Senator Durbin Back at It With FDA E-Cig Recommendations – The Industry Is Already Prepared

Massachusetts Senator Dick Durbin (Dem.) – who most recently was a mouthpiece for Bill Ackman’s claim that HLF is a pyramid scheme – was joined by Senators Waxman, Harkin, Rockefeller and members of Congress in releasing a report this morning titled “Gateway to Addiction? A Survey of Popular Electronic Cigarette Manufacturers and Targeted Marketing To Youth”.


Lorillard (LO) remains our preferred name in tobacco and we believe the contents of this report have already been priced into the tobacco stocks . Why?


The report says nothing new about the industry’s own stance on the likely “deeming” regulation that the FDA will hand down on e-cigs.


In the conference calls we’ve held with the CEOs of e-cig companies, including with NJOY, LOGIC, Ballantyne Brands, and Victory – they’ve all suggested to us that they’re bracing for FDA regulation, including:


  • A ban of online commerce
  • Age verification standards at retail
  • Flavor limitations (beyond tobacco and menthol)
  • Health/safety certifications
  • Labeling and marketing requirements

Directly below are the key recommendations from the Durbin & Co. report, which show great overlap between its call for regulation and those that are being braced for/expected and encouraged from the industry. 


Senator Durbin Back at It With FDA E-Cig Recommendations – The Industry Is Already Prepared - a. durbin ecig recs


Note that the group solicited information via surveys sent to 9 e-cig manufacturers last September, including to MO (Mark-Ten), RAI (Vuse), LO (blu), NJOY, Eonsmoke, LOGIC, VMR, Green Smoke, and Lead by Sales. It reported that all the companies responded to the survey except for Lead by Sales.


The report’s loudest call, to keep e-cigs out of the hands of children (no marketing of them, no attractive properties like flavors, no ease to purchase via strict age restriction), again echoes the industry’s leaders’ expectations and desires for the category, and we believe that the FDA, when it chooses to act, is likely to carve out similar standards so as to treat e-cigs similar to traditional cigarettes in terms of sales and marketing.


Call with questions,



Howard Penney

Managing Director


Matt Hedrick



Fred Masotta


SECTOR SPOTLIGHT | Live Q&A with Healthcare Analyst Tom Tobin Today at 2:30PM ET

Join us for this edition of Sector Spotlight with Healthcare analyst Tom Tobin and Healthcare Policy analyst Emily Evans.

read more

Cartoon of the Day: Bulls Leading the People

Investors rejoiced as centrist Emmanuel Macron edged out far-right Marine Le Pen in France's election day voting. European equities were up as much as 4.7% on the news.

read more

McCullough: ‘This Crazy Stat Drives Stock Market Bears Nuts’

If you’re short the stock market today, and your boss asks why is the Nasdaq at an all-time high, here’s the only honest answer: So far, Nasdaq company earnings are up 46% year-over-year.

read more

Who's Right? The Stock Market or the Bond Market?

"As I see it, bonds look like they have further to fall, while stocks look tenuous at these levels," writes Peter Atwater, founder of Financial Insyghts.

read more

Poll of the Day: If You Could Have Lunch with One Fed Chair...

What do you think? Cast your vote. Let us know.

read more

Are Millennials Actually Lazy, Narcissists? An Interview with Neil Howe (Part 2)

An interview with Neil Howe on why Boomers and Xers get it all wrong.

read more

6 Charts: The French Election, Nasdaq All-Time Highs & An Earnings Scorecard

We've been telling investors for some time that global growth is picking up, get long stocks.

read more

Another French Revolution?

"Don't be complacent," writes Hedgeye Managing Director Neil Howe. "Tectonic shifts are underway in France. Is there the prospect of the new Sixth Republic? C'est vraiment possible."

read more

Cartoon of the Day: The Trend is Your Friend

"All of the key trending macro data suggests the U.S. economy is accelerating," Hedgeye CEO Keith McCullough says.

read more

A Sneak Peek At Hedgeye's 2017 GDP Estimates

Here's an inside look at our GDP estimates versus Wall Street consensus.

read more

Cartoon of the Day: Green Thumb

So far, 64 of 498 companies in the S&P 500 have reported aggregate sales and earnings growth of 6.1% and 16.8% respectively.

read more