North Carolina sues vape giant Juul, which is 35% owned by Altria (MO)

NYSE: MO | Altria Group, Inc. News, Ratings, and Charts

MO – North Carolina is accusing Juul of targeting young consumers and misrepresenting the potency of nicotine in its products.

  • North Carolina sued e-cigarette maker Juul Wednesday, accusing the vaping company of targeting young consumers and misrepresenting the potency and danger of nicotine in its products.
  • This is the latest suit against the company that claims its products promoted nicotine use in underage buyers.

North Carolina sued e-cigarette maker Juul Wednesday, accusing the vaping company of targeting young consumers and misrepresenting the potency and danger of nicotine in its products.

It is the latest suit against the company that claims its is intentionally promoting nicotine use among underage buyers.

“JUUL targeted young people as customers. As a result, vaping has become an epidemic among minors,” North Carolina Attorney General Josh Stein said in a statement. “JUUL’s business practices are not only reckless, they’re illegal. And I intend to put a stop to them. We cannot allow another generation of young people to become addicted to nicotine.”

Juul allegedly “downplayed” the danger of nicotine in its flavored pods, according to the complaint, which says a “typical JUUL pod is so strong and addictive that it is nearly three times the permissible concentration allowed for sale in a number of countries for people of all ages.”

Stein says the company deliberately designed its products to attract young consumers and targeted them on social media by paying influencers to promote their product. The lawsuit also claims Juul used negligent age-verification methods for online purchases, allowing young consumers to buy their products.

“Because of JUUL’s lackadaisical — and, at times, willfully blind — approach to age verification, enormous numbers of underage users have easily obtained JUUL products, often simply by ordering them online,” the lawsuit said.

Juul said in a statement that it has not seen the complaint yet, but the company shares Stein’s concerns about youth vaping, “which is why we have been cooperating with his office and why we have taken the most aggressive actionsof anyone in the industry to combat youth usage. ”

The complaint claims nearly 17% of North Carolina high school students said they used an e-cigarette in 2017, adding that vaping use among high school and middle school kids skyrocketed to 78% and 48%, respectively, across the nation.

Stein is asking the court to force the company to stop selling e-cigarettes to minors in North Carolina, limit the number of pod flavors sold in the state, cease advertising practices that appeal to young consumers and delete all customer data for any consumers under age 18.

Juul is partially owned by tobacco giant Altria and dominates the e-cigarette market. It said it’s already stopped selling non-tobacco and non-menthol based flavored pods in retail stores, “enhanced” its online age verification process and shut down its Facebook and Instagram accounts “while working constantly to remove inappropriate social media content generated by others on those platforms.”

Juul has also pledged to invest $30 million over the next three years on research, youth and parent education and engagement and said it it “strongly” advocates raising the legal tobacco-use age to 21.

Altria, which has a 35% stake in Juul, did not immediately respond to CNBC’s request for comment.

Stein’s accusations are just the latest claims that the e-cigarette maker marketed its products to young consumers, leading to a rapid increase in vaping in youths.

Last year Massachusetts Attorney General Maura Healey announced she was investigating the company for failing to stop minors from buying its products. Healey, who said the Massachusetts probe was the first of its kind, is investigating how many minors use Juul’s products and how the company monitors its age verification system.

 


Altria Group Inc. shares were unchanged in after-hours trading Wednesday. Year-to-date, MO has gained 7.05%, versus a 14.56% rise in the benchmark S&P 500 index during the same period.

MO currently has a StockNews.com POWR Rating of C (Neutral), and is ranked #3 of 10 stocks in the Tobacco category.


This article is brought to you courtesy of CNBC.

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