E-cigarette maker Juul agreed to pay $40 million to North Carolina and abide strict rules on marketing its product to youth, according to an deal announced Monday by state officials.

The agreement marks Juul's first settlement with a US state after several sued the company over its business practices.

The deal requires "drastic changes" from Juul Labs in the way it conducts business in the southern state, according to a press release from the North Carolina Attorney General's office.

"This win will go a long way in keeping Juul products out of kids' hands, keeping its chemical vapor out of their lungs, and keeping its nicotine from poisoning and addicting their brains," state Attorney General Jeff Stein said.

Juul will pay North Carolina $40 mn in the first settlement with a state in litigtion over youth marketing
Juul will pay North Carolina $40 mn in the first settlement with a state in litigtion over youth marketing AFP / Robyn Beck

Stein launched an investigation in 2018 and filed litigation against the company a year later, alleging Juul marketed its e-cigarettes in a way to attract young people while misrepresenting the danger of nicotine in its products.

Under the terms of the settlement, Juul will forego most social media advertising, influencer advertising and outdoor advertising near schools, and will not sponsor sporting events or concerts.

In addition, the company cannot sell products to anyone unless their age is first verified by an independent system.

Juul said the agreement "is consistent with our ongoing effort to reset our company and its relationship with our stakeholders, as we continue to combat underage usage and advance the opportunity for harm reduction for adult smokers," according to a statement on the company's website.