The explosive popularity of electronic cigarettes (E-Cigs) has been nothing short of astounding. The E-Cig market first took off in 2003, and has been growing in America since 2007. There are many brands to choose from, giving E-Cig users the range of choices they are familiar with from the tobacco cigarette market. For entrepreneurs and investors, the E-Cig market represents a way to make money in an otherwise anemic economy.
Now let’s be clear: E-Cigs cannot be considered a clinically-proven effective device for quitting smoking. On the other hand, a few studies have not found any reported side effects from E-Cigs. The FDA has yet to rule that E-Cigs are safer than regular cigarettes. But let’s focus on the economics of this new market.
We all know that the tobacco market is huge. Hundreds of billions of cigarettes are sold each year, and tobacco companies reap billions in profits. E-Cigs can be considered either tobacco substitute or complimentary products, since some users switch exclusively to E-Cigs while others enjoy both products. But by and large, E-Cigs are looked at as substitutes for tobacco products. E-Cigs use no tobacco and are sold by small American businesses rather than giant conglomerates. The FDA initially tried to classify E-Cigs as a medical product, but this position was struck down in a series of court decisions. E-Cigs are considered tobacco products and are regulated in that manner. Imports of E-Cigs cannot be blocked.
Paradoxically, studies at UC Berkeley indicate E-Cigs can be useful in giving up tobacco, and that they can potentially reduce the health risks associated with smoking tobacco. Further studies are underway. In the meantime, the two major producers of e-liquid, the consumable portion of an E-Cig, are China and the US. Recently, the UK has entered the e-liquid market with a high-quality product. China is pretty relaxed about E-Cigs – all they require are nontoxic testing permits to control the nicotine content of e-liquid. In the US, e-liquid manufacturers must adhere to the Federal Food, Drug and Cosmetic Act, but do not need to perform any other certification processes.
With the enlightened decisions of the American court system, the future for E-Cigs in the United States seems bright. If further evidence develops that E-Cigs actually are safer than conventional cigarettes, investors will be in a position to reap huge profits from the exponential growth of the E-Cig market.