Juul Labs has tentatively agreed to pay $438.5 million to settle an investigation by nearly three dozen states that focused on the company’s sales and marketing practices that they claim fueled the teenage vaping crisis.
The investigation found that the company appealed to young people by hiring young models, using social media to court teenagers and giving out free samples. William Tong, Connecticut’s attorney general, said in a news conference that the investigation found that the company had a “porous” age verification system for its products and 45 percent of its Twitter followers were ages 13 to 17.
“We think that this will go a long way in stemming the flow of youth vaping,” Mr. Tong said. “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 huge problem. But we have essentially taken a big chunk out of what was once a market leader.”
Juul said on Tuesday that the settlement “is a significant part of our ongoing commitment to resolve issues from the past. The terms of the agreement are aligned with our current business practices which we started to implement after our companywide reset in the fall of 2019.”
But the company said it was not acknowledging any wrongdoing in the settlement.
The tentative settlement prohibits the company from marketing to youth, from funding education in schools and misrepresenting the level of nicotine in its products. Juul had already discontinued several marketing practices and withdrawn many of its flavored pods that appealed to teenagers, under public pressure from lawmakers, parents and health experts a few years ago when the vaping crisis was at a peak.
The company’s ability to continue to sell its products has been in question in recent months. The Food and Drug Administration announced in June that it was denying the company’s request for marketing authorization to sell the vapes, saying its application lacked evidence to prove they would benefit public health. The agency also cited “insufficient and conflicting” data from the company. The company quickly went to court and got a temporary reprieve.
The company responded days later that it helped two million adult smokers quit combustible cigarettes and took exception with the agency’s conclusions about chemicals in its products. The F.D.A. then announced that it would allow the products to stay on the market pending additional review of “scientific issues.”