Vape maker Juul will pay $462 million to six states for targeting teens

Juul cartridges for sale in a store in Atlanta, Georgia.ELIJAH NOUVELAGE (REUTERS)

Juul, maker of vapers (electronic cigarettes) popular among teens, will pay $462 million (420 million euros) to six states and Washington DC as part of a court settlement for targeting their products at young people.

New York, California, Colorado, Illinois, Massachusetts and New Mexico had launched legal action against the company, which has been forced to lay off hundreds of employees to cut costs and pay dozens of lawsuits brought by individuals, cities and state governments.

This Wednesday is the highest compensation paid agreed by the company to date.

The agreement has been announced by the prosecutors of the States involved in the lawsuit.

"Today is a new step in our fight to protect our children from being hooked on vapers and nicotine," said Rob Bonta, the California prosecutor.

The entity, the most populous in the United States, had gone to court in November 2019 to see how the consumption of electronic cigarettes had skyrocketed among minors thanks to cartridges with flavors such as mango, mint, crème brûlée and cucumber. .

The percentage of high school students who had vaped went from 11.7% in 2017 to almost 28% two years later.

This despite the fact that all tobacco-related products are prohibited for those under 21 years of age.

California will now receive $175.8 million from Juul, the largest chunk of the deal reached with the company.

Bonta has said that the region will use the resources to fund research and education to reduce dependence on tobacco products.

New York will go in the same direction.

"Juul ignited a national health crisis by putting its addictive products in the hands of minors and convincing them that they were harmless (...) Today they are paying the price for the damage they have caused," state attorney Letitia said in a statement. James.

New York will use the 112 million that corresponds to the agreement in campaigns to fight electronic cigarettes.

Similar to other lawsuits, the settlement places restrictions on Juul's marketing, sales and distribution of its products.

You may not carry out direct or indirect campaigns aimed at anyone under 35 years of age.

The company must also put a cap on the number of e-cigarettes each person can buy in each transaction.

The six indemnified States, in addition to the US capital, join another 33 (along with Puerto Rico) that reached an agreement with Juul in September.

This contemplated the payment of 438.5 million dollars (395 million euros) to regions such as Texas, which earned 42 million, Connecticut (16 million), Oregon (18 million), etc.

The sum represented 25% of sales in 2021. The company had between six and ten years to make payments, a scheme that will become more complex with the agreement announced this Tuesday, which has considerably higher figures than those made. public in the fall.

Juul has shown signs of financial trouble.

In November last year, the company laid off 400 employees to deal with the backlog of lawsuits it faces in the courts.

The strategy was intended to cut costs by 30-40%, fueling rumors that it was nearing bankruptcy or being forced to sell to a competitor.

But the company, which started operations with the participation of Altria, owner of Marlboro, received an injection of fresh resources that allow it to continue to live despite multiple lawsuits and harsh government regulation.

The money was put up by two investors, Nicholas Pritzker, head of the Hyatt hotel group, and Riaz Valani, who heads a San Francisco investment fund.

Subscribe here to the EL PAÍS America

and receive all the latest news from the region