E-Cigarette Fears Spur Hawaii to Raise Smoking Age

NEW YORK (TheStreet) -- While e-cigarettes are an area of growth for big tobacco companies, their popularity with young smokers could spur more U.S. states to raise the minimum age to buy all tobacco products.

Hawaii became the first state to raise its minimum smoking age to 21, citing a recent study of six Hawaii high schools that found 18% of 9th and 10th graders use electronic smoking devices regularly. Previously, Hawaii's age limit was 18, the same as the federal minimum age. 

E-cigarettes are now a $6 billion market worldwide, according to market research firm Euromonitor. That's just a fraction of the $100 billion tobacco industry, but big cigarette makers such as Altria Group (MO)and Reynolds American (RAI)have each moved quickly to enter the electronic market to compensate for slowing domestic sales in their flagship cigarette brands. Higher minimum age purchase requirements shrink their pool of legal consumers.

Reynold's RJR Tobacco domestic cigarette shipment volume fell 5% from 2013 to 2014, according to regulatory filings. Altria's Philip Morris USA disclosed that its total cigarette shipment volume in the U.S. dropped 3% from 2013 to 2014.

Nu Mark, an Altria e-vapor subsidiary that debuted an e-cigarette in 2013, estimated in company filings that total annual consumer expenditures on e-vapor products in 2014 were $2 billion.

Vuse, an e-cigarette brand produced and distributed by a division of RJR, was given a national launch in early 2014.

According to the Centers for Disease Control and Prevention, nearly 264 billion cigarettes were sold in the United States in 2014, a 3.3% decrease from 2013. But for the first time in 2014, e-cigarette use surpassed every other tobacco product including conventional cigarettes among high school and middle school students.

Congress passed a federal minimum smoking age of 18 in 2009, but then directed the Food and Drug Administration to determine if it should be pegged even higher.

In March, an Institute of Medicine study commissioned by the FDA projected that a national minimum smoking age of 21 would mean 25% fewer smokers between the ages of 15 and 17, and 15% fewer smokers between 18 and 20.

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