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E-Cigarette Sales Are Smoking Hot

Annual sales of e-cigs could hit $20 billion in five years


ecigElectronic cigarettes — e-cigs — are proving something of a hit with smokers.

The pricey contraptions let users inhale the vapors of heated liquid nicotine without the smoke and other chemicals associated with cigarettes. Analysts predict that sales of e-cigs will hit $1 billion this year, double last year’s sales, ABC News notes.

Judge Tobacco Stocks by Their Cover
Judge Tobacco Stocks by Their Cover

While e-cigs are generating less than 1% of traditional cigarette sales, they are making inroads with consumers. In 2010, just 10% of adult smokers had tried an e-cig according to the Centers for Disease Control. By 2011, that figure had grown to 21%.

The rising popularity of e-cigs has health advocates worried. The CDC issued a report warning that e-cig use in public areas where smoking is banned could promote the idea that smoking itself is acceptable.

The Consumer Advocates for Smoke-Free Alternatives Association predicts that within five years, between 30% and 40% of cigarette smokers will have made the move to e-cigs, pushing annual sales to between $15 billion and $20 billion a year.

In June, Altria Group (MO) announced that it will begin test marketing of an e-cig under its MarkTen brand in the state of Indiana next month. Rivals Lorillard (NYSE:LO) and Reynolds American(NYSE:RAI) already have e-cigs on the market.

Article printed from InvestorPlace Media,

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