E-cigarette maker Juul agreed to pay US$40mln and curb advertising aimed at young people in a settlement of a legal case by North Carolina.
The agreement will mean Juul can no longer target adverts at people in the US state under the age of 35.
North Carolina launched its legal action in 2019 alleging that Juul's e-cigarette flavours got youngsters addicted to nicotine.
Between 2018 and 2019, the use of e-cigarettes rose by 78% among North Carolina high school students, according to the State’s own data.
Josh Stein, the state’s attorney general, said: "North Carolina is now the first state in the nation to hold Juul accountable for its instrumental role in creating a youth vaping epidemic.
"They did it to teenagers across North Carolina and this country simply to make money."
Juul denied it had done anything wrong and said the settlement was “consistent with our ongoing effort to reset our company.
"We continue to combat underage usage and advance the opportunity for harm reduction for adult smokers."
Juul also said it had stopped distributing flavoured products and shut down Instagram and Facebook pages promoting vape products.
Philip Morris owner Altria Inc (NYSE:MO) acquired a 35% stake in privately-owned Juul in 2018 for $US12.8bn, an investment it has since written down by about 90% following the growing pressure of teenage vaping and a ban on popular flavours.