E-Cigarettes Health Studies Ordered by FDA; Tobacco Makers See Big Bucks

E-cigarettes health studies will be done by the FDA, but the three biggest tobacco makers are making plans to enter the electronic cigarette market. Facebook president Sean Parker invested $10 million in the NJOY brand, which are smoked by Courtney Love and Bruno Mars. Electronic cigarettes are battery-powered devices that heat a liquid nicotine solution and creating vapor that users inhale.
E-cigarettes health risks are still to be determined, but Altria Group Inc. says it will launch an electronic cigarette called MarkTen in Indiana in August. Altria owns Philip Morris USA, the biggest cigarette maker in the country. It is last of major tobacco companies to invest in the market. MarkTen are manufactured in China. The liquid is made in the U.S. They are expected to sell for about $9.50.
Sean Parker told the Wall Street journal “There's a huge opportunity to transition the entire world away from dangerous, carcinogenic, combusting cigarettes. I’m optimistic that the clever application of technology might someday obsolete the combustion cigarette and all the harm it causes.”
The e-cigarette market has grown from the thousands of users in 2006 to millions worldwide. There are more than 250 brands of e-cigarettes. Analysts estimate that sales could double this year to $1 billion. Some analysts says e-cigarettes could outsell traditional cigarettes in the next decade.
Reynolds American Inc. already launched the Vuse brand e-cigarette. Lorillard recently bought Blu eCigs.
Marty Barrington, CEO of Altra said his company has “spent a good deal of time studying the category and the business opportunity. The category is in its early stages and time will tell how it will evolve.”
E-cigarette users say the devices addresses both the addictive and behavioral aspects of smoking. Smokers get a nicotine fix without having to breathe in the 4,000 chemicals found in regular cigarettes. They are shaped like a cigarette and produce a steam that that looks like smoke.
According to the Centers for Disease Control, 42 percent of adults smoked in 1965. In 2010, 19 percent of adults smoked.
In August 2012, Wells Fargo Securities tobacco analyst Bonnie Herzog predicted that e-cigarette sales could top traditional cigarettes. Herzog said “Although e-cigarette companies may not have the marketing budget of a big tobacco company, they are somewhat less encumbered (for now) in communicating to consumers.”
The e-cigarette business is expected to top $1 billion in annual sales in the next few years. The FDA doesn’t regulate e-cigarettes.

 by Tony Sokol

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