JUUL Labs Reaches $14.5M Settlement With AZ Over Youth-Targeted Marketing

E-cigarette company JUUL Labs has reached a $14.5 million settlement with the state of Arizona. The settlement comes after the state filed a lawsuit in 2020 alleging the company targeted young people in its campaign ads without letting them know about the risks associated with vaping.

Republican Attorney General Mark Brnovich, who is currently running for a Senate seat, expressed that the company was "exploiting young people with tactics such as fruit flavors, social media campaigns, and free giveaways."

While JUUL Labs agreed to settle the claims, it did not admit any wrongdoing. However, JUUL Labs did agree to change parts of how it conducts business as far as advertising its product goes. Additionally, the company has agreed to put in place a stricter monitoring program for its retailers. As part of the monitoring, the company will do compliance checks for at least 25 stores every month. These compliance checks will allow the company to ensure that retailers are not selling their products to minors.

Brnovich shared that the settlement "holds JUUL accountable for its irresponsible marketing efforts that pushed Arizona minors toward nicotine and the addiction that follows."

Roughly $12.5 million of the settlement will go toward funding youth education programs that deter minors from smoking. The remaining $2 million has been set aside for litigation reimbursement on behalf of the state and funding future consumer fraud protection.

In a statement, JUUL Labs shared that this settlement is a path forward for the brand to “reset” the company. JUUL Labs added that it will continue working with stakeholders including the federal and state governments "to advance a fully regulated, science-based marketplace for vapor products. As part of that process, we will continue to support Tobacco 21 and enforcement against illicit and illegally marketed products, such as certain disposables, that jeopardize the harm reduction potential of alternative vapor products."

This latest settlement comes on the heels of a June settlement JUUL Labs reached with North Carolina. North Carolina brought forward a similar lawsuit that accused the e-cigarette giant of advertising to minors and marketing practices that were tailored to a young audience. In that settlement, JUUL Labs agreed to pay the state $40 million to end the lawsuit.

In both complaints, JUUL Labs has been accused of using questionable tactics including using flavors marketed toward minors. As a result, Juul has pulled popular flavors including mango and cucumber, creme, and fruit.

The CDC has warned about the dangers of using e-cigarettes like the ones produced by JUUL Labs. According to the CDC, JUUL e-cigarettes contain high levels of nicotine with one JUUL pod containing as much nicotine as 20 packs of regular cigarettes. The CDC also outlines that roughly “two-thirds of JUUL users aged 15 – 24 do not know that JUUL always contains nicotine.”

The FDA has since issued a warning about the rise in e-cigarette usage among minors. “The United States has never seen an epidemic of substance use arise as quickly as our current epidemic of youth use of e-cigarettes,” the FDA shared in a press release in early 2020. The FDA also points to a 2013-2014 study that shows many minors who begin using e-cigarettes usually start with fruity flavors.