Like a little kid showing off her new toys, Donna Queen, a 50-year-old housewife from Coral Springs, giddily opens a black pouch and reveals her quiver of electronic cigarettes. One is covered in pink rhinestones that glitter like a disco ball. Another is decorated with a purple flower pattern.
She flashes a grin. "I'm a 35-year smoker. Smoked two-and-a-half packs a day. Now I haven't smoked in 23 days! I don't hack and cough anymore."
Since a relative introduced Queen and her 28-year-old daughter to e-cigarettes a month ago, the women have sampled scores of flavors, from tobacco and menthol to dill pickle, roast beef, Jolly Rancher, and Red Bull. Sure, they have blown some money on this new hobby, but conventional smoking cost the family "$95 every three days," she says.
Last Tuesday afternoon, the two were among nine customers inside Vapor Shark, a sterile-feeling retail store that brothers Brandon and Scott Leidel opened in mid-January on Hallandale Beach Boulevard. Though there were tables, chairs, and free coffee, shoppers hovered around a glass case, using disposable mouthpieces to puff away on samples of the store's main product — a reusable, rechargeable Fusion e-cigarette starter kit, which retails for $49.99.
Salesperson Jose Figueras was careful to say the product was not a smoking-cessation device but a "high-performance nicotine delivery system." The distinction mattered — for legal reasons.
The e-cig business today looks like a jackpot. The Wall Street Journal recently estimated the market to be worth about $300 million per year; analysts expect that number to skyrocket to $1 billion in the next year or two. With 42 million people in the United States who smoke cigarettes daily, there are still plenty of customers left to convert.
But how long this bonanza will last — and who might reap the long-term profits — is very much in question. The American Lung Association has warned that e-cigarettes "may do more harm than good." The American Cancer Society says, "There are questions about how safe it is to inhale some substances in the e-cigarette vapor into the lungs." And the FDA has expressed concern children will use them and become addicted to nicotine. There is little oversight of who sells e-cigarettes; the brothers who own Vapor Shark have criminal records, for instance. And vendors fear Big Tobacco will take over the business in the end. In April, the FDA is expected to release proposed regulations that could redefine the industry.
A lot of money is at stake. "E-cigs could surpass consumption of traditional cigs in the next decade," says Bonnie Herzog, an analyst who follows the tobacco industry for Wells Fargo.
E-cigarettes were invented by Hon Lik, a Chinese pharmacist, in 2003. Using battery power, these devices heat up "e-liquid" or "juice" and convert it into a vapor that can be inhaled. They started appearing in the United States around 2007 and were sold first through primitive websites and then at kiosks in malls.
That's where Brandon Leidel, now 37, picked up his first e-cigarette. "I was a smoker, and I had quit for five days, and I was struggling," he says. At the Dadeland Mall, "a guy stuck one in my face. I thought they were really stupid, but I was desperate. It was a way-overpriced piece of crap," but "I was blown away by it."
Many of the e-cigarette companies online had poor-quality websites and shady business practices, Leidel says. So he and his brother Scott decided they could do better.
They weren't typical young entrepreneurs. Both have criminal histories. In their teens and early 20s, both brothers were caught burglarizing neighbors' houses and cars and admitted to having drug addictions. In 1999 and again in 2001, Brandon was convicted of cocaine (crack) possession and went in and out of jail and rehab. In 2006, he was driving a stolen Astro van and fled police; he pleaded guilty to grand-theft auto, eluding police, and resisting arrest and was put on three years' probation.
Leidel admits, "In my 20s, I had all kinds of problems" but says he's been sober for six and a half years. "When I went into recovery, my life changed," he says. Also a drummer, Leidel says he worked for record labels and started doing online marketing for bands. He and Scott then founded their own multimedia marketing company, the Hand Media.
Using their web skills, they launched Vapor Shark online in 2010 and moved into a shopping plaza on Bird Road in March 2012. Though they initially had a Ping-Pong table and kegs of beer on tap, few customers partook; they just wanted the product.
Vapor Shark combines parts from three manufacturers to make its own e-cigarette. The company's liquids, Leidel says, "are made here in-house." Nicotine levels can be customized, from zero to 36 milligrams. "We have a guy back here — he's our juice man." A $20 bottle of juice should last a customer a month and a half.
Leidel says, "All of these electric cigarette liquids have the same ingredients: propylene glycol, vegetable glycerin, natural and artificial flavorings, and pure nicotine." Though the ingredients are FDA-approved for foods or lozenges, there are no long-term studies about inhaling them.
Ray Story, the 47-year-old president of the Tobacco Vapor Electronic Cigarette Association, has high hopes for the cigarettes. Reached in Amsterdam, he said his company — Miami-based Smoking Everywhere — once had kiosks in 450 malls across the country.
Story and his company were the ones who filed suit in 2009 and forced the FDA to retreat from initially classifying e-cigarettes as drug delivery devices (like nicotine patches), thus making tough regulations applicable. He was joined by a company called Sottera, whose then-CEO, Matt Salmon, won a seat in the House of Representatives last election. "We won and made it a legal product again," Story says. "Nicotine and caffeine don't do anything. They're just like water. Drink eight gallons of water and it'll kill you."
Although he supports independent retail outfits like Vapor Shark, Story thinks they'll be obsolete when e-cigarettes become "readily available at convenience stores." Big Tobacco, which initially ignored the e-cigarette market, is just getting in on the act. RJ Reynolds is developing its own brand, and Lorillard, which makes Newports, purchased e-cigarette brand Blu.
Scientific studies remain scant, and the battle rages on. Although FDA studies have found carcinogens in e-cigs, levels were not nearly as high as in traditional cigarettes. One study found that smoking e-cigarettes caused some respiratory distress. There are other issues as well: E-cigarettes aren't yet taxed but probably will be; and a company belonging to inventor Hon Lik has filed suit against a slew of companies for patent infringement.
At Vapor Shark's Miami store, Leidel says his company is already preparing for the FDA rules. These days, he says he's so busy he has had to hire two people. "People ask all the time whether they can open a franchise," he contends.
During a visit, no customers seemed to care they might be inhaling a scary substance mixed by some random juice guy in back.
"I thought it was the greatest invention ever," said Latoya Friday, a neurophysiologist who smoked Newports daily before switching to a "very chic" pink Fusion.
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"People are like, 'What is that?' And I'm like, 'It's the greatest thing ever,'" said 20-year-old FIU student Roger Notario, holding his black one.
A 57-year-old who gave his name as "Tommy" had been smoking for 40 years and, like his buddies — a group of troopers and policemen — was now switching to e-cigs. "Now about ten of us have them. It's spreading."
And at the Hallandale store, Jeff Godfrey, a 52-year-old, said, "The FDA is not there to help us. They're there to screw us." The only justification he could see for the FDA blocking e-cigarettes while allowing conventional ones was that "they would rather have you pay tax, then die."