NORTH DAKOTA (KXNET) — Attorney General Drew H. Wrigley announced Tuesday a $438.5 million agreement in principle between JUUL Labs and 34 states and territories resolving a two-year bipartisan investigation into the e-cigarette manufacturer’s marketing and sales practices.

According to a news release, the State of North Dakota will receive $6,028,211.45 in monetary relief under the settlement that will be paid out over a period of six to 10 years.

In addition to the financial terms, the settlement provides for a series of important and strict injunctive terms intended to severely limit JUUL’s marketing and sales practices.

“We are very pleased to be part of this important and historic consumer protection action aimed at protecting young consumers targeted by misleading e-cigarette advertising and marketing,” said Wrigley. 

JUUL was, until recently, the dominant player in the vaping market.

The multistate investigation revealed that JUUL attained this position by willfully engaging in an advertising campaign that appealed to youth, even though its e-cigarettes are both illegal for them to purchase and unhealthy for youth to use.

The investigation found that JUUL relentlessly marketed to underage users with launch parties, advertisements using young and trendy-looking models, social media posts, and free samples.

It marketed a technology-focused, sleek design that could be easily concealed and sold its product in flavors known to be attractive to underage users.

JUUL also manipulated the chemical composition of its product to make the vapor less harsh on the throats of young and inexperienced users.

To preserve its young customer base, JUUL relied on age verification techniques that it knew were ineffective.

The investigation also revealed that JUUL’s original packaging was misleading in that it did not clearly disclose that it contained nicotine and implied that it contained a lower concentration of nicotine than it actually did and that consumers were misled to believe that consuming one JUUL pod was the equivalent of smoking one pack of combustible cigarettes.

As part of the settlement, JUUL has agreed to refrain from:

  • Youth Marketing
  • Funding education programs
  • Depicting persons under age 35 in any marketing
  • Use of cartoons
  • Paid product placement
  • Sale of brand name merchandise
  • Sale of flavors not approved by the FDA
  • Allowing access to websites without age verification on the landing page
  • Representations about nicotine not approved by the FDA
  • Misleading representations about the nicotine content
  • Sponsorships/naming rights
  • Advertising in outlets unless 85% audience is adult
  • Advertising on billboards
  • Public transportation advertising
  • Social media advertising (other than testimonials by individuals over the age of 35, with no health claims)
  • Use of paid influencers
  • Direct-to-consumer ads unless age-verified
  • Free samples

The agreement also includes sales and distribution restrictions, including where the product may be displayed/accessed in stores, online sales limits, retail sales limits, age verification on all sales, and a retail compliance check protocol.

The other states signed on to the agreement with JUUL are Alabama, Arkansas, Connecticut, Delaware, Georgie, Hawaii, Idaho, Indiana, Kansas, Kentucky, Maryland, Maine, Mississippi, Montana, Nebraska, New Hampshire, New Jersey, Nevada, Ohio, Oklahoma, Puerto Rico, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Vermont, Wisconsin, and Wyoming.