Texas will get $42.8 million in Juul youth marketing settlement

Hou News by Michael Murney / September 06, 2022 at 02:34PM

Juul Labs, the company behind the high-nicotine vaping products long blamed for driving a spike in e-cigarette use amongst young people in recent years, has tentatively agreed to pay $439 million—$42.8 million of which will go to the state of Texas—after a multistate probe into its advertising strategies.

Texas is one of 33 states and territories involved in the two-year investigation, which found that Juul pushed its electronic cigarettes with underage teens through a variety of marketing tactics including launch parties, product giveaways and intentional use of young-looking models in its ads. 

Juul was aggressive in its deployment of these tactics, according to Texas Attorney General Ken Paxton, who co-led the investigation alongside Connecticut Attorney General William Tong and Oregon Attorney General Ellen F. Rosenblum. "Juul relentlessly marketed to underage users… with a technology-focused, sleek design that could easily be concealed," Paxton said in a statement Tuesday afternoon.  The investigation also found that Juul engaged in deceptive marketing by failing to clearly disclose that their product contained nicotine on its packaging, Paxton explained in his Tuesday statement.   

Juul agreed to comply with significant restrictions on its marketing operations as part of the settlement agreement: the company's advertising to people under 35 will be limited, and new requirements for age verification during online and in-store purchases will be imposed, amongst other new limits and guidelines, Paxton said. Though the FDA announced earlier this year that they were pulling Juul products off shelves, the company won a "temporary reprieve" that allowed sales to continue.

Texas' $42.8 million payment will arrive in parts over a six- to 10-year span; Juul will shell out nearly $440 million between all of the involved states and territories to settle the probe over a similar period, according to Paxton. The total settlement payout is equal to about a quarter of Juul's 2021 U.S. sales totals: according to the Associated Press, Juul made about $1.9 billion in sales in the U.S. alone.