Juul settles multi-state Vaping investigation for $438.5 million

Juul Labs, which fights for its existence in the United States, was expected on Tuesday to agree to pay $438.5 million to settle an investigation by nearly three dozen states into its continued operations. marketing and sales that they attribute to the nation’s teen vaping crisis.

The company says it doesn’t admit any wrongdoing in the settlement, but it is trying to “resolve issues from the past” pending a decision by the Food and Drug Administration on the matter. whether or not they are allowed to continue selling their products. Juul has attempted to reposition itself as a seller of vaping products that can help adults quit smoking, in an effort to restore its tarnished reputation and improve its dwindling market value. its.

The proposed agreement prohibits the company from marketing to teenagers, funding education in schools, and misrepresenting nicotine levels in its products. But Juul stopped some marketing and recalled many flavored pods appealing to teenagers, under public pressure from lawmakers, parents and health professionals a few years ago. when the vaping crisis was at its peak.

“We think this will go a long way in stemming the tide of youth vaping,” said William Tong, Connecticut’s attorney general, at a news conference on Tuesday. “We are under no illusions and cannot claim that it will stop youth vaping. It continues to be an epidemic. It continues to be a big problem. But we have essentially eliminated a large part of what was once the market leader.”

According to him, investigations at many places show that the company attracts young people by hiring young models, using social networks to flirt with teenagers and giving away free samples. And, he added, the investigation revealed that the company has a “foam” age verification system for its products, and that 45% of their Twitter followers are between the ages of 13 and 17.

Jason Miyares, the attorney general of Virginia, pointed out in a statement that the company’s previous strategy was to sell flavors like mango and crème brûlée that appealed to young people as well as the device’s sleek, easy-to-hide design. A provision of the agreement prohibited the company from depicting anyone under the age of 35 in its marketing images, Mr. Miyares’ statement said.

Juul said Tuesday that the settlement is “consistent with our current business practices that we began working on following a company-wide reset in the fall of 2019.”

“We remain focused on the future as we work to fulfill our mission of turning adult smokers away from tobacco – the number 1 preventable cause of death – while combating smoking. adolescent drug use,” the company statement said.

The agreement does not resolve all of the company’s legal battles. While Juul had previously reached agreements in lawsuits brought by the attorney general from North Carolina, Washington, Louisiana and Arizona, 9 similar cases remain. Major lawsuits filed by New York and California are among those still pending. And about 3,600 lawsuits by individuals, school districts and local governments, have been consolidated in a lawsuit still underway through a California court.

Juul is still selling mint-flavored cigarettes and pods and vaping products while its application for permanent sale is under review by the FDA. the agency initially denied the company’s request in June, Juul said that Juul had failed to provide enough evidence that its products would benefit public health, and cited “incomplete and conflicting” data from the company.

Juul gets one temporary recovery in court. It has since argued that it has helped two million adult smokers quit traditional cigarettes, and it is the exception to the agency’s conclusion about the chemicals in their products. The FDA later denied its denial, announcing that it would conduct an additional review of the “scientific issues” in the application.

States will differ in how they use settlement funds, which will be paid out over six to 10 years. A spokeswoman for the Connecticut attorney general’s office said its share (more than $16 million) would go toward vaping and nicotine addiction and addiction. Texas is estimated to receive nearly $43 million, and Virginia lists its stake at $16.6 million.

Meredith Berkman, co-founder of Parents Against Vaping Electronic Cigarettes, said she was delighted to hear about the deal. She joined the group after Juul sent a representative to her 9th grade son’s high school to speak at a conference in 2018. Her son continued that the representative described product description as “completely safe”, a conversation Mrs. Berkman recounted in a congressional hearing in 2019.

Since then, she said the group has heard from hundreds of families that their teens have become addicted to vaping Juul and other marijuana and nicotine devices. Some young people have become severe illness from vaping and others who have had to go to drug rehab to kick the nicotine habit.

Ms Berkman said: ‘It was Juul who went to the scene and opened this horrible Pandora’s box. “No amount of money can undo the harm caused by Juul’s targeting and marketing to teenagers whose use of the company’s tailor-made flavored products has made many children addicted. severe nicotine and physical harm.”

Teen e-cigarette use appears to have declined in recent years, although the coronavirus pandemic has created new impetus for top surveillance of youth tobacco use, a survey found. The survey was conducted at schools by the Centers for Disease Control and Prevention. In March, that survey shows that nearly 8 percent, or about two million students, reported using e-cigarettes within the past 30 days.

While Juul used to be a favorite among young people, the survey found that candy and fruit-flavored Puff Bars were the most popular among young people, with Juul coming in fourth among students. Data from IRI, a marketing research firm, suggests that the brand attracts more mature customers by competing closely with another brand, Vuse vapes, for market leadership, with about 30% of recent sales.

Altria, which in December 2018 bought a 35% stake in Juul for $12.8 billion, said in a recent investor filing that the company’s stake is valuable now about $450 million — roughly the amount Juul just agreed to pay to settle investigations in nearly three dozen states and Puerto Rico.

After attracting huge attention to teenagers, Juul has lost significant market share and value under pressure from public opinion and stopped selling the most appealing flavors to young people.

While the vaping market still accounts for a small portion of total sales of cigarettes and other snuff products, the FDA has repeatedly failed in its efforts to curb youth-friendly e-cigarettes that continue to emerge with New candy colors and flavors. After the agency tried to crack down on existing brands, companies and markets turned to synthetic nicotine in an effort to evade regulations.

In March, Congress gave the FDA the authority to bring synthetic nicotine to market. But the agency is methodical move, sifted through about a million applications it received from manufacturers of non-tobacco nicotine products in the spring. To some extent, it must proceed carefully to ensure that judgments stand up in court.

The agency also keep reviewing and approved several marketing authorization applications submitted years ago for top vapes products that tend to be sold in service stations and convenience stores. But it recently said that it does not expect to complete its review of submitted applications before next year.

The parties to the settlement are: Alabama, Arkansas, Connecticut, Delaware, Georgia, Hawaii, Idaho, Indiana, Kansas, Kentucky, Maryland, Maine, Mississippi, Montana, North Dakota, Nebraska, New Hampshire, New Jersey, Nevada, Ohio , Oklahoma, Oregon, Puerto Rico, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Vermont, Wisconsin and Wyoming.

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