Nation & World

FDA cracking down on e-cigarettes

So why are e-cig makers' stocks soaring?

Dreamstime/TNS

Makers of some e-cigarette brands saw their stocks jump Wednesday after the FDA announced a crackdown on the products over concerns about how popular they’ve become among children.
Dreamstime/TNS Makers of some e-cigarette brands saw their stocks jump Wednesday after the FDA announced a crackdown on the products over concerns about how popular they’ve become among children.

It’s bad for business when regulators target one of your fastest-growing products — unless they also go after a competitor working to put you out of business.

That, in essence, is why the makers of some e-cigarette brands saw their stocks jump Wednesday after the U.S. Food and Drug Administration announced a crackdown on the products over concerns about how popular they’ve become among children.

The federal intervention — requiring e-cig makers to come up with detailed plans for curbing sales to minors or risk having their products pulled from the market — could be very bad news for Juul, the hot San Francisco company that almost overnight became the market leader in e-cigarettes.

That means it could be good news for Big Tobacco companies including Altria, Imperial Brands and British American Tobacco.

Altria, the maker of Marlboro smokes, saw its share price rise nearly 7 percent on Wednesday. Camel maker British American Tobacco’s shares jumped 6 percent.

Shares of Imperial Brands, the maker of Winston and Kool cigarettes, rose 3 percent. Juul is privately held.

All three of those companies compete with Juul in the e-cigarette market — but, unlike Juul, they also sell regular cigarettes, meaning a government crackdown on e-cigarettes doesn’t hurt as much.

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Ultimately, such a move could push Big Tobacco back into the lead in the e-cig market, analysts said Wednesday.

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