Retailers Say E-Cigarettes Are Here to Stay

A recent survey shows that retailers think electronic cigarettes are not just trendy — they’re here for the long term.

The e-cig industry is starting to get support from the big tobacco companies: Lorillard Inc. acquired Blu e-cigs for $135 million, and there are rumors that Reynolds American Inc. will enter the arena soon.

Industry analysts believe Lorillard’s purchase of blu benefits the entire electronic cigarette industry by giving it legitimacy and street cred. Lorillard estimates that e-cigs currently generate $300 million in revenue and believes that number could hit $1 billion within a few years.

It doesn’t hurt that there are currently no federal or state excise taxes on e-cigs, meaning they are generally cheaper than traditional smokes.

There are dozens of e-cig brands on the market right now, but analysts predict there will be a bit of consolidation within the industry — sort of like survival of the fittest for vaping vendors.

The FDA is still fussing about how to handle electronic cigarettes. It threatened last year to regulate e-cigs like tobacco products, but so far it’s done a whole lot of nothing. Any regulations in place are at the state and local levels.

In the meantime, e-cigs remain attractive to retailers because they represent a profitable and growing market that is rapidly gaining consumer acceptance.