Key Ruling Will Affect Smokeless "E-cigarette" Market Print E-mail
By Staff and Wire Reports   
Friday, 15 January 2010 01:32

On Thursday afternoon, there was a key ruling against the FDA that will help elevate shares of one booming industry as it hurts market shares of others.



In a special report late last month, Peter Depalma dove in to the "Smokeless Nicotine Debate" which examined how investors were scrambling to look for ways to cash in on the growing "E-cigarette" market. This is the same market that the FDA, big tobacco and certain pharmaceutical companies have been trying to squash. Last month, shares of Mobile Media Unlimited Holdings Inc. (OTC: MMUH.PK) one of the only publicly traded "E-cigarette" plays in the market shot up from sub-penny levels to nearly a nickle and it's likely that the same shares will get a much stronger boost now that this ruling has been published. In fact, we may be seeing more companies starting to trade publicly within this space because of this decision.

In that ruling yesterday, a U.S. judge said the U.S. Food and Drug Administration does not have authority to regulate electronic cigarettes, dealing a blow to the agency's efforts to regulate tobacco products as drugs or devices.

In a 32-page opinion, U.S. District Judge Richard J. Leon sided with electronic cigarette maker Smoking Everywhere Inc. in finding that the FDA has no authority to regulate the products and can't stop them from entering the country.

"This case appears to be yet another example of FDA's aggressive efforts to regulate recreational tobacco products as drugs or devices," Leon said in his ruling. He added the FDA's "tenacious drive to maximize its regulatory power has resulted in its advocacy of an interpretation of the relevant law that I find, at first blush, to be unreasonable and unacceptable."

Prior to this, the FDA had seized shipments of electronic cigarettes, which look and taste like cigarettes but don't contain tar.

Now Philip Morris wants the FDA to position tobacco product as safer alternative to cigarettes.

By most accounts, retailers who carry these smokeless cigaretted have trouble keeping them in stock, but it's not a phenomenon exclusive to the U.S. In China, the U.K. and Australia these E-Cigarettes are off the charts hits that offer users the chance to enjoy a puff without the 4,000 chemicals and toxins found in your typical death stick.

Electronic cigarettes use vapor comprised of propylene glycol, water, glycerin, flavoring, and nicotine to help soothe the urge for a smoke. In a country where 53,000 non-smokers die each year from second hand smoke, these electronic versions of cigarettes seem to be more readily accepted in public-  especially given the fact that the devices don’t produce actual smoke. They produce only vapor and users are given the freedom to enjoy their habit in even the most smoker unfriendly surroundings.




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