But the Food and Drug Administration is set to decide soon whether the e cigarette market should remain the Wild West, unfettered by strict advertising and other rules that apply to normal cigarettes. The looming FDA decision and increased attention on Capitol Hill and state capitals have set off a lobbying frenzy in Washington and across the country.

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The industry remembers what happened the last time government stepped in millions of Americans extinguished their smoking habit. So this time Big Tobacco will fight just as hard or harder to protect its turf, even if if means reigniting the Tobacco Wars.

“We believe that regulatory and tax policies should encourage smokers of combustible cigarettes to switch to e cigarettes,” said Michael Shannon, vice president of Lorillard, arguing that e cigarettes should be treated differently than traditional cigarettes because they are different products. “We welcome reasonable FDA regulation on e cigarettes, but feel strongly that regulatory policy should not stifle what may be the most promising tobacco harm reduction product ever.”

The industry s pitch The battery powered cigarettes don t contain tobacco, so they will help hard core smokers switch to a safer alternative, helping save lives.

Even though the Big Tobacco companies have not been able to advertise on TV for four decades, e cigarette ads are now blanketing the airwaves with the firms taking full advantage of the lack of federal restrictions on their products.

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Marlboro maker Altria Group Inc., got in the market with its “MarkTen” electronic cigarette, Reynolds American unveiled the “VUSE” electronic cigarette and Lorillard acquired “blu” e cigarettes. Other big money backers like Silicon Valley entrepreneur Sean Parker have gotten in the action. He s among a group that invested $75 million in Njoy, which markets its product as a way to quit smoking.

But Big Tobacco s emergence in this new market has given ammunition to critics who say e cigarettes which turn nicotine and other chemicals into an inhalable vapor and whose health effects are not fully known are a back door way for the tobacco giants to regain their prominence by hooking a new wave of smokers onto nicotine.

Even independent e cigarette makers say that the emergence of Big Tobacco in the marketplace only complicates their argument that their products will help wean the country off of tobacco and should not be regulated as such.

Richard Carmona, the former U.S. surgeon general who now sits on the board of Njoy Inc., an e cigarette maker not affiliated with a tobacco company, says that his company s goal is to make tobacco “obsolete.”

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But given Big Tobacco s huge investment in e cigarettes, Carmona acknowledges that it “confuses” the industry s argument.

“I talk to people today, and they say, How can you get in bed with tobacco companies? ” said Carmona, a Democrat who lost a 2012 Senate race in Arizona. “I say, I m not. I say, Njoy is not a tobacco company. “

The issue isn t completely new on Capitol Hill and many lawmakers who smoke or are trying to quit have been spotted using e cigarettes, including Boehner and Rep. Duncan Hunter (R Calif.). But the industry isn t relying on potential customers on Capitol Hill to defend the industry.

To push its position, Lorillard has done everything from typical shoe leather lobbying to featuring its blu e cigarettes on signs at a smoking tent it sponsored at the annual “Taste of the South” bash, an event that draws hundreds of Capitol Hill aides and lawmakers, largely from southern states.

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The law firm Dickstein Shapiro billed $2.6 million to Lorillard in lobbying fees for the first nine months of 2013, according to federal lobbying reports. The firm s reported monitoring “all federal and legislative action related to e cigarettes,” among other issues for the company. Lorillard also has Strategic Action Public Affairs on retainer, including GOP strategists Stuart Roy and Blain Rethemeier to work on blu and e cigarette issues.

Blu has even enlisted Hollywood stars like Jenny McCarthy and Stephen Dorff to hock its products, something that is verboten for traditional cigarette brands like Marlboro. A consultant for Lorillard said blu “selected its celebrity spokespeople, the placement of the advertisements featuring these individuals and the events in which they appear to be consistent with blu s goal of reaching smokers and vapers 18 years of age or older.” Both McCarthy and Dorff are over 40 years old.

Lorillard is hardly alone. Altria and Reynolds American paid big in Washington in 2013, spending $7.8 million and more than $1.7 million, during the first nine months of 2013 on lobbying, respectively, though the companies and their consultants did not specify electronic cigarettes on the reports. Independently owned Njoy meanwhile beefed up in Washington by hiring the Downey McGrath Group in November. The company also paid Shockey Scofield Solutions $80,000 over six months of work, according to Senate lobbying disclosure reports.

E-cigarettes face tough new restrictions – abc news

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By Richard Davies
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Mar 5, 2014 8 38am

(Photo Credit Martina Paraninfi/Getty Images)

Morning Money Memo

The debate over e cigarettes is heating up. Los Angeles has joined New York and Chicago, becoming the latest big city to approve new restrictions. By a 14 0 vote the L.A. City Council outlawed “vaping” inhaling e cigarette vapors at most public places, including parks and some beaches. Council members defeated a proposal to allowing vaping in “bars and nightclubs.

The push for regulations is a threat to the rapidly growing e cigarette industry. Sales of e cigarettes reached $1.5 billion in 2013, according to an analysis by Bloomberg News. Altria, Lorillard and other producers have marketed e cigarettes as a healthier alternative to smoking. But industry critics say they are a gateway for teens and others to try cigarettes.

General Motors’ new CEO Mary Barra is also taking a strong personal interest in consumer safety, leading an internal review of the company’s practices after an embarrassing recall of 1.6 million older small cars. GM last week doubled the number of cars included in a global recall over faulty ignition switches that have been linked to 13 deaths. The company issued a rare apology for the slow response and admitted it knew of the problem a decade ago. Barra says GM’s reputation will be determined by how the company handles the problem.

A bank specializing in bitcoins says it shut down after computer hackers robbed its digital currency. The closure of the Flexcoin bank comes just a week after the collapse of Mt. Gox, a major bitcoin exchange. Mt. Gox also said it was the victim of an electronic heist. Flexcoin says 896 bitcoins were stolen from its online vault. That translates into a loss of about $600,000, based on the current trading value. Unlike banks dealing in government backed currencies, Flexcoin’s losses aren’t covered by deposit insurance.

It was a major relief rally. Stock averages had their best day of the year so far. The S&P opens this morning at a record high after gaining 1 1/2 percent Tuesday. The Nasdaq is at a 14 year high. The belief on financial markets is that the worst of the crisis over Ukraine and the threat of a broader Russian invasion may be over. Asian stocks rose overnight as tensions appeared to ease.

China’s government is promising a series of changes to promote competition and economic growth by opening state run industries to private investment and making banks more market oriented. China’s top economic official says more consumer spending will be encouraged. Chinese authorities say they want to keep this year’s growth target at 7.5 percent.

Richard Davies Business Correspondent ABC News Radio Twitter daviesnow

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