The growing e-cigarette trend is helping to put a serious dent in the number of tobacco smokers in the U.S. today, this is according to a recent Centers for Disease Control and Prevention report.
The CDC says that the 18% drop in tobacco use has been offset e-cigarette use. These rates of change have also triggered an increase in tobacco cigarette prices as cigarette companies seek to maintain their revenues.
Wells Fargo also projected that e-cigarette sales will be higher than tobacco cigarette sales in just 5 years or so. If this is true, then there is a great deal of money to be made off e-cigarettes. But who stands to profit from these increased sales? One answer could shock you.
Big tobacco companies are one of the businesses that may stand to benefit from an increase in e-cigarette sales. This is partly because some of the biggest cigarette companies have also begun getting in the e-cigarette game.
In 2014, Altria acquired Green Smoke Inc. and just this year released their brand of e-cigarettes. Likewise, Reynolds American has begun collaborating with Lorillard to produce electronic smoking devices.
States Cashing In on E-Cig Sales
On top of the profit tobacco companies stand to make off e-cigarettes sales, state governments could as well—specifically through savings from Medicaid.
According to a State Budget Solutions report, at least 45 states (plus D.C.) would gain more money through Medicaid savings than they lost from being taxed for cigarettes and settlement payments. The report also states that around 51% of those on Medicaid smoke cigarettes. By reducing the number of Medicaid recipients who smoke, it could save states billions of dollars (around 48 billion to be more specific) in healthcare costs alone. This savings more than the states collected through taxes in 2012—around $24 billion.
Read our newest article, “How E-Cigarettes Could Save the Government Money,” to learn more.
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