Categories Cannabis, U.S. Markets News

A bleak future awaits e-cig brands as the hype proves to be flawed

The safety of e-cigarette has been a point of contention ever since it was made popular by people who are concerned about the risks of smoking but not willing to quit. The efforts by tobacco firms to overcome the anti-smoking campaign through their vaping devices suffered a blow this week after the FDA announced a fresh round of curbs on e-cigarette sales.

So, does that mean all the hype surrounding tobacco-less cigarettes is far-fetched? There is enough reason to believe so. The initial acceptance started to wane after researches revealed that claims about the safety of e-cigs are misguiding, with manufacturers often luring unsuspecting teens with flavored vapes that come in multiple designs.

Statistics show that e-cigarette sales more than doubled over the past couple of years, hitting the market in the popular avatars of cig-a-like, vaporizer and vape mod. The industry is estimated to grow as much in the next few years if the current trend is sustained. But, going forward it won’t be easy for companies and retailers to sell the smoking devices, especially the dubiously flavored ones, to the young population.

The initial acceptance started to wane after researches revealed that claims about the safety of e-cigs are misguiding

The FDA held that the sale of flavored e-cigs will be strictly limited to adults, considering the health hazards they pose to the youth. While stores will be asked not to sell e-cigs to minors, online retailers will have to confirm the customers’ age before serving them. The new restrictions are expected to come into effect as early as next week. On multiple occasions in the past, the agency had raised concerns that e-cigarette is creating a new breed of nicotine addicts rather than helping smokers switch to the relatively safer option.

A possible outcome of the negative sentiment surrounding e-cigs could be a rebound in the sale of tobacco-based cigarettes. In that case, big companies will remain unscathed by the curbs, because vaping products account for only a small portion of their revenue.

FDA puts the heat on e-cig makers to curb teen vaping

In its most recent earnings report, Altria (MO) revealed measures to check the use of its vape brands among youngsters, in response to the steps initiated by the FDA in that direction. In the third quarter, the company recorded a 6.5% rise in revenues from smokeless products, mainly due to higher prices.

Philip Morris (PMI) is already feeling the heat of the anti-vaping campaign, with shipments of its heated tobacco units falling about 11% in the third quarter. However, the company remains bullish about the future of the segment as it continues to expand sales to new markets.

Altria’s shares dropped about 7% since January this year. The stock traded higher in the early hours of Friday. Philip Morris shares are on the recovery path after hitting a multi-year low in August. The stock, which lost about 13% since the beginning of the year, closed the last trading session higher.


Browse through our earnings calendar and get all scheduled earnings announcements, analyst/investor conference and much more!

Most Popular

IPO Alert: Here’s what to look for when CaliberCos goes public

The massive slowdown in the IPO market continued in the second half as the challenges posed by high inflation and interest rate hikes weighed on investor confidence. Meanwhile, there is

CarMax (KMX) Stock: Does the current dip offer a buying opportunity?

The automotive sector is one of the worst affected by the combination of high inflation and rising interest rates. Consumers have become more cautious and are prioritizing their purchases with

Ultimax Digital gears up for $10mln IPO. Here’s all you need to know

The IPO market has witnessed muted activity this year, and things don’t seem to have improved in the second half. The upcoming public listing of video game technology firm Ultimax

Add Comment
Viewing Highlight