E-cigarettes hot in Hollywood

Leonardo DiCaprio digs them. Johnny Depp draws on them. Jenny McCarthy goes out with them.
They�re e-cigarettes, and they�re the latest symbol of Hollywood hip glam.
But this is no mere Hollywood fad to the big tobacco companies, which are betting that e-cigs can give them a much-needed boost.
The devices release nicotine-infused vapor for inhalation, and though they�re not exactly risk-free, the battery-operated devices are being marketed to both traditional and new smokers.
�If you�re Big Tobacco and competing against another Big Tobacco, the fact that they�re betting on e-cigarettes and [seeing] better profits � that makes a big difference,� explains Adriana S. de Lozada of PrivCo.
The gross profit margin on e-cigs, which range in price from an $11.99 Blu to a $26.97 NJOY three-pack � is 30 percent higher than for traditional cigarettes, according to a recent Wells Fargo Tobacco Retailer Survey report.
Not only that, the annual growth rate for e-cigs is expected to reach 30 percent, according to Wells Fargo Senior Analyst Bonnie Herzog�s report. She predicts e-cigarette consumption will �eclipse� traditional cigarettes �over the next decade.�
Big Tobacco company Lorillard, owner of Blu (which it acquired for $135 million in 2012), captures nearly half of the US e-cigarette market, at 49 percent. Third-quarter Blu sales saw a fourfold increase in revenue over the same quarter one year ago.
Additionally, Reynolds American and Altria Group, the largest cigarette producer in the country, are test-marketing their own e-cig brands.
Will this �steamy� affair last? E-cigarettes are largely unregulated, unlike their ugly stepsisters. But FDA regs may come down as soon as next week, and they could stunt the market�s growth.
�It�s all about timing right now for these companies. Once the regulation starts to come in, there�s going to be � more focus on marketing and marketing costs,� says analyst Lozada.