WISCONSIN — Wisconsin will receive at least $14.4 million as part of a larger agreement between 33 states and Juul Labs, according to the Wisconsin Department of Justice.
The bipartisan investigation found that Juul, a powerhouse in the vaping market, became a leader in the market by “willfully engaging in an advertising campaign that appealed to youth,” although e-cigarettes are unhealthy for kids to use, and illegal for them to purchase.
The two-year investigation found that the company “relentlessly” marketed to underage demographics with launch parties, ads, social media and free samples. The company utilized young and “trendy” models to appeal to younger markets. Furthermore, Juul marketed easily concealed, sleek designs in addition flavors known to be popular with underage smokers.
“Targeting youth for e-cigarette sales is appalling,” said Attorney General Josh Kaul. “This agreement brings accountability for Juul's conduct and prohibits Juul from engaging in the types of marketing practices it had been using to promote vaping among young people.”
Per the investigation, Juul “manipulated the chemical composition of its product to make the vapor less harsh on the throats of the young and inexperienced users.” Juul utilized age verification processes it allegedly knew were ineffective in order to maintain its young customers.
The investigation also found that Juul's original packaging did not clearly communicate that it contained nicotine, implying it contained a lower concentration of nicotine than it actually did. The investigation found that Juul “misrepresented that its product was a smoking cessation device without FDA approval to make such claims.”
Additionally, Juul misled its customers to think that consuming one Juul pod was the same as smoking one pack of combustible cigarettes.
The settlement, per the Wisconsin DOJ, will distribute a total of at least $438.5 million among 33 states. Payments will be made over six to 10 years. The longer the company takes to make those payments, the higher the payment amounts will be, per Wisconsin DOJ. If Juul opts to extend the payment period to 10 years, the final settlement amount would then be $476.6 million.
The settlement also requires Juul to adhere to terms that will “severely” limit marketing and sales practices. Juul will be limited as to where they can display their product and where it can be accessed in stores. Both online and retail sales will be limited. There will be new retail protocols in place and consumers age must be verified on all sales.
With the new settlement, Juul can no longer market to youth, fund education programs, use cartoons, show people under 35-years-old in its marketing campaigns, use paid product placement, sell flavors that are not FDA-approved, sell brand name merchandise, allow website access without age verification, have sponsorship or naming rights, mislead users about nicotine levels, use nicotine representations that are not approved by the FDA, advertise on public transportation, advertise on billboards, advertise at outlets where less than 85% of the audience are adults, use paid influencers, advertise on social media (other than testimonials by individuals over the age of 35, with no health claims), use direct-to-consumer ads or give free samples.
Wisconsin DOJ said the involved states are still finalizing settlement documents, which could take three to four weeks.
“This settlement is a win for Wisconsin in our efforts to protect the health and safety of our youth from harmful nicotine products,” said Wisconsin Department of Health Services Secretary Karen Timberlake. “For too long, middle and high schoolers have been the target of manipulative and harmful marketing practices for products like e-cigarettes. I applaud the efforts of the Wisconsin DOJ, along with other states and partners, to take action to hold Juul accountable for exposing our youth to the dangers of nicotine, addiction, and a variety of new health risks.”
The other states that are a part of the investigation include Alabama, Arkansas, Connecticut, Delaware, Georgia, Hawaii, Idaho, Indiana, Kansas, Kentucky, Maryland, Maine, Mississippi, Montana, North Dakota, Nebraska, New Hampshire, New Jersey, Nevada, Ohio, Oklahoma, Oregon, Puerto Rico, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Vermont and Wyoming.