Despite Current Popularity, E-cig Brands Face Uncertain Future
E-cigarettes continue to baffle countries that are still undecided on the legal status of these products, despite the various health threats that they pose. While scientific and medical communities continue to list out the detrimental effects of e-cigarettes, tobacco companies are keen on marketing them as an alternative to conventional cigarettes to keep their businesses afloat.
The FDA was expected to impose regulations on ingredients used in e-cigarettes, but they are to be made public. The draft rules are reportedly with the Office of Management and Budget and the White House's Office of Information and Regulatory Affairs for review. These products were likely to attract higher taxes; however, at present, there are no federal regulations on them.
Increasing Popularity of E-Cigs
While the federal government and the FDA are still mulling on their decisions, the popularity of e-cigarettes continues to spike, especially among youngsters, despite the health-risks associated with these products.
According to a recent report from the Centers for Disease Control and Prevention (CDC), e-cig usage among middle-school students rose by .5 % in 2011-12, while usage among high-school students was up 1.3 % during the same time frame. Report also reveals that 'hookah' too seems to be gaining popularity among the student population. Flavored "little cigars" were also equally widespread.
Flashy product packages and an assortment of flavors have been tempting youngsters to just try out the product, even if they are non-smokers. The trend simply indicates that more youngsters are likely to get addicted to nicotine, contrary to the professed intent of progressive de-addiction from tobacco.
However, given the reactions from individual states, scientific communities, health organizations and educational institutions, e-cig brands face uncertain future, despite current popularity.
Market Perspective
Tobacco manufacturers are now faced with dwindling tobacco products, thanks to the health awareness campaigns in action. Additional taxations on the increasingly popular e-cigarettes may not be much of a financial burden, as long as the government does not try to make up for the losses from declining cigarette sales. Regulations, once in place, may also curb marketing and advertising, affecting the sales and eventually earnings, despite the present trend of e-cigs.
Stringent federal regulations and taxations reportedly will help established or reputed e-cig manufacturers do away with competition from mushrooming small-time sellers, especially on the Internet, and further consolidate their monopoly. The top three players in this business reportedly hold about 85 % of the current market share.
With the market value of the business expected to hit $1.7 billion this year, and $10 billion by 2017, analysts believe that e-cigs are likely to outperform conventional cigarettes in a decade's time.
Health Concerns
The key appeal of e-cigarette advocates is that they offer a safer alternative to conventional cigarettes (very often loaded with harmful carcinogens and tar) by allowing users to get their fix of nicotine, minus the by-products. Despite current popularity of these devices, there is no scientific proof or solid results to back these claims, or the role of e-cigarettes in nicotine replacement therapy (NRT).
The debate on the health front continues to escalate even as the FDA proposal is being reviewed by the White House. The process is expected to take at least three months.
If researches prove that these devices, in fact, are effective NRT material, then taxation may take a hit, but again will attract stringent regulations for therapeutic use.
E-Cigarette Regulations in States
State governments, in the meanwhile, have gone ahead and formulated their own e-cig regulations. While some states such as New Jersey, North Dakota and Utah have banned the use of e-cigarettes in indoor spaces, few others have categorized them as tobacco products - that attract the taxes, rules and regulations imposed on conventional cigarettes. California restricts online advertising for e-cigarettes.
About 25 states reportedly restrict the sale of e-cigarettes to minors, requiring buyer identity before the purchase is made.
The labeling or categorization of e-cigarettes (non-tobacco, NRT, vapor products, etc.), again vary from state to state, deciding on the regulations and taxes applicable on them.
Minnesota has, however, managed to categorize e-cig as another tobacco product, slapping a tax that is 95 % of wholesale price, making them really expensive.
Chicago may soon impose strict regulation on e-cigarettes, banning their sale to minors, prohibiting sales in public places, as well as disallowing outlets in the vicinity of schools.
Industry analysts and insiders, however, expect e-cigarettes to be categorized as tobacco products, subject to high taxes currently applicable to this category. In which, local regulations are likely to undergo changes to reflect the fed's decision.
E-Cigarette Regulations in Universities
In an independent move, universities across the country have also implemented specific rules to address the use of e-cigarettes.
The University of Texas, State Universities of Missouri and Idaho, University of Illinois, and all campuses in the University of California system have either already banned or prohibited the use of e-cigarettes, or will soon phase them out of the college premises.
