E-cigarettes attract big money and more scrutiny

While major tobacco companies and investors such as Sean Parker are piling in, critics warn that high-tech butts may be no safer.

By Jonathan Berr Jun 11, 2013 11:59AM
NJOY electronic cigarettes (© Steve Helber/AP Photo)Are e-cigarettes the future of Big Tobacco?

The battery-powered devices create vapor by heating nicotine-laden liquid and are, according to their fans, less harmful than conventional cigarettes because they spare users the toxins found in tobacco smoke. Sales of e-cigarettes are expected to hit $1 billion this year, according to The Wall Street Journal. That equals just 1% of the U.S. cigarette market, but it's twice what it was in 2012.

Altria Group (MO), the largest tobacco company and the maker of Marlboro, on Tuesday announced details of its e-cigarette plans under the brand name MarkTen. Rival Reynolds American (RAI), which makes Camels, plans to sell e-cigarettes in Colorado before starting national sales. And Lorillard (LO) acquired blu eCigs for $135 million last year.

In addition, big-name investors such as Sean Parker, an early backer of Facebook (FB), are pouring money into the sector. He's part of a group that's investing $75 million in e-cigarette maker Njoy. Parker, who has supported cancer research, told The Wall Street Journal, "There's a huge opportunity to transition the entire world away from dangerous, carcinogenic, combusting cigarettes."

Experts are skeptical. The American Lung Association argues that the high-tech alternatives may do more harm than good and recommends people avoid them until more is known about their safety.

"We want to see (the) FDA move forward with regulating them as tobacco products," Erika Sward, the association's assistant vice president for national advocacy, said in an interview with MSN Money, adding that the Food and Drug Administration hasn't approved any e-cigarettes as a means to help people quit smoking.


Sward pointed out that "not a lot" is known about what's in e-cigarettes. "We know the vast majority of them contain nicotine," she said. "Any time you see Big Tobacco jumping into something with both feet,  it should be cause for concern."

Other medical professionals have also raised some flags. "When the FDA analyzed samples of two popular brands, they found variable amounts of nicotine and traces of toxic chemicals, including known cancer-causing substances," according to Mayo Clinic physician Lowell Dale.

Unlike regular smokes, e-cigarettes aren't federally regulated. And they come in flavors that make them more palatable to young people, such as chocolate and pina colada, which raises even more alarm bells.

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

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Jun 11, 2013 1:40PM

Experts are skeptical. This is crap. I smoked for 10 years and I could feel my body shutting down, hard coughs, chest hurting, spit up black stuff. I have been using the V2 electronic cigarettes for about 5 months. My chest feels a 100% better, no hard coughs and no black stuff. It cleaner and better for you. I would recommend it to any smoker. Also I have known people that quit smoking by using E-cigs.

Jun 11, 2013 1:39PM
I was terrified about quitting smoking for the second time, it had been 10 years since my last ciggie.  Got in a new relationship and started again!.  By the time, that 6 years has passed I was getting up in the morning coughing and coughing most of the day.   For Valentine's Day, my husband bought me an e-cigarette.  Two (2) days later I put down regular cigarettes!  I have still not had one yet!  I could probably put down the e-cigarette down without much problem since I don't use the e-cigarette but a few times a day!  I hardly cough anymore too!  Look now a days just about everything will make you sick.  I know that cigarettes and the "new" chemicals that they are putting in them to make the cigarette "go out" are definitely not good for me.  At least with the e-cigarette I am able to step down and quit.  Oh and by the way, I am currently at 6mg of nicotine and will probably be at 0mg nicotine in another month or so.  So, I think that I will take my chances with the e-cigarettes.
Jun 11, 2013 2:13PM
The government just wants to control everything.  If their not getting their $ they don't want us to have it.....Like their beloved tobacco taxes. The tax is higher than the product, just like alcohol in some states.  I am so tired of BIG BROTHER.
Jun 11, 2013 2:40PM
For those of you knocking e-cigs, my wife and I both quit regular smoking years ago and went to e-cigs. Our chronic smoking hacks were gone in a week and I had been smoking 2 1/2 packs a day for 40 years. We save gobs of money and our health has drastically improved. Don't knock something just because you don't understand it. Sure it gives you nicotine, but so does Nicorette gum and Patches. According to the FDA there is no second hand smoke hazard to others, so for the uninformed get over it please.  
Jun 11, 2013 1:44PM
I smoke one of these.  I can't help but wonder HOW these could be any worse than what's in a regular cigarette.
Jun 11, 2013 2:17PM

Hmmm...suck on a KNOWN cancer stick, full of carcinogens, tar, and God only knows what else, OR go with an e-cig.  Yes, they do haev nicotine in them (though you can go with the non-nicotine cartridges if you like), but if you're going to do one or the other, I'd have to say the e-cig is better than smoking a KNOWN cancer-causing cigarette.


Ideally, you wouldn't use either one, I know.  I know.  But thanks to e-cigs, I haven't had a cigarette since September 4, 2011, and I don't plan on EVER going back.  I hope to quit the e-cigs one day, as well, but in the meantime, at least I don't wake up coughing myself to death every morning, and I feel better than I ever have!

Jun 11, 2013 1:24PM

Standard cigarette packs don't show a list of ingredients on the label.  Why is that?  Yeah, I know you don't eat cigarettes, but you don't eat shampoo, and there's a list of ingredients on every shampoo bottle.


Do e-cigarette packs have a list of ingredients?  If not, why?

