47
TOBACCO BUSINESS
MARCH/APRIL 2014
he
New York Post
recently
reported on the growing trend
of many venture capitalists
and all the major tobacco
companies firmly investing in
electronic cigarettes. “What
was years ago a cult fad is nowmore than
doubling in sales annually [as seen over]
the last three years,” said SamHamadeh,
CEO of research company PrivCo.
Bonnie Herzog, a tobacco analyst with
Wells Fargo Securities, maintains her
bold stance from over a year ago: “We
believe consumption of e-cigs will eclipse
consumption of traditional cigs over the
next decade as e-cig technology improves
and conversion continues to accelerate,”
she reiterates.
With all the hype and hope, debate over
the category’s ultimate potential is heating
up. To follow are the top issues that those
involved in the tobacco industry feel will
determine the category’s future.
Reportedly, the FDA will issue
proposed regulations for electronic
cigarettes this year,possibly as soon as this
spring.There are several issues tied to how
this will play out, but the overarching one
is whether the government agency will
regulate the category with a scalpel or
with a sledgehammer.
Bryan Haynes, a partner in tobacco
practice at Troutman Sanders law firm,
is optimistic that it might go more the
way of the scalpel. He says that he was
encouraged by the FDA’s recent stance
that the Tobacco Control Act “is not
an all-or-nothing proposition.” Like
other industry experts, he has observed
“the huge learning curve” that the FDA
undertook with traditional tobacco
products, and recognizes that “when
you add e-cigs into the mix, I’m not sure
[that] they have the capability right now”
to effectively evaluate them.
His biggest question then is: “How
much of this product is the FDA going
to regulate?” The answer hinges on
how the product is positioned—that is,
whether its legal definition is expanded
or retracted (see “Tobacco Product vs.
Medical Device vs. Something Else?”
debate on page 46).
As of late January, Cynthia Cabrera,
executive director of Smoke-Free
Alternatives Trade Association (SFATA)
Regulation…
and Other E-Cig Debates
Will the
FDA
make
fine-cut
,
or
blasting
regulations on elec-
tronic cigarettes? Will
“tanks”
take over the
market
? The cat-
egory is
heating up
with these
and other
debates
as experts
weigh in from
varying angles
.
Troutman Sanders’
Bryan Haynes