Despite current popularity, e-cig brands face uncertain future, given the mixed responses from different industries with conflicting interests. A three-month wait will decide the fate of this new fad.
The FDA was expected to impose regulations on ingredients used in e-cigarettes, but they are to be made public. The draft rules are reportedly with the Office of Management and Budget and the White House's Office of Information and Regulatory Affairs for review. These products were likely to attract higher taxes; however, at present, there are no federal regulations on them.
Increasing Popularity of E-Cigs
While the federal government and the FDA are still mulling on their decisions, the popularity of e-cigarettes continues to spike, especially among youngsters, despite the health-risks associated with these products.
According to a recent report from the Centers for Disease Control and Prevention (CDC), e-cig usage among middle-school students rose by .5 % in 2011-12, while usage among high-school students was up 1.3 % during the same time frame. Report also reveals that 'hookah' too seems to be gaining popularity among the student population. Flavored "little cigars" were also equally widespread.
Flashy product packages and an assortment of flavors have been tempting youngsters to just try out the product, even if they are non-smokers. The trend simply indicates that more youngsters are likely to get addicted to nicotine, contrary to the professed intent of progressive de-addiction from tobacco.
However, given the reactions from individual states, scientific communities, health organizations and educational institutions, e-cig brands face uncertain future, despite current popularity.
Market Perspective
Tobacco manufacturers are now faced with dwindling tobacco products, thanks to the health awareness campaigns in action. Additional taxations on the increasingly popular e-cigarettes may not be much of a financial burden, as long as the government does not try to make up for the losses from declining cigarette sales. Regulations, once in place, may also curb marketing and advertising, affecting the sales and eventually earnings, despite the present trend of e-cigs.
Stringent federal regulations and taxations reportedly will help established or reputed e-cig manufacturers do away with competition from mushrooming small-time sellers, especially on the Internet, and further consolidate their monopoly. The top three players in this business reportedly hold about 85 % of the current market share.
With the market value of the business expected to hit $1.7 billion this year, and $10 billion by 2017, analysts believe that e-cigs are likely to outperform conventional cigarettes in a decade's time.
Health Concerns
The key appeal of e-cigarette advocates is that they offer a safer alternative to conventional cigarettes (very often loaded with harmful carcinogens and tar) by allowing users to get their fix of nicotine, minus the by-products. Despite current popularity of these devices, there is no scientific proof or solid results to back these claims, or the role of e-cigarettes in nicotine replacement therapy (NRT).
The debate on the health front continues to escalate even as the FDA proposal is being reviewed by the White House. The process is expected to take at least three months.
If researches prove that these devices, in fact, are effective NRT material, then taxation may take a hit, but again will attract stringent regulations for therapeutic use.
E-Cigarette Regulations in States
State governments, in the meanwhile, have gone ahead and formulated their own e-cig regulations. While some states such as New Jersey, North Dakota and Utah have banned the use of e-cigarettes in indoor spaces, few others have categorized them as tobacco products - that attract the taxes, rules and regulations imposed on conventional cigarettes. California restricts online advertising for e-cigarettes.
About 25 states reportedly restrict the sale of e-cigarettes to minors, requiring buyer identity before the purchase is made.
The labeling or categorization of e-cigarettes (non-tobacco, NRT, vapor products, etc.), again vary from state to state, deciding on the regulations and taxes applicable on them.
Minnesota has, however, managed to categorize e-cig as another tobacco product, slapping a tax that is 95 % of wholesale price, making them really expensive.
Chicago may soon impose strict regulation on e-cigarettes, banning their sale to minors, prohibiting sales in public places, as well as disallowing outlets in the vicinity of schools.
Industry analysts and insiders, however, expect e-cigarettes to be categorized as tobacco products, subject to high taxes currently applicable to this category. In which, local regulations are likely to undergo changes to reflect the fed's decision.
E-Cigarette Regulations in Universities
In an independent move, universities across the country have also implemented specific rules to address the use of e-cigarettes.
The University of Texas, State Universities of Missouri and Idaho, University of Illinois, and all campuses in the University of California system have either already banned or prohibited the use of e-cigarettes, or will soon phase them out of the college premises.
Despite current popularity, e-cig brands face uncertain future, given the mixed responses from different industries with conflicting interests. A three-month wait will decide the fate of this new fad.