implement a strict retailer monitoring system. It will conduct compliance checks at 25 stores per month in Arizona over the course of two years, and take legal action against any that sell illegally to minors.
Juul is required to stop advertising near schools and not target anyone younger than 21. Juul also must not market via social media. It is not advertising.
The remaining $2 million will be transferred to a state account used by the attorney general for funding consumer fraud investigations.
Brnovich released a statement saying that Juul was held accountable for its irresponsible marketing strategies that led to the addiction of minors in Arizona to nicotine. “Combatting the youth vaping epidemic is a priority for our office, with both our undercover Counter Strike Program and zero tolerance for vaping businesses that deceive or mislead.”
Juul stated that in its statement about the Arizona settlement, it “continued working with federal stakeholders to advance a fully controlled, science-based marketplace of vapor products.”
It stated that it would continue to support “Tobacco 21” anti-smoking group’s push to raise smoking age and back enforcement actions against illegal vaping devices that “jeopardize harm reduction potential for alternative vapor products.”
Altria Group, a tobacco giant, partly owns the company. The company said it was in talks to settle lawsuits brought against it by other states.
In recent years, vaping has exploded among young people. This raised concerns from both health professionals and state and federal regulators. A September FDA report showed that there was a sharp drop in vaping among young people as schools closed down due to the coronavirus epidemic.
It was the second straight year of vaping declines. This occurred following the 2019 federal law, which raised the purchasing age for vaping and tobacco products from 18 years to 21. Shortly thereafter, nearly all flavors of small cartridge-based ecigarettes were banned by the FDA. This was the reason for the dramatic increase in teens using e-cigarettes.