E-Cigarettes Attracting Investors

Former Facebook president and Napster co-founder Sean Parker is heading a group that has invested $75 million in electronic-cigarette firm NJOY Inc.

June 11, 2013

NEW YORK ­– An investment group led by entrepreneur Sean Parker (Napster co-founder and former Facebook president) has acquired a $75 million minority stake in electronic-cigarette firm NJOY Inc., part of a wave of increasing interest and attention focused on the e-cigarette industry, the Wall Street Journal reports. 

The wave of interest includes Altria Group, which is expected to detail its e-cigarette plans soon; Reynolds American Inc., which announced that it would sell e-cigarettes in Colorado ahead of a national rollout; and Lorillard Inc., which acquired Blu Ecigs for $135 million last year.

All of the activity has prompted FDA tobacco czar Mitch Zeller to describe the e-cigarette market as “the wild, wild West” in terms of regulation.

Several states have already banned e-cigarette sales to minors, while others outlaw their use in enclosed public spaces. California is considering a bill that would bring e-cigarettes under smoke-free laws that apply to public buildings, workplaces and restaurants.

Federal regulators have yet to issue firm guidance on everything from age restrictions to advertising.

In the meantime, industry experts project U.S. retail sales of e-cigarettes could reach $1 billion this year, double that of 2012, no doubt a motivating factor in Parker’s investment. NJOY captured 35.6% of the $36.4 million in U.S. convenience store sales for the four-week period that ended May 11, according to Wells Fargo Securities, citing Nielsen scanner data.

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