AG Healey wins $50 million+ settlement; e-cig company can no longer operate in Massachusetts

BOSTON – After being the first state to take action against national e-cigarette retailer Eonsmoke and its co-owners for selling nicotine vaping products to minors, Attorney General Maura Healey Thursday announced a settlement that secures nearly $51 million and orders them to no longer sell, distribute, market, or advertise any tobacco product to consumers in Massachusetts.

The AG’s settlement filed Thursday in Suffolk Superior Court against Eonsmoke, LLC, Gregory Grishayev and Michael Tolmach, resolves allegations that the defendants directly targeted young people for sales of its vaping products through marketing and advertising intended to appeal to youth. The AG’s Office also alleged that Eonsmoke failed to verify the age of online purchasers of its products—including electronic nicotine devices, e-liquids, and nicotine pods—and failed to ensure shipments of these products were received by a person 21 years or older, the state’s minimum legal sales age for smoking products.

“Eonsmoke coordinated a campaign that intentionally targeted young people and sold dangerous and addictive vaping products directly to minors through their website,” said AG Healey. “We were the first to take action against this company and its owners, and today we are holding them accountable and permanently stopping them from conducting these illegal practices in our state.”

Eonsmoke has agreed to a settlement amount of $50 million, and Grishayev and Tolmach will pay a total of $750,000. Under the terms of the consent judgment, pending court approval, Eonsmoke is permanently enjoined from selling, distributing, offering for sale, marketing or advertising any tobacco product through any means to consumers in Massachusetts.

Eonsmoke ceased all operations and dissolved in 2020. If Grishayev and Tolmach want to engage in selling tobacco products in Massachusetts in the future, they are required to get authorization from the Food and Drug Administration and give notice to the AG’s Office to ensure compliance with federal and state law.

According to the AG’s complaint, filed in May 2019 and amended in November 2020 to include Defendants Grishayev and Tolmach, defendants willfully and repeatedly violated the state’s consumer protection law by using a marketing campaign that directly targeted underage consumers. At the time, Eonsmoke’s products contained some of the highest nicotine concentrations on the commercial market and came in a variety of sweet and fruit flavors. The AG’s Office alleges that defendants directly marketed Eonsmoke vaping products to young people through social media sites such as Instagram, Snapchat, and YouTube, and included youth popular culture references, social media influencers, celebrity endorsers, cartoons, and internet memes that intentionally minimized or omitted the fact that the vaping products contained nicotine.

The AG’s investigation of Eonsmoke also revealed that between 2015 and 2018, the company did not conduct any age verification of consumers purchasing vaping products from its website. Until September 2018, when the AG’s Office sent a cease-and-desist letter ordering Eonsmoke to stop selling its products in Massachusetts, underage youth across the state were able to freely purchase unlimited quantities of vaping products – some of whom were only 15 or 16 years old.

The lawsuit against Eonsmoke was the first AG Healey filed since announcing her office’s investigation into the e-cigarette industry in July 2018. Since then, AG Healey has sued eight online e-cigarette retailers for illegally selling and delivering flavored tobacco products to consumers in Massachusetts, sued online disposable e-cigarette company Puff Bar for the same allegations, and sued JUUL for creating a youth vaping epidemic by intentionally marketing and selling its e-cigarettes to young people. Cease-and-desist letters have also been sent to a number of other e-cigarette companies to stop them from selling their products to Massachusetts residents.

Massachusetts law and regulations set the minimum legal age to purchase electronic smoking devices at 21 and impose two requirements on online retailers of these products to verify a purchaser’s age: use a commercially-available database to verify the age and identity of purchasers; and use a method of mailing, shipping, or delivery that requires the signature of a person who is of the minimum legal age before the package is released.

In November 2019, Massachusetts became the first state in the country to ban the sale of flavored tobacco products, including e-cigarettes and e-liquids. The law went fully into effect on June 1, 2020, also restricting all menthol flavored tobacco products.

This matter was handled by Senior Counsel Samantha Shusterman of the AG’s Consumer Protection Division, with assistance from Attorney Aaron Davis, Paralegals Matthew Johnson, Breanna Beaudreault, and Andrew Turnbull of the Consumer Protection Division, and Senior Investigator Ciara Tran and Senior Financial Investigator Colleen Frost of the Civil Investigations Division.