Bloomberg Business Week

E-cigarettes : A $1.5 billion industry braces for FDA regulation.

The first time J Andries Verleur tried an e-cigarette in 2008, he burned his lip and accidently inhaled the nicotine fluid. "It was one of the worst products I ever tried," he recalls," but the idea was amazing."

Verleur, a heavy smoker, living in the Prague and happened to spot the strange new product in a Vietnamese grocery store. The crude early version obviously didn't work very well, but Verleur, a serial entrepreneur, immediately realized that if it did work, I could upend the tobacco industry. That was worth looking into; Cigarettes are a global business that generates more than half a trillion dollars every year, according to data from Euro monitor International.

The effects of inhaling nicotine vapor are not totally understood, but there is no EVIDENCE to date that it causes cancer. Experts and logic seem to agree that it's a lot better than setting chopped-up tobacco leaves on fire and inhaling the combustion byproducts, some of which are definitely carcinogenic. Because cancer is the main drawback of smoking for a lot of people, the delivery of nicotine without lighting a cigarette is very attractive. And because it produces a wispy vapor instead of acrid smoke, an e- cigarette lets you bring your smoking back indoors, where lighting up in an enclosed space is no longer socially or legally , acceptable.

Verleur saw right away that if e-cigarettes could be made as convenient and satisfying as a pack of smokes, he'd make a killing. He enlisted the help of his brother, an engineer working for Agilent Technologies (A) spinoff; booked a trip to China, and began meeting with manufacturers. In 2009 he formed his company. V2cigs, with four employees working out of an apartment. Five years later, V2cigs has six manufacturing facilities in Shenzhen, China, a Miami headquarters, 250 employees , and 5 million customers worldwide. Verleur says that more than a million of those are in the Us. Where Bloomberg Industries projects total e-cigarette sales could reach $1.5 billion this year.