E-cig maker Juul to pay $40M to NC, change business practices, state attorney general says

RALEIGH, N.C. -- North Carolina Attorney General Josh Stein announced Monday that he has reached a settlement with e-cigarette maker Juul that will require it to pay $40 million and make "drastic changes" to how it operates in the state.

North Carolina is the first state in the nation to successfully hold Juul accountable for its role in spiking teen use and dependence on e-cigarettes, Stein's office said in a release.

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"For years, Juul targeted young people, including teens, with its highly addictive e-cigarette," Stein said. "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."

Stein began looking into Juul in 2018 and sued the company in 2019 claiming the e-cig maker was designing, marketing, and selling its e-cigarettes to attract young people and for misrepresenting the potency and danger of nicotine in its products.

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"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," Stein said. "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."

As part of the deal, Stein said Juul is making several commitments:

• No marketing that appeals to people younger than 21.

• No using most social media advertising, influencer advertising, outdoor advertising near schools, and sponsoring sporting events and concerts.

• No claims that compare the health effects of using JUUL with the health effects of using combustible cigarettes in its marketing materials.

• No online sales to anyone not age verified by an independent verification system and making sure third-party sales partners do the same.

• No retail sales to anyone not age verified using a barcode scanner.

• Ensure its products are sold behind counters so shoppers cannot access them without a shop employee's assistance.

• Maintain a retailer compliance secret shopper program in North Carolina to ensure these measures are followed and hold accountable retailers that fail.

• No new flavors or nicotine content levels without FDA authorization.

READ MORE: Study finds texting program helped 76% quit vaping

"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," a company spokesperson told ABC11. "Importantly, we look forward to working with Attorney General Stein and other manufacturers on the development of potential industry-wide marketing practices based on science and evidence ... 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."

Juul will pay $40 million to the state during the next six years.

"The company has also agreed to participate with other members of the industry, with the attorney general's office, other regulators and experts in the development of industry standards to insure that youth are not caught up with this product," said Swain Wood, first assistant attorney general.

The money is supposed to be used on programs to help people quit e-cigarettes, prevent e-cigarette addiction, and research e-cigarettes, Stein said.

"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," a Juul spokesperson said.