Regulation 
 
 (Corrects fourth paragraph reference to products that face normal sales taxes.) 
 
 Apparently, the nicotine business never changes—with smoke or without. Big Tobacco fought government overseers for decades, but eventually traditional cigarettes became heavily regulated products. Now the Food and Drug Administration is working on a package of regulations for e-cigarettes devices, which vaporize liquid nicotine with heat, rather than burning it via tobacco leaves. Among other things, the FDA is considering a ban on online sales of e-cigarettes to cut down on sales to minors, and discussing whether to curtail advertising. A roster of proposed rules is expected in October. 
 
 The regulatory chatter comes as the e-cigarette market is finally expected to top $1 billion this year. Tobacco giant Altria Group (MO) is just this month rolling out its e-cigarette, dubbed “MarkTen.” Reynolds American (RAI) is also rushing to ship its VUSE product. Meanwhile, Lorillard (LO) booked $57 million in e-cigarette revenue in the first three months of the year. 
 
 Bloomberg Industries estimates that at their current pace, e-cigarette sales will top that of traditional smokes by 2047. The estimate comes with a big caveat: the assumption that politicians won’t heap a bunch of new taxes on e-cigarettes—levies that have served as a sort of emphysema to the body of the cigarette business. 
 
 Currently, e-cigarettes are subject to ordinary sales taxes—just like, say, pencils. Big Tobacco loves that. Here’s why: In the average state, 11 percent of cigarettes are smuggled, according to a recent report by the Mackinac Center for Public Policy, a Michigan think tank. “Smuggled” in this case has a few meanings. It includes smokes that are illegally ferried from states and countries with lower taxes, as well as counterfeit cigarettes. 
 
 “Once a tax gets too high, it acts in the same way that Prohibition did: You get substantial black-market activity,” says Scott Drenkard, an economist at the Tax Foundation. 
 
 Meanwhile, the preponderance of smuggled cigarettes is alarming and the Mackinac Center says counterfeits—often stuffed full of sawdust and “human excrement”—are a growing problem. Here’s a look at the share of cigarettes that are smuggled in the top five states: 
 
 • New York 61 percent ($4.35 taxes per pack) 
 
 • Arizona 54 percent ($2.00) 
 
 • New Mexico 53 percent ($1.66) 
 
 • Washington 49 percent ($3.03) 
 
 • Rhode Island 40 percent ($3.46) 
 
 As tobacco giants roll out their e-cigarette offerings, the new smokeless devices are where they’ll focus their efforts. And as long as the government doesn’t burn them with a bunch of new taxes, they will probably be happy to keep e-cigarettes off billboards or Web stores or whatever requirements regulators throw their way. ||||| CLOSE New federal rules announced Thursday have the potential to upend the multibillion-dollar electronic cigarette industry just as it is attempting to position itself as an alternative to traditional cigarettes. (May 5) AP 
 
 In this Wednesday, Feb. 17, 2016 photo, Stephanie Wilson, an employee at Breathe Vapor, a retail shop that specializes in electronic cigarettes, exhales vapor at the store in East Peoria, Ill. (Photo: Ron Johnson, AP) 
 
 Electronic cigarettes will now be regulated much like tobacco cigarettes and their sale to children banned, according to a new federal rule issued Thursday. 
 
 Under the rule, the U.S. Food and Drug Administration would have to approve all tobacco products not currently regulated that hit stores after February 2007. The e-cigarette industry was virtually non-existent before then. 
 
 Premium, hand-rolled cigars, as well as hookah and pipe tobacco, are also included in the new regulation, which federal officials call "historic." The rule prohibits selling "covered tobacco products" to people younger than 18, and buyers must show photo ID. It also requires health warnings be displayed on cigarette tobacco, roll-your own tobacco, and covered tobacco product packages and in advertisements; and bans free samples and the sale of covered products in vending machines not located in adult-only facilities. 
 
 The Tobacco Control Act of 2009 sets Feb. 15, 2007, as the latest date by which all tobacco products would have to have to be grandfathered in. Mitch Zeller, head of the FDA's Center for Tobacco Products, has said publicly that he couldn't choose a later date, although industry officials disagree. 
 
 That means nearly every e-cigarette on the market — and every different flavor and nicotine level — would require a separate application for federal approval. Each application could cost $1 million or more, says Jeff Stier, an e-cigarette advocate with the National Center for Public Policy Research and industry officials. 
 
 An amendment to appropriations legislation working its way through the House would change the date so more e-cigarettes would be grandfathered in. White House Press Secretary Josh Earnest said Thursday that President Obama "takes a very dim view of attaching ideological riders to appropriations bills," but stopped short of threatening a veto of any legislation. 
 
 The proposed rule was released more than two years ago, in April 2014, and the final rule gives the industry two additional years to comply. The industry will have had "plenty of time to submit their applications," says Robin Koval, CEO of the Truth Initiative, an anti-tobacco health group. 
 