Jun 11, 2013 2:19PM
I went from 2+ packs a day to using V2's and the difference is amazing. I have NO cravings at all, which is probably due to the E-Cigs not only having nicotine in them but also duplicating the smoking effect. I breathe better and that terrible smell ... which I only noticed when I stopped smoking ... is gone. E-Cigs may not be perfect, but they are far better than regular cigs are. Oh ... E-Cigs are also cheaper and I now save approx $320 a month.

Jun 11, 2013 2:36PM
You can find any expert that agrees with your agenda.  Electronic cigarettes are not nearly as harmful as a tobacco cigarette.  They contain propylene glycol, which is in asthma inhalers; vegetable glycerin, flavoring, and nicotine, although there are some 0 nicotine juices out there.  

This is just goverment wanting a piece of the pie and butting in like they do with everything else.  And cowtowing to big tobacco.

E-cigarettes work.  They get people quitting smoking.  Why try to stop that?  
Jun 11, 2013 1:32PM
I've never smoked.   I'm still interested in knowing if these things really satisfy a craving to smoke.  It they do there should be real growth potential.
Jun 11, 2013 2:31PM
40+ years of smoking at 2 packs per day.Summer 2009 I went to electronic cigarettes by weaning off over a months time.Now almost 4 years later I still am free of cigarettes and have even went to NO nicotiene liquids for 4 months now.I will be a supporter of electronic cigs for life!
Jun 11, 2013 2:30PM
Even if they found traces of some carcinogens, that's far less than even the lightest cigarette.
Jun 11, 2013 2:36PM
  I have been a smoker for about 20 years, albeit a very light smoker (about a half a pack a day). Three weeks ago I switched to an vegetable oil based e-cigarette product and have not smoked a cigarette since. I did a good amount of research before I made the switch and I had even tried some of the pre-packaged types like those mentioned in this article. What I learned is that the methods used by these so called e-cigs is questionable at best, whereas the vegetable oil based products use only a refined nicotine laden oil with no paraffins or waxes that could contain possible carcinogens. Not to mention, the oil based product lasts well over a week on a single charge!

  I believe that e-cigarettes are the future of smoking as all of things I hated most about smoking (odor, yellow teeth, ashtrays, lighters etc.) are a thing of the past. However, I do take exception to terms that e-cigarettes are tobacco products. They are not. Nicotine is NOT tobacco and can be derived from several sources other than tobacco, therefore the laws and taxes associated with tobacco DO NOT apply. 

Jun 11, 2013 1:45PM

E cigarettes for the most part is just nicotine and cooking oil. That's right good old fashion Crisco liquid not lard and YES it satisfies the craving for a cigarette, but takes getting used to just like any thing else. It is not FDA approved so Quality control is an issue. Having said that, I have been puffing them for a while now and they work for me. Yes, they save me tons of money.


What vaporizes the nicotione and oil is a battery and an ATOMIZER. Basically a little small electronic mechanism with VERY LITTLE charge that vaporizes the liquid you put in the unit. IT really VAPES or as smokes say...smokes like a haystack while delivering nicotine. Looks and feels just like smoking without the SMOKE, Smell, and DAngers of Cigarette smoke.........IT is almost too good to be true.......of course if you leave it up to Big Tobacco...who makes a lot of money selling cigarettes...you will never hear the FULL truth!

Jun 11, 2013 2:41PM
Of course they want to classify them as nicotine products.  Then they can tax the hell out of them.  And none of the brands I have seen advertise as a way to quit smoking.  They have all advertised as an alternative to smoking.   You are not breaking your nicotine habit with these, just getting it without all of the extra poison.  My wife and I have been off of regular cigs and on the e-cigs for 5 months and they work great.  Plus we have moved to a lower nicotine amount twice already.
Jun 11, 2013 2:47PM
2 to 2.5 pack smoker a day for 30 years. 3 days after I got e cig I stopped smoking. Propylene Glycol and Vegetable Glycol ( both in food and medicine and mouth products) and food flavoring. In 60 days I can breath, less sweating, better attitude and on and on.    Cancer Society is losing money because of ecigs. Dont let them fool you. They are as bad as tobacco company.
Jun 11, 2013 2:46PM
I have been a smoker for just over 25 years. Six months ago i switched to the E-Cig and it is the best investment I have made in a long time. I can breath again, the coughing every morning and through out the day is gone. My kids will tell me that they are happier because i don't smell like a nasty cigarette. That was enough to convince me not only doing it for myself but for my kids so they will have a dad around a lot longer then they would if I was still using cigs. They work wonderfully no craving for tobacco, no anxiety, no anything but a better taste in my mouth and fresher smelling clothes. Would highly recommend it to anyone that wants to breath again!
Jun 11, 2013 2:03PM
Someof the liquids for the ciggarettes have no nicotine  I never have smoked cigerattes but i smoke the dessert flavored ones and it has help me curb my cravings of sweets.  I have lost 11 lbs.  Also I don't drink alcohol but I play in a pool league and I like to smoke it there.  Most people at the bar smoke those and ny eyes don't sting anymore.
Jun 11, 2013 1:38PM
There is nothing like a "reformed smoker." Having said that, I will confess I was a three pack a day smoker, until I saw the light. After a physical, my doctor said I had to quit, and I had half a pack left. I used them sparingly, until the next morning's coffe, and the last one at 10:00 a.m. coffee break. I would  not quit, ran to the door, enroute to the market for another pack. I quickly changed my mind, when a fellow worker, who lit up, fell to the floor coughing and began turning blue. He finally re-gained his breathing, and I never bought another cigarette. They were only $.50 a pack then, so it wasnt a money issue.
Jun 11, 2013 2:18PM
Those samples were from China.  China has been notorious for  a lack of quality control.
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