Juul Ordered to Pay $40 Million to North Carolina Over Alleged Marketing to Teens

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Justin Sullivan/Getty Juul products

On Monday, North Carolina became the first U.S. state to hold Juul Labs Inc. accountable for the company's contribution to the teen vaping epidemic.

According to a copy of the final consent judgment, Juul Labs is ordered to pay $40 million to North Carolina over the course of six years as a settlement for lawsuits claiming the company's marketing fueled the state's widespread nicotine use among teens.

"For years, JUUL targeted young people, including teens, with its highly addictive e-cigarette," said Attorney General Josh Stein in a statement. "It lit the spark and fanned the flames of a vaping epidemic among our children – one that you can see in any high school in North Carolina."

"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," he continued. "I'm incredibly proud of my team for their hard work on behalf of North Carolina families. We're not done – we still have to turn the tide on a teen vaping epidemic that was borne of JUUL's greed. As your attorney general, I'll keep fighting to prevent another generation of young people from becoming addicted to nicotine."

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The agreement states that Juul will establish new business practices in North Carolina, including removing marketing that appeals to individuals under 21 and limiting sales to state residents. Stein said money from the settlement will also go toward programs that help and prevent e-cigarette addiction.

Juul Labs also released a statement on Monday following the settlement announcement.

"This settlement is consistent with our ongoing effort to reset our company and its relationship with our stakeholders, as we continue to combat underage usage and advance the opportunity for harm reduction for adult smokers," the company statement read. "Importantly, we look forward to working with Attorney General Stein and other manufacturers on the development of potential industrywide marketing practices based on science and evidence. In addition, we support the Attorney General's desire to deploy funds to generate appropriate science to support North Carolina's public health interventions to reduce underage use."

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The organization's statement continued, "We seek to continue to earn trust through action. Over the past two years, for example, we ceased the distribution of our non-tobacco, non-menthol flavored products in advance of FDA guidance and halted all mass market product advertising. This settlement is another step in that direction."

North Carolina is among several states that have filed lawsuits against the e-cigarette giant. Last year, the Massachusetts attorney general's office filed a lawsuit that alleged Juul bought ad space on websites "highly attractive to children, adolescents in middle school and high school and underage college students" such as Nickelodeon, Cartoon Network and Seventeen magazine.

According to CBS MoneyWatch, Matt Myers, president of the Campaign for Tobacco-Free Kids, said Monday's settlement is "a step in the right direction," but, "unless, and until, the FDA does act, we won't solve the problem."