 However, stores have to comply with the rule in about three months (90 days from its publication May 10), and Zeller says contractors tasked with enforcement will be ready to "hit the ground running" on Day 91. 
 
 Koval says "it's perfectly reasonable" that people should know what's in something that "you inhale into your lungs." 
 
 Ellen Hahn, a professor at the University of Kentucky College of Nursing and co-chair of the UK Tobacco-free Task Force, said the new rule is a good first step toward controlling e-cigarettes. "From a health perspective, to reduce the social acceptance of them is good because frankly, it's the wild, wild West out there," she says. "Vape stores are everywhere." 
 
 She says so-called "vaping" can get kids hooked on nicotine and threatens to prolong "the tobacco epidemic." E-cigarette use has been rising steadily, especially among youth. According to the U.S. Centers for Disease Control and Prevention, e-cigarette use among high school students rose from 1.5% in 2011 to 16% in 2015. Federal health officials estimate that about 3 million middle and high school students use e-cigarettes. 
 
 Matthew Myers, president of the Campaign for Tobacco-Free Kids, says the rule announced Thursday falls short in protecting children because it doesn't restrict the use of sweet e-cigarette flavors such as gummy bear and cotton candy even though the FDA's own data show flavors play a big role in youth use. 
 
 Industry experts say treating e-cigarettes, which don't contain tobacco, the same as cigarettes could lead to such onerous and costly approval that all but the largest tobacco companies would be forced out of the market — and possibly those companies, too. Zeller says he expects consolidation in the number and type of products and vape shops. 
 
 The Tobacco Control Act requires the FDA to use science to weigh the potential benefits of e-cigarettes against any potential health risk for both individual users and the whole population, which Stier says would be all but impossible. 
 
 That could force e-cigarette smokers back to regular cigarettes, he says. 
 
 E-cigarettes help people trying to quit smoking, says Patricia Kovacevic, general counsel and chief compliance officer at e-cigarette manufacturer Nicopure. She and other e-cigarette advocates cited a Royal College of Physicians' report last week that showed e-cigarettes' benefits. 
 
 Department of Health and Human Services Secretary Sylvia Burwell says, "There are many other cessation tools available." 
 
 Customer Jeff Kaiser, Assistant Manager Russell Major and Manager Jason Westbrook gather near the counter at 723 Vapor in Louisville. (Photo: Laura Ungar, USA TODAY) 
 
 But Russell Major, an e-cigarette user and store manager of 723 Vapor in Louisville, Ky., says e-cigarettes were the only thing that helped him quit a 13-year tobacco habit. The 33-year-old former Marine says he also tried nicotine patches and gum, to no avail. Major says he doesn't think e-cigarettes should be regulated like tobacco cigarettes. 
 
 "To me, we don't really understand the long-term health risks. We don't know if there are health risks," he sais. But he adds:"I can support the ban on the sale of e-cigarettes to minors. ... I have kids of my own." 
 
 Lawmakers have to address the possible adverse health effects of e-cigarettes, Kovacevic says, but the rule doesn't account for the comparative benefits of e-cigarettes over regular tobacco products for improving overall public health. 
 
 Workers at the at J.C. Newman cigar factory, using vintage machines, some 90 years old, make cigars on April 21, 2016, in Tampa Bay, Florida. Company President Eric Newman says new regulations on cigars expected any day now from the US Food and Drug Administration could end his 130-year-old business by making it too costly and complicated to introduce new blends of cigars. (Photo: KERRY SHERIDAN, AFP/Getty Images) 
 
 Koval agrees that e-cigarettes "are dramatically less harmful" than regular cigarettes. 
 
 "But they're not without harm," she says. "It would be hard to make a product more harmful or toxic than cigarettes." 
 
 Contributing: Gregory Korte 
 
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– The American e-cigarette business is booming: It's expected to make more than $1 billion this year, and sales are projected to overtake those of real cigarettes by 2047. Big tobacco is probably fine with this, reports BusinessWeek, and the reason why is surprising. According to a recent report, an average of 11% of cigarettes sold in each US state are smuggled in, and that figure is way higher in states like New York (61%), Arizona (54%), and New Mexico (53%). "Smuggled" smokes can be anything from those brought in from other states with lower taxes to counterfeit cigarettes—which are sometimes stuffed with sawdust and "human excrement." "Once a tax gets too high, it acts in the same way that Prohibition did: You get substantial black-market activity," says an economist. E-cigs, on the other hand, are only subject to regular sales taxes, so the black market incentive isn't there. Tobacco giants are now moving their focus to the e-cig market and launching products of their own. Of course, now the FDA is looking to start regulating the industry, as the Wall Street Journal reports. But bans on online sales or advertising restrictions probably won't bother them that much, the BusinessWeek report suggests—so long as they're not hit with taxes.