RALEIGH, N.C. — North Carolina became the first state to reach a settlement with Juul over concerns that its product attracts underage users.
Under a consent order reached with State Attorney General Josh Stein, Juul will pay $40 million and make changes to the way it conducts business. The $40 million, which Juul will pay to the state over the next six years, will fund programs to help people quit e-cigarettes, prevent e-cigarette addiction, and research e-cigarettes.
"For years, Juul targeted young people, including teens, with its highly addictive e-cigarette. It lit the spark and fanned the flames of a vaping epidemic among our children — one that you can see in any high school in North Carolina," Stein said in a statement.
The state will continue to fight the teen vaping epidemic and its efforts to prevent underage nicotine use, he added.
"This settlement is consistent with our ongoing effort to reset our company and its relationship with our stakeholders, as we continue to combat underage usage and advance the opportunity for harm reduction for adult smokers. Importantly, we look forward to working with Attorney General Stein and other manufacturers on the development of potential industrywide marketing practices based on science and evidence," Juul said in a statement.
"In addition, we support the Attorney General's desire to deploy funds to generate appropriate science to support North Carolina's public health interventions to reduce underage use," the company added.
North Carolina sued Juul in 2019 for designing, marketing and selling its electronic cigarettes to attract young people and for misrepresenting the potency and danger of nicotine in its products.
As part of the consent order, Juul agreed to make several commitments about its business practices enforceable in North Carolina court. They include:
- No marketing that appeals to people under the age of 21;
- Not using most social media advertising, influencer advertising, outdoor advertising near schools, and sponsoring sporting events and concerts;
- No claims that compare the health effects of using Juul with the health effects of using combustible cigarettes in its marketing materials;
- No online sales to anyone not age verified by an independent verification system and making sure third-party sales partners do the same;
- No retail sales to anyone not age verified using a barcode scanner;
- Ensure its products are sold behind counters so shoppers cannot access them without a store employee's assistance;
- Maintain a retailer compliance secret shopper program in North Carolina to ensure these measures are followed and hold accountable retailers that fail; and
- No new flavors or nicotine content levels without authorization from the Food and Drug Administration.
"We seek to continue to earn trust through action. Over the past two years, for example, we ceased the distribution of our non-tobacco, non-menthol flavored products in advance of FDA guidance and halted all mass market product advertising. This settlement is another step in that direction," Juul said.