NEW YORK (MainStreet) — When Jonathan Gates quit smoking cigarettes, he discovered vape juice. “I bought my first e-cigarette two years ago,” Gates told MainSteet. “There is no other way to smoke nicotine without vape juice. It makes inhaling more enjoyable.”

The 33-year-old calls himself a fruity flavor person who also favors caramel, vanilla and hazelnut. “I am sensitive to vapor’s fatigue,” Gates said. “After a week, if I use the same flavor I can’t taste it anymore. I have to switch to another flavor.”

The manufacturing worker frequents Facebook pages such as Evansville Vapors and Mod Envy to discover new brands. “There are thousands of groups online,” said the Evansville, Ind. resident. “I have noticed new brands and flavors in the last couple of years. A few companies have sprung up because it’s a lucrative business.” The increasing varieties of flavors demonstrates vape juice as a consumer product success.

Currently about 50% of sales of juice is for the e-cigarette market, according to Palm Beach Vapors data, and cannabis-infused juice is expected to make up 10% to 15% of sales by 2016. "Through our juice system, franchisees can create thousands of different e-cig flavors from a suite of juice concentrates," said Chip Paul, co-founder of Palm Beach Vapors. "If a smoker wants a blueberry-strawberry cheesecake flavor, a local Palm Beach Vapor representative can create that specific flavor in seconds."

For example, Kingston MJuice markets flavor additives to cannabis enthusiasts. “Kingston’s MJuice is specifically designed to enhance the flavor of medical marijuana, much the same way flavors are applied to over-the-counter and prescription medication,” said Adam Laufer, whose MJ Holdings launched Kingston MJuice. “Kingston MJuice can be added to marijuana or hemp oil for ingestion, oil for vaporization as well as to dry herb and concentrates.”

Watermelon, mint blend, espresso, grape and chocolate are available MJuice flavors.

"Our formulations are on file with the FDA and are made in America in an FDA registered lab," Laufer told MainStreet. "Kingston represents a distinct opportunity for MJ Holdings and we expect to develop additional consumer facing products which are ancillary to the regulated marijuana space." 

Like marijuana, vape juice is not without its controversies.

In 2009, the American Food and Drug Administration reportedly tested 18 vape juice cartridges from two electronic cigarette companies and noted that one sample contained diethylene glycol, a chemical used in industrial antifreeze.

In response, Palm Beach Vapors created the M-System to improve methods for measuring THC and safely mixing cannabis oil for e-cigarettes and vaporizers.

“Most of our research and development is targeted at getting rid of the propylene glycol (PG) in e-cig mixtures,” said Paul, of Palm Beach Vapors. “Propylene glycol is the bad guy in the industry. Any negative study you have read about e-cigs will tie back to propylene glycol. Our research led to the discovery of our revolutionary M-System, which produces PG-free, food-safe cannabis-based vape.”

Based in Tulsa, Okla., Palm Beach Vapors also has franchises in Alabama, California, Florida, Texas, Indiana, Mississippi and Missouri.

“Our corporate revenues are generated by franchise sales, franchise royalties, licensing royalties, wholesale sales, juice sales and operations of our corporate vape shop,” said Paul. “At the franchisee level, revenue is recognized from retail sales of e-cig hardware, e-cig juice, wholesale sales and now M-System products.”

Later this year, new stores will be added in Ogden, Utah; Baltimore; Denver; Tempe, Arizona; Council Bluffs, Iowa; O'Fallon, Ill.; and Paris,Texas.

—Written for MainStreet by Juliette Fairley