Juul Labs to Pay $462 Million to Six US States

Juul Labs Inc has agreed to pay $462 million to settle claims by six U.S. states including New York and California that it unlawfully marketed its products to minors, the states announced on Wednesday.

With the deal, Juul has now settled with 45 states for more than $1 billion. The company did not admit wrongdoing in the settlement, which also included Colorado, Illinois, Massachusetts and New Mexico as well as the District of Columbia.

Juul announced on Dec. 6 it has secured an investment to cover the cost of the settlement. The company has been in talks with two early investors to fund a bailout  that would cover legal liabilities.

The states had accused Juul of falsely marketing its e-cigarettes as less addictive than cigarettes and targeted minors with glamorous advertising campaigns, according to Reuters.

“Juul’s lies led to a nationwide public health crisis and put addictive products in the hands of minors who thought they were doing something harmless,” New York Attorney General Letitia James said at a news conference.

The company said that use of its products by people under age 18 had fallen by 95 percent since the fall of 2019, when it changed its marketing practices as part of a “company-wide reset.”

In September, Juul Labs agreed to pay nearly $440 million to settle a two-year investigation by 33 U.S. states into the marketing of its vaping products.

Juul’s e-cigarettes were briefly banned in the U.S. in late June after the FDA concluded that the company had failed to show that the sale of its products would be appropriate for public health. But following an appeal, the health regulator put the ban on hold and agreed to an additional review of Juul’s marketing application.

In October, Juul published the details of its MDO appeal. In late September, Juul shareholder Altria Group exercised the option to be released from its noncompete deal with the e-cigarette maker.

Last month, Altria Group exchanged its entire investment in Juul Labs for a non-exclusive, irrevocable global license to certain of Juul’s heated tobacco intellectual property.