Tuesday, August 10, 2010

E-cigarette maker agrees to halt sales in Oregon

A leading distributor of electronic cigarettes has agreed to halt sales in Oregon, Attorney General John Kroger announced Monday.

Kroger said Smoking Everywhere Inc. did not seek U.S. Food and Drug Administration approval and provides no evidence to support claims that its so-called "e-cigarettes" are a safe alternative to conventional tobacco products. He also expressed concern that the company geared it marketing toward young people.

Oregon last year became the first state to go to court to block the sale of the devices, some of which are designed to look like traditional cigarettes.

Smoking Everywhere's electronic cigarettes have a battery-powered heating element and a replaceable plastic cartridge that contains chemicals, including liquid nicotine. The heat vaporizes the liquid for inhalation.

In settling the suit, the Florida-based company admitted violating Oregon's Unlawful Trade Practices Act. Besides no longer selling its products here, the company agreed to pay more than $95,000 to the state Department of Justice. The company's president, Elico Taieb, will pay another $25,000 and is barred from doing any business in Oregon that involves tobacco, nicotine or electronic cigarettes.

Taieb did not return phone calls seeking comment.

Ray Story, a Smoking Everywhere owner who's in litigation against Taieb, did not approve of the settlement. "At the end of the day, he's made some very dumb mistakes, and he's continuing to make those," Story said.

The Food and Drug Administration has clashed with e-cigarette companies on the question of whether the product helps people quit smoking. If it's marketed as a medical device, then it needs FDA approval.

The agency banned the import of electronic cigarettes into the U.S. last year, but a federal judge overruled the action in January. The U.S. Court of Appeals takes up the matter next month.

Story contends Smoking Everywhere is a cigarette company and needs to act as such. That means not advertising on the radio and not selling the product over the Internet, where there's no guarantee it won't be delivered to a minor. Story said he and Taieb have disagreed on that point.

"That's where Smoking Everywhere has an issue, because they're selling it on the Internet."

Story said e-cigarettes are less harmful than conventional cigarettes and less intrusive to nonsmokers. He sharply criticized Kroger for keeping the product away from Oregonians.

"The attorney general there really doesn't know what he's talking about," he said. "A state cannot ban a product without it banning every product within that same category."

The attorney general last year got two travel store chains to stop selling e-cigarettes in Oregon and persuaded another e-cigarette company, Sottera Inc., to leave the state.

Smoking Everywhere declined a request to restrict its Oregon sales, leading to the lawsuit filed almost a year ago in Salem.