They aren't such a strange sight anymore, those slim cylinders about the same size and shape as a cigarette — only not made of tobacco and paper. E-cigarettes have gained in popularity since they were introduced to the U.S. market by companies that are now largely owned by Big Tobacco — so much so that "vape" was named the Oxford English Dictionary's 2014 word of the year.

Recent updates

Following an outbreak of vaping-linked lung diseases, which triggered an investigation by the Centers for Disease Control and Prevention, the Trump administration announced Sept. 11, 2019 it would ban the sales of flavored e-cigarettes nationwide.

As of Sept. 6, 2019, more than 450 lung illnesses potentially linked to the use of e-cigarettes were reported in 33 states and one U.S. territory. State health departments have launched investigations into local vaping-linked diseases and Michigan became the first state to ban flavored e-cigarettes.

There have been six vaping-related deaths across the country, with the first case in Illinois in August 2019. Within less than a month, deaths were reported in Oregon, Indiana, Minnesota, California and Kansas.

A federal judge ordered on July 12, 2019 that e-cigarette companies must submit applications to the Food and Drug Administration by May 2020 if they want to keep their products on the market. The ruling stemmed from a lawsuit filed by a number of health groups, including the American Academy of Pediatrics.

E-cigarettes first went on the market in 2007 without undergoing a review of their health impact. The Obama administration had originally set a 2018 deadline for e-cigarette companies' to submit applications to the FDA, which would be reviewed for health and safety so that the companies could continue to market their products. The Trump administration had pushed that deadline until 2022, but the court ruling moved it up.

E-cigarettes, also known as vapes, have gained in popularity since they were introduced to the U.S. market. Billed as a healthier alternative to cigarettes, most of the companies that created them are now owned by Big Tobacco.

Market

The most well-known e-cigarette brand is Juul, which held three-quarters of the U.S. e-cigarette market at the end of 2018. In December of that year, the cigarette company Altria — the parent company of Philip Morris USA — bought a 35 percent stake in Juul.

The e-cigarette maker's sales have skyrocketed in recent years, going from 2.2 million devices sold in 2016 to 16.2 million in 2017. This growth was in part due to increased sales of a small e-cigarette that resembles a USB flash drive. Juul forecasts its 2019 revenue to be $3.4 billion.

The brand Vuse came in second in the e-cigarette industry with 10 percent of the market share at the end of 2018. Vuse is owned by R.J. Reynolds Vapor Company, a subsidiary of Reynolds American Inc, which was acquired by British American Tobacco in 2017.

There has been much debate in the public health community about whether the new devices provide smokers of traditional cigarettes with a safer alternative or serve as a gateway to other tobacco products for young users — or both. Youth vaping has clearly been on the rise, with the number of high school seniors who say they have vaped nicotine nearly doubling between 2017 and 2018.

The U.S. market for e-cigarettes is projected to reach $16.5 billion by 2024, while the global market is expected to hit $53 billion.

Regulatory picture

In November 2018, the FDA announced that it would limit the available e-cigarette flavors to tobacco, menthol and mint. Companies including Juul had previously sold flavors like mango and cotton candy, which suggested that children were a target for the growing industry.

Regulation of e-cigarettes has lagged behind the industry's growth. The 2009 passage of the Family Smoking Prevention and Tobacco Control Act gave the FDA authority to regulate just about any tobacco products, including e-cigarettes.

But draft regulations covering vaping were first published in 2014, and the FDA did not outlaw selling e-cigarettes to minors until 2016. Those sweeping measures banned sales of e-cigarettes to anyone under 18 and require manufacturers — including shops that mix up their own vaping liquids — to apply for permission to sell their products and disclose their production methods and a full list of their ingredients to the agency. Groups like the Campaign for Tobacco-Free Kids and the American Cancer Society hailed the measures, and the FDA called them "a milestone in consumer protection." However, e-cigarette use has continued to increase in years since.

The 2016 rules put e-cigarettes (as well as cigars and pipe tobacco) in the same regulatory realm as standard cigarettes. But the marketing of these products remains a key issue. Federal regulation of tobacco marketing has developed over several decades, especially since the Surgeon General's report on smoking in 1964. The most significant regulation of tobacco was spurred by the 1998 Tobacco Master Settlement Agreement, which led to the current restrictions on advertising, lobbying and sponsorship by cigarette companies.

Some localities have also taken e-cigarette regulations into their own hands. San Francisco, where Juul has its headquarters, voted in June 2019 to ban the sale of e-cigarettes that have not been approved by the FDA — which, for now, is all of them.

Lobbying and contributions

A number of companies and advocacy groups opposed legislation to regulate and tax e-cigarettes — including big tobacco companies like Altria Group, Ballantyne Brands, Hay Island Holding, Reynolds American and Swedish Match AB, which all have opposed legislation to regulate and tax e-cigarettes. Public health groups like the American Cancer Society, American Heart Association, American Lung Association and the Campaign for Tobacco Free Kids have been on the other side, favoring greater regulation and taxation.

Spending by the tobacco industry as a whole has been roughly constant over the last decades. Lobbying spending was $23 million in 2018. Political contributions from the industry totaled $5.6 million during the midterm cycle and favored Republicans over Democrats. The top recipient, however, was Sen. Tim Kaine% (D-Va.), who received nearly $64,000 in contributions.

Altria Group spent more than $10 million on lobbying in 2018, while Juul spent $1.6 million. Altria's PAC also spent $2.3 million on the 2018 midterms, three-quarters of which went to Republicans.

Juul has publicly stated its support for age restrictions on its products, with CEO Kevin Burns saying, "We don't want anyone who doesn't smoke, or already use nicotine, to use JUUL products. We certainly don't want youth using the product." The company has increased age-verification mechanisms and reduced sales of sweet flavors that critics said were targeted at kids.

The company also lobbied in favor of a bill that would have raised the minimum age for purchasing tobacco products to 21.

Future

Investors appear to be optimistic about the future of e-cigarettes. Altria's major investment in Juul came after the FDA's flavor regulations were announced, suggesting that tobacco companies do not see the agency's regulatory power as a major threat. Bloomberg Industries has projected that e-cigarette sales might overtake those of the old tobacco-and-paper variety by 2024.

Juul has largely tried to stay in the FDA's good graces, supporting its efforts to crack down on youth vaping. However, recent citywide efforts to reduce or ban e-cigarette use might compel tobacco companies to invest more of their resources at the local level if they want to keep their products legal.

– Updated July 2019

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