Juul Labs agrees to pay $438.5 million to 33 states and Puerto Rico to settle probe into marketing tactics that targeted teens

• Juul Labs has agreed to pay $438.5 million to settle a multi-state probe into the vaping company.
• The states had found that the firm advertised its products to underage youth.
• The settlement also involves a slew of changes affecting how Juul can advertise to young people.

Electronic cigarette manufacturer Juul Labs has agreed to pay $438.5 million to settle a multi-state investigation that found it had marketed vaping products to underage smokers, authorities said Tuesday.

The total sum is to be paid out to 33 states and Puerto Rico — all of which launched a joint probe — over six to 10 years, said a statement from Connecticut Attorney General William Tong's office.

The settlement sum increases the longer Juul takes to pay it off, the statement noted. For instance, the vaping company would have to pay $476.6 million if it extended the payment period to the full 10 years.

Per the statement, the investigation found Juul had "relentlessly marketed to underage users" with launch parties, advertisements with young and attractive models, social media posts, and free samples.

"Juul's cynically calculated advertising campaigns created a new generation of nicotine addicts," Tong wrote in the statement. "They relentlessly marketed vaping products to underage youth, manipulated their chemical composition to be palatable to inexperienced users, employed an inadequate age verification process, and misled consumers about the nicotine content and addictiveness of its products."

His criticism has been echoed in hundreds of personal lawsuits in the US filed on behalf of teenagers and others who said they've become addicted to Juul's products. The vaping company has denied that it marketed its products to teens.

As part of the deal, which is still being finalized, Juul has agreed to refrain from using cartoons, paid influencers, paid product placement, and free samples in its marketing. Its advertisements will also not be allowed to depict anyone under the age of 35, and the company has also agreed to stop funding education programs. 

In addition, Juul has been blocked from advertising on billboards and public transport and has to require age verification on its website's landing page.

Juul said in a statement that the settlement is part of its "ongoing commitment to resolve issues from the past."

"We remain focused on the future as we work to fulfill our mission to transition adult smokers away from cigarettes – the number one cause of preventable death – while combating underage use," its statement read.

The company launched in 2015 and has grown to lead the US e-cigarette market with a 35.7% industry share, according to June reports.

In the years after its launch, Juul's nicotine vaporizer became particularly popular in high schools, with students saying their schools had become overrun with vapers.

In June, the Food and Drug Administration ruled that Juul would no longer be able to sell its e-cigarettes and must remove its products from the US market immediately.

The FDA said Juul could not provide sufficient evidence showing that its vape pods didn't contain any hazardous chemicals. Juul said it would appeal the decision and that it would "ultimately" show that its products meet public health standards.