In the USA and around the world the bandwagon is getting full. A recently article on Mashable makes claim the electronic cigarette industry has already produced $2 billion in retail sales this year alone. The industry is taking off all over the country and attracting Big Tobacco and investors alike. Some very big names such as Sean Parker, R.J. Reynolds, Altria (Parent company of Phillip Morris) and Peter Thiel.
In recent news all the major Tobacco companies have announced entering the market or large scale launches of new e cigarette brands such as Altria’s MarkTen, R.J. Reynolds Vuse e-cigarette. This join the likes of Lorrillards Blu E cigarettes and V2 e cigs which already known and growing e cigarette brands in the US. All of these companies are jockeying for position and large scale campaigns like V2 E cigs which plans to launch in the Czech Republic soon. All of them are also scrambling to take advantage of opportunity to grab market share before regulation is finalized.
Some of the most interesting investment comes from Silicon Valley, most notably Sean Parker and Peter Thiel. Parker knows for founding Napster and his involvement in Facebook finds his way into electronic cigs by way of Njoy and american electronic cig manufacturer but being part of a recent $75 million dollar investment. Included in that $75 million is investment from Thiel who is famous for starting PayPal and funding the anti smoking movie “Thank You for Smoking”.
This is a strong indicator for a few reasons:
1. Being that investment is being attracted out of Silicon Valley, which is know for software and tech. Thrown in the names of founders like Parker and Thiel and it makes you wonder is it already too late to jump on the bandwagon. These investors are know for pioneering new products and markets and have been very successful with a track record to prove it. Adding these 2 to the bandwagon will ultimately raise eye brows and attract more investors to the wagon.
2. Thiel jumping on board is just as interesting considering he funded “Thank you for Smoking”. The movie depicts a Tobacco Lobbyist and how he spins cigarettes and tries to curb the lung cancer and cigarette connection. The point being all the research studies are funded by Big Tobacco themselves. So Thiel funding this movie is a clear statement he is against Big Tobacco and smoking. So does him investing in electronic cigarettes mean he as well thinks e-cigs are a safer alternative to smoking?
There is growing believe that electronic cigs are not only safer than tobacco cigarettes but do not cause lung either. There currently is not long term studies or proof that this is true so it is a bold statement by these investors stating their believe in electronic cigarettes by investing early on. Is this all about money and opportunity or really a new healthier alternative to cigarettes.
The next big wave to come in the electronic cig industry is regulation and enforcement. With all the recently money being thrown at e cigs will this mirror classic Big Tobacco practices of funding and skewing thier own research? Ultimately some of these companies will spend a good portion of that money to fund studies on long term effects of electronic cigarettes and links to cancer and second hand smoke. However electronic cigs already have a different feel than tobacco cigarettes by society. Electronic cigarettes are they just the next generation of cigarette or a new tech product and healthier alternative?