As part of the settlement JUUL Labs will also need to comply with a series of strict injunctive terms severely limiting their marketing and sales practices. (JUUL device, marketing photo.)
After a two year multistate investigation into the vaping company JUUL Labs Inc. the e-cigarette giant has agreed to pay $438.5 million to 34 states and territories, including Nevada.
Nevada will receive more than $14 million from Juul Labs Inc.
State Attorney General Aaron Ford signed onto the investigation of JUUL’s marketing and sales practices in 2019. The investigation looked into whether the company targeted youth, claims about the product’s nicotine content, and their claims about risks, safety and effectiveness as a smoking cessation device.
“For years, JUUL Labs knowingly marketed its product to underage users, directly working to expose minors to nicotine use and abuse,”Ford said in a 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.”
Once finalized, the settlement will require the $438.5 million to be paid out over a period of six to ten years, with the amounts paid increasing the longer the company takes to make the payments.
As part of the settlement JUUL Labs will also need to comply with a series of strict injunctive terms severely limiting their marketing and sales practices.
According to attorneys general, the multistate investigation revealed that JUUL Labs became a dominant player in the e-cigarette market by “relentlessly marketing to underage users” and relying on age verification techniques the company knew were ineffective. The company also sold its product in flavors known to be attractive to underage users and specifically designed the product to be less harsh on the throats of young and inexperienced users, said the attorneys general.
In addition, the investigation found the company’s original packaging did not clearly disclose that it contained nicotine and misled customers to believe that one JUUL pod was the equivalent of smoking one pack of combustible cigarettes.
JUUL’s were also marketed as a product customers could use to effectively quit smoking without FDA approval.
Under the deal, Juul must refrain from marketing to youth, depicting anyone under 35 years old in advertising, using paid product placement, advertising on public transportation and billboards, and advertising using paid social media influencers or using cartoons in ads, among other marketing activities, according to Ford’s statement.
JUUL Labs will be required to restrict its advertising to outlets with an audience made up of 85% adults.
Teen use of e-cigarette products has been a growing issue in Nevada. According to the Nevada Department of Health and Human Services, half of all Nevada middle and high schoolers in 2015 had tried vaping. A quarter of all middle and high schoolers were current users.
Nevada lawmakers have taken action to combat the rise in vaping. In 2019, the Nevada Legislature passed Senate Bill 263, which placed vape products in the same category as tobacco products — subjecting them to a higher tax rate of 30%. Some of the revenue generated from that tax is also being earmarked for additional vaping prevention measures.
That same year Nevada approved the use of $1.7 million to collect data, conduct epidemiological research, host a vaping and cannabis summit, and launch a marketing campaign to educate the public.
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