Hope you are keeping well.

We are getting loads of orders for Vape labels at the moment and talking to other guys in our industry they are all getting the same - we are talking millions of labels. The industry is seriously expanding, at this time it appears to be multi small to medium players but there must be some serious money to be made somewhere!

The label, bottle, liquid etc. can't come to more than £1.50 so potential profit is there.
I know you've probably already had a look but thought I'd mention it!

 

Eoin Treacy's view

Thank you for this insightful email. The market for e-cigarettes has been somewhat overshadowed by the hoopla surrounding the evolution of the cannabis industry in the USA. Part of the reason for this is because there has been considerable controversy about the safety of the chemicals used in the vapourising process and the fact that some of the flavours such as bubble gum appear to be directly aimed at children. That resulted in related shares initially surging but subsequently collapsing because the cost of getting new products approved by regulatory authorities surged. 

This article last month from Cancer Research UK may be contributing to the surge in demand for e-cigarette paraphernalia in the UK. Here is a section:

The fact that e-cigarettes don’t produce tobacco smoke and the countless chemicals found within it has always suggested that these devices should be safer than smoking. But when they first came to the market, there wasn’t enough research to be sure of this. This is why scientists around the world have sought to understand what’s in e-cigarettes and what the impact of these products might be.

Early studies looking into this showed that e-cigarette liquids, and the vapour they produce, don’t contain the same level of most toxic chemicals as tobacco cigarettes. In fact, these levels have been found to be so low that Public Health England and the Royal College of Physicians estimate that e-cigarettes are ‘around 95% safer than smoking’.

But, until now, nobody had looked at what everyday users are actually exposed to in the real-world.

So the study out today, led by Dr Lion Shahab, is the first to look at the effects of e-cigarettes in what they define as ‘long-term users’.

And 

But the key finding came when the team looked in the samples at the levels of potentially toxic chemicals. They found that there was a remarkable difference in the levels of these substances between the different groups. In fact one chemical, called NNAL (known to cause lung cancer), was 97% lower in e-cigarette users compared to smokers.

Not only did e-cigarette users have lower levels of these substances compared to smokers, but they were also found to have very similar levels to people using NRT – something that Shahab is quick to point out is known to be relatively safe.

“We have 3 decades of research into the safety of NRT, and we’ve not picked up any significant long-term health issues,” he says.

The large tobacco companies have been moving into the e-cigarette market since at least 2014 so this news may be contributing to their return to outperformance over the last couple of months. 

Imperial Brands (Est P/E 14.41, DY 4%) bounced back impressively from the November drawdown and will need to hold the move above the trend mean if medium-term potential for additional upside is to be given the benefit of the doubt. 

British American Tobacco (Est P/E 18, DY 3.28%) bounced back even more emphatically and moved to a new high two weeks ago. 

US listed Philip Morris International (Est P/E 22.9, DY 3.76%) has also surged higher over the last couple of months and is becoming increasingly overextended relative to the trend mean. 

Reynolds American (Est P/E 23.74, DY 3.37%) posted a large upside weekly key from its November low and while some consolidation of recent powerful gains is looking increasingly likely a sustained move below the trend mean would be required to question the consistency of the overall advance.