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FDA's proposed e-cigarette regulations might affect mCig, Inc. (OTCBB:MCIG)

Companies in the e-cigarette industry might be affected by the Food and Drug Administration's latest attempt to regulate e-cigarettes. One in particular, mCig, Inc. (OTCBB:MCIG), could see the latest proposals as a benefit or a setback.

The Food and Drug Administration is making another attempt at regulating electronic cigarettes and other tobacco products.
Photo by Joe Raedle

According to a CNN report released today, "Manufacturers would be required to register all their products and ingredients with the FDA. They would only be able to market new products after an FDA review, and they would need to provide scientific evidence before making any claims of direct or implied risk reduction associated with their product."

The proposals don't stop there. Other recommendations include:

  • A ban on the sale of e-cigarettes to minors.
  • A prohibition on distributing free samples.
  • A ban on selling e-cigarettes in vending machines unless they are in places that never admit young people.
  • A requirement that e-cigarettes carry warnings that they contain nicotine, which is addictive.
  • E-cigarette manufacturers would be required to disclose the ingredients in their products.

At the moment, only e-cigarettes that are marketed for therapeutic purposes are currently regulated by the FDA Center for Drug Evaluation and Research (CDER). E-cigarettes deliver nicotine to the user as a vapor. They are usually battery-operated and come with a replaceable cartridge that contains liquid nicotine. When heated, the liquid in the cartridge turns into a vapor that's inhaled.

But the proposed regulations could be a few years too late. The Centers for Disease Control and Prevention (CDC) reports the percentage of high school students who reported ever using an e-cigarette rose from 4.7 percent in 2011 to 10.0 percent in 2012. More information about that report can be found here.

For companies like mCig, Inc., the FDA's proposed regulations could help make their industry more mainstream, and clear hurdles for future products. On the other hand, it could slow the process down, leaving investors in limbo. Recently the company announced VitaCig, Inc. has filed a Form S-1 with the Securities and Exchange Commission (SEC) for the registration of 250,000,000 VitaCig, Inc. shares. The shares will be paid out to mCig, Inc. shareholders as a dividend on the record date.

mCig, Inc. manufactures and retails the mCig , which provides what they call "a superior smoking experience by heating plant material, waxes, and oils delivering a smoother inhalation experience." The company is also known for the VitaCig, a $2 nicotine-free eCig that delivers a water-vapor mixed with vitamins and organic flavors.

mCig, Inc. opened Thursday morning's trading at $0.567, up 0.002 (0.44%).

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