Electronic cigarette-maker Juul has agreed to pay North Carolina $40 million to settle the first in a series of cases against the company for allegedly marketing its products to children.
“This win will go a long way in keeping JUUL products out of kids’ hands, keeping its chemical vapor out of their lungs, and keeping its nicotine from poisoning and addicting their brains,” said North Carolina Attorney General Josh Stein. “I’m incredibly proud of my team for their hard work on behalf of North Carolina families.”
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The company denied any wrongdoing and argued that it did not deceptively market its products to teenagers while concealing its addictiveness. Still, Juul will be forced to pay the state $40 million over six years, money that will be directed at efforts “to help people quit e-cigarettes, prevent e-cigarette addiction, and research e-cigarettes.”
The state Legislature will devise a plan for appropriating the funds to different addiction cessation efforts. North Carolina’s Health and Human Services Secretary Mandy Cohen will work with state lawmakers to recommend “which proven programs to fund,” Stein told the Washington Examiner Monday.
The settlement also stipulates that Juul cannot use social media to advertise to children, requires that all products be sold behind the counter at stores where all IDs must be scanned before purchasing, and forces Juul to stop advertising its products near schools and sponsoring sporting events and concerts.
“The changes to [Juul’s] business practices that we forced them to agree to are going to be meaningful, the amount of money they’re going to give to our state to help people who are struggling with nicotine addiction is going to be important,” Stein said. “It underscores that states and federal regulators need to make sure that the entire industry does a better job protecting kids.”
Part of the settlement also requires that Juul hire “secret shoppers” who will go to at least a thousand stores that sell its products to monitor clerks’ adherence to the court stipulations, such as thorough ID checks using scanners.
“If stores are selling the product without verifying the purchaser’s age, there need to be sanctions, and [Juul] agreed to sanction their retailers that don’t live up to the law,” Stein said.
He added that the case against Juul was “fundamentally about protecting kids from corporate greed.”
The issue of teenagers vaping was shunted to the side last year after the threat of COVID-19 in the United States was made more evident. Congress had taken steps to limit youth use as well as companies’ ability to sell flavored products. The House passed legislation banning the sale of flavored electronic cigarette liquids by a vote of 213-195 in February 2020 but has remained in committee in the Senate since March that year.
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Monday’s settlement is expected to have profound implications for the tobacco industry, which is facing renewed scrutiny under the Biden Justice Department. The Food and Drug Administration issued a ban in April on one type of flavored tobacco, menthol. It was a response to pressure from civil rights groups on federal regulators to crack down on the tobacco industry’s aggressive marketing to black communities.
The ban did not go immediately into effect. The FDA rule-making process could take years before a ban on menthol cigarettes goes into effect, and the administration will face challenges from the powerful industry that lobbied hard against the Trump administration’s efforts to regulate it.
