Young smokers are boosting e-cigarette sales

The sudden boom in electronic smokes has public health advocates worried because the products are hardly regulated.

By Jonathan Berr Sep 6, 2013 1:54PM

Consumers smoke electronic cigarettes at a mall on June 30, 2013 in Manila, Philippines (© Dondi Tawatao/Getty Images)Consumption of e-cigarettes may overtake conventional smokes within the next decade as their popularity continues to surge, according to the Tobacco Vapor Electronic Cigarette Association (TVECA), a trade group. Unfortunately, however, some of that new popularity comes from young people who are increasingly turning to electronic smokes.

The industry itself sees better times ahead even if the Food and Drug Association implements a proposal banning TV ads and restricting online sales next month, as many expect. Sales of the battery-powered devices, said by fans to be less harmful than regular smokes, are expected to hit $1.7 billion by year-end.

"If online sales of e-cigs were banned, we believe this clearly would be a huge positive for e-cig manufacturers that are already well entrenched with retailers, including Lorillard (LO) (blu) with over 100,000 retail points of distribution," according to the TVECA. 

Altria (MO) and Reynolds American (RAI), two of the biggest tobacco companies, have also entered the e-cigarette market, and many closely held companies have followed suit. A TVECA association spokesperson could not immediately be reached for comment.

Most states don't regulate e-cigarettes because they're relatively new products. The sales explosion has caught regulators off guard and alarmed public health advocates. Data released by the Centers for Disease Control and Prevention on Thursday show that use of these products yesterday is skyrocketing with middle school and high school students. Among users of e-cigarattes, 20.3% of middle school students have never smoked a traditional smoke compared with 7.2% among high school students.

According to the American Lung Association, 250 different e-cigarette brands are available, more than half of which are sold in fruit and candy flavors such as cotton candy and orange cream soda that may appeal to children.

"Using an e-cigarette can begin kids on a lifelong addiction to nicotine and tobacco products," Paul G. Billings,  the association's senior vice president for advocacy and education, said in a press release. "The CDC study also shows that while e-cigarette use is most common among youth who use traditional cigarettes, a significant percent of youth are only using e-cigarettes, especially among younger age groups."

Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter @jdberr.

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