Juul to Pay $462 Million in Compensation to Six U.S. States

Today, on April 13, it was reported that JUUL Labs Inc has agreed to pay $462 million to settle allegations from six U.S. states, including New York and California, regarding its illegal sales of products to minors.

The agreement reached with New York, California, Colorado, Illinois, Massachusetts, New Mexico, and Washington D.C. marks the latest in a series of legal settlements JUUL has made with various cities and states across the country.

States that have disclosed amounts include:

JUUL will pay New York $113 million as part of a youth vaping settlement;

JUUL has been ordered to pay $15.2 million to Washington D.C.;

Illinois reached a $67.6 million settlement with JUUL;

Colorado will receive $32 million from JUUL;

Massachusetts will receive $41 million;

With this transaction, JUUL has now settled with 45 states for over $1 billion. The company does not admit to any wrongdoing in the settlement, which also includes Colorado, Illinois, Massachusetts, New Mexico, and Washington D.C.

The funds will be paid over eight years. California will receive $175.8 million, Illinois will receive $67.6 million, Massachusetts will receive $41.7 million, Colorado will receive $31.7 million, New Mexico will receive $17 million, and Washington D.C. will receive $15 million.

JUUL announced on December 6 that it had secured an investment to cover the settlement costs. The company has been negotiating with two early investors to fund a rescue plan covering legal liabilities.

According to Reuters, states have accused JUUL of falsely advertising that its vapes are more addictive than cigarettes and targeting minors with enticing advertising campaigns.

New York Attorney General Letitia James stated at a press conference: JUUL's lies have led to a nationwide public health crisis and have handed addictive products to minors who believe they are doing something harmless.

The company stated that since the fall of 2019, the usage rate of its products among individuals under 18 has decreased by 95%, after the company changed its marketing practices as part of a company-wide reset.

In September, JUUL Labs agreed to pay nearly $440 million to settle a two-year investigation into its vaping products marketing by 33 states.

JUUL's vaping products were briefly banned in the U.S. in late June after the FDA concluded that the company failed to demonstrate that the sale of its products was appropriate for public health. However, after an appeal, the health regulator suspended the ban and agreed to conduct an additional review of JUUL's marketing application.

In October, JUUL revealed details of its MDO appeal. In late September, JUUL shareholder Altria Group exercised its option to terminate the non-compete agreement with the vaping manufacturer.

Last month, Altria Group converted its entire investment in JUUL Labs into a non-exclusive, irrevocable global license for certain heated tobacco intellectual property.