March 4 (Bloomberg) — The Los Angeles City Council voted to join New York and Chicago in banning the use of electronic cigarettes in workplaces, restaurants and many public areas, threatening the growth of an industry segment that reached $1.5 billion in sales last year.

By a vote of 14-0, the council of the second-most populous U.S. city approved the measure to treat so-called e-cigarettes the same as conventional tobacco products, which California has restricted since 1995. If Mayor Eric Garcetti signs the legislation, the ban would take effect a month later. Garcetti spokesman Yusef Robb did not immediately respond to an e-mail asking for the mayor's position.

Sales of e-cigarettes reached $1.5 billion in 2013, according to Bloomberg Industries analyst Kenneth Shea, as established industry players including Altria Group Inc., Lorillard Inc. and Reynolds American Inc. marketed the products as safer, tastier alternatives to smoking. Local and state limits on e-cigarettes, which are shaped like conventional cigarettes and vaporize a liquid containing nicotine and flavorings, may curb the growth of the segment, said Cynthia Cabrera, executive director of the Smoke Free Alternatives Trade Association, an electronic cigarettes industry group.

Recommended For You

'Very Rapidly'

"We're opposed to such restrictions, primarily because e- cigarettes don't contain tobacco and they don't emit smoke," she said by e-mail. "These bans have the potential to stifle the growth of the category. It's an industry that's expanding very rapidly, offering smokers an alternative to combustible cigarettes, and by our estimation, creating close to 100,000 jobs in the process."

City Councilman Mitch O'Farrell, who proposed the Los Angeles rules, said the vapor from electronic cigarettes may contain carcinogens and other harmful agents. There are no regulations on materials in the flavor cartridges inserted into e-cigarettes, some of which carry marijuana derivatives, O'Farrell said in an interview.

"E-cigarette and big tobacco lobbyists have their talking points very clear — they're misleading and inaccurate," O'Farrell said. "My mission is to protect public health."

Quitting Smoking

The drive against e-cigarettes is motivated by hostility toward the tobacco industry and encouraged by pharmaceutical companies that sell nicotine-delivery systems to people trying to quit smoking, said Jason Healy, president of Lorillard's Blu eCigs unit. The third-largest seller of cigarettes in the U.S., based in Greensboro, North Carolina, bought Blu in 2012 for $135 million in the first foray by a major cigarette maker into the electronic market.

"There is an inherent hatred of tobacco cigarettes, which has been earned — fair enough," Healy said by telephone. "People are trying to make us out as a wolf in sheep's clothing. We're a sheep in wolf's clothing. Ninety-nine percent of our customers are existing smokers."

E-cigarettes are projected to represent about $1.8 billion of the $80 billion U.S. tobacco market this year, according to research by Bonnie Herzog, a Wells Fargo Securities analyst. Last year's $1.7 billion in sales were about double the 2012 total, she said.

Despite the segment's growth, it remains in a state of regulatory "limbo," with no oversight from the U.S. Food and Drug Administration or Bureau of Alcohol, Tobacco, Firearms and Explosives, said Kathleen Hoke, director of the Legal Resource Center for Tobacco Regulation, Litigation and Advocacy at the University of Maryland.

More States

North Dakota, New Jersey and Utah already include e- cigarettes in their bans in indoor smoking in public places, she said, while other states have passed laws against the devices on public-school property. New York City added e-cigarettes to its public smoking restrictions in December, while Chicago took the same step in January.

"This is a precursor to changing state laws," Hoke said in a telephone interview. "A lot of businesses are doing this on their own. People are accustomed to clean air in public places or workplaces, so this is kind of an extension of that, even though people don't know what's inside these electronic cigarettes."

Copyright 2018 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

NOT FOR REPRINT

© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.