This is Why Tobacco Stocks Are Exploding

Shares of Tobacco stocks saw big gains on Wednesday after the Food and Drug Administration announced a crackdown on teenager use of e-cigarettes.

The FDA has threatened to pull e-cigarettes from shelves if manufacturers do not control “widespread” teen use and is targeting the brands Juul, Vuse, MarkTen, Blu E-cigs, and Logic.

The companies are required to submit plans within 60 days detailing how the companies will prevent teens from using their products.

“I use the word epidemic with great care,” said FDA Commissioner Dr. Scott Gottlieb. “E-cigs have become an almost ubiquitous — and dangerous — trend among teens. The disturbing and accelerating trajectory of use we’re seeing in youth, and the resulting path to addiction, must end. It’s simply not tolerable.”

“We’re especially focused on the flavored e-cigarettes,” said Gottlieb. “And we’re seriously considering a policy change that would lead to the immediate removal of these flavored products from the market.”

He added, “The FDA won’t tolerate a whole generation of young people becoming addicted to nicotine as a tradeoff for enabling adults to have unfettered access to these same products.”

Altria, British American Tobacco, Philip Morris, and Imperian Brands, all saw their shares head higher. Altria had its best trading day since November of 2008 while British American Tobacco had its best day since December of 2008.

Disclaimer: We have no position in any of the companies mentioned in this article and have not been compensated for this article.