Goldman Sachs Managing Director ‘Cautiously Optimistic’ About E-Cigarettes

E-Vapor makes up about 5% of total nicotine market
Photograph: Shutterstock

MINNEAPOLIS — Government regulation hurt e-cigarette sales, but Goldman Sachs Managing Director Bonnie Herzog remains “cautiously optimistic” about the category.

“Certainly, I was a lot more bullish a couple of years ago when regulation was more limited,” Herzog recently told retailers during a webinar for the National Association of Tobacco Outlets (NATO), Minneapolis.

The U.S. Food and Drug Administration’s flavored cartridge ban, state-level tobacco sales bans in places like California and Massachusetts, the THC vaping crisis and a long and expenses premarket tobacco application (PMTA) process all stunted the category’s growth, Herzog said.

E-cigarettes, or e-vapor, is about 5% of the total nicotine market, based on 52-week retail dollar sales through Sept. 5, Herzog said. A couple years ago, that could’ve been closer to double, Herzog said.

The curtailed growth will continue, at least in the near-term, she said. One of the consequences of this regulation is people turning back to combustible cigarettes.  

“I’m not convinced that that’s what the FDA had in mind, but that is reality, and that’s also what helping the broader cigarette category,” Herzog said. “So we’re going to have to wait to see how this plays out as the FDA works through [the PMTAs], which, by the way, is going to take a very long time.”

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