Analysts have projected sales of electronic cigarettes would hit an estimated $1 billion in sales by the end of 2013, but e-cigarette vendors have already reached that milestone for the first time in the industry’s history, according to a new report from Wells Fargo and the e-cigarette startup V2. Wells Fargo projects e-cigarette retail sales for 2013 will reach $1.7 billion by the end of the year.

Wells Fargo’s senior beverage and tobacco analyst Bonnie Herzog says e-cigarette consumption will likely beat out traditional cigarettes in the next decade. That poses an increasing threat to Big Tobacco, whose players control a $35 billion industry. But several of these tobacco companies are also beginning to introduce their own proprietary e-cigarettes to the market.

Online retail is an integral part of the e-cigarette business, with more than half of this year’s sales expected to come from the Internet. But e-cigarette manufacturers have recently been in discussions with the Food and Drug Administration, which is considering banning online sales of e-cigarettes to keep them out of the hands of minors. The FDA is expected to unveil a series of proposals for industry regulations in October.