E-Cigarettes: A $1.5 Billion Industry Braces for FDA Regulation

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The first time J. Andries Verleur tried an e-cigarette in 2008, he burned his lip and accidentally inhaled the nicotine fluid. “It was one of the worst products I ever tried,” he recalls, “but the idea was amazing.”

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Verleur, a heavy smoker, was living in Prague and happened to spot the strange new product in a Vietnamese grocery store. The crude early version obviously didn’t work very well, but Verleur, a serial entrepreneur, immediately realized that if it did work, it could upend the tobacco industry. That was worth looking into: Cigarettes are a global business that generates more than half a trillion dollars every year, according to data from Euromonitor International.
In its simplest form, an e-cigarette is a cartridge filled with a nicotine solution and a battery powering a coil that heats the solution into vapor, which one sucks in and exhales like smoke. Typically, it looks like a regular cigarette, except the tip, embedded with an LED, often glows blue instead of red. The active ingredient in e-cigarettes is the same nicotine found in cigarettes and nicotine patches.

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The effects of inhaling nicotine vapor are not totally understood, but there is no evidence to date that it causes cancer. Experts and logic seem to agree that it’s a lot better than setting chopped-up tobacco leaves on fire and inhaling the nicotine along with thousands of combustion byproducts, some of which are definitely carcinogenic. Because cancer is the main drawback of smoking for a lot of people, the delivery of nicotine without lighting a cigarette is very attractive. And because it produces a wispy vapor instead of acrid smoke, an e-cigarette lets you bring your smoking back indoors, where lighting up in an enclosed space is no longer socially, or legally, acceptable.
Verleur saw right away that if e-cigarettes could be made as convenient and satisfying as a pack of smokes, he’d make a killing. He enlisted the help of his brother, an engineer working for an Agilent Technologies spinoff and at last opened a E-cig company

In a way, electronic cigarettes were made possible by cell phones. The drive to make phones smaller and lengthen their battery life led to the development of batteries and equipment small enough to fit in a container the size and shape of a cigarette. There’s some dispute over who invented the modern e-cigarette, but the first commercially marketed device was created by a Chinese pharmacist, Hon Lik, and introduced to the Chinese market as a smoking cessation device in 2004. From there, e-cigarettes made their way to small shops such as that of the Vietnamese grocer who sold Verleur his first one four years later.

From businessweek.

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