What the Best Small Cap Electronic Cigarette Stock? VPCO, SFIO, HPNN & AHII

Small cap electronic cigarette stocks Vapor Corp (OTCMKTS: VPCO), Smokefree Innotec (OTCMKTS: SFIO), Hop-On Inc (OTCMKTS: HPNN) and American Heritage International Inc (OTCBB: AHII) are what's left of the e-Cig market not controlled by "Big Tobacco" and at least one of these stocks is positioning itself or its technology to exploit opportunities in marijuana or cannabis. Last year, industry experts were saying that US retail sales of e-cigarettes could reach $1 billion for the year or 1% of the country's cigarette market but twice that of 2012 as sales go off the Internet and into more mainstream retailers. Moreover, they are being positioned as a "healthier" alternative to smoking (albeit some places have already extended their smoking bans to cover the devices). It should be stated that electronic cigarettes look just like traditional cigarettes and are usually comprised of three functional components:

A mouthpiece, which is a small plastic cartridge that contains a liquid nicotine solution; A heating element that vaporizes liquid nicotine so that it can be inhaled; and An electronics component which usually includes: a lithium-ion battery, an airflow sensor, a microchip controller and an LED (to indicate use).

When a user draws air through the electronic cigarette,a sensor detects the air and activates a heating element that vaporizes whatever solution (made from nicotine or even cannabis) stored in the mouthpiece/cartridge to be inhaled by the user.

With that in mind, here are some non "Big Tobbacco" small cap players in the electronic cigarette market:

Vapor Corp. A designer, marketer and distributor of electronic cigarettes and accessories, Vapor Corp's brands include the Krave®, Fifty-One® (also known as Smoke 51), VaporX®, Hookah Stix®, Alternacig®, EZ Smoker®, Green Puffer®, Americig®, Fumare™ and Smoke Star®. Vapor Corp says its business strategy is to leverage its ability to design market and develop multiple e-cigarette brands and to bring those brands to market through multiple distribution channels plus management believes the company was among the first distributors of electronic cigarettes in the US. In late February, Vapor Corp reported that total revenues for the fourth quarter of 2013 had grown 56% to $7 million and grew 22% for the full year to $26 million with net income coming in at $801,352 verses a net loss of $1,920,972. Vapor Corp also noted that its products are now in more than 60,000 retail outlets in the US and Canada plus the company completed a $10 million private placement of common stock to fund various growth initiatives. The President of Vapor Corp noted:

"We significantly expanded our retail footprint and marketing activities over the past year, as we continued to experience increased customer demand across the U.S. and Canada for our portfolio of e-cigarettes and vaporizers. This is mostly being driven by a rapidly growing number of users of tobacco-burning cigarettes who view e-cigarettes and vaping as a bona fide alternative to combustible cigarettes."

On Tuesday, Vapor Corp is down 25.2% since the start of the year but its also up 1,188.5% over the past year and up 44,566.7% over the past five years.

Smokefree Innotec. A designer, developer, manufacturer and marketer of hi-tech, nicotine and non-nicotine cigarette-like delivery devices which are completely smoke and vapor-free and tobacco-free, Smokefree Innotec does not have any news or filings on the Yahoo! Finance wires nor does it appear to have a website that still functions. However, the stock appears to still be trading occasionally (in fact, its up some 400% since the start of the year) – despite a VegasInc.com article from 2011 which noted that the company, its CEO and one stock promoter are accused of being "engaged in a fraudulent scheme involving the stock of SmokeFree involving illicit kickbacks and phony agreements." 

Hop-On Inc. A global ODM and OEM manufacturer of electronics, Hop-On Inc has successfully secured essential patents for mobile communications and computing technologies and developed the world's first disposable cell phone. Specifically, Hop-On Inc is focused on Android and Chrome OS -based devices, smartphones, tablets, televisions, set-top boxes, eReaders and innovative mobile device applications while its USAcig, Inc is a wholly owned subsidiary that specializes in electronic cigarettes and the production of "The Electric Cigarette™" (TEC) and "The Electric Cigar™" which have CE markings and meet EU consumer safety and health and environmental requirements. According to the company, the hardware is manufactured in China to exacting specifications and the atomizer water-based solutions are manufactured in the United States. Consumers use these products to inhale vapor (current options include tobacco nicotine, menthol nicotine, tobacco no-nicotine and in legal jurisdictions, cannabis sativa and cannabis indica) in the same way cigarette smoke is inhaled, receiving a nicotine dose that avoids harmful tar, carbon monoxide and other carcinogenic substances found in cigarettes. In mid March, Hop-On Inc announced that USAcig, Inc is shipping market ready hardware for its industrial hemp-based cannabidiol (CBD) oil for distribution in the State of Colorado. The press release noted that the company had completed development, testing and had entered mass production of electronic cigarettes containing cannabis oil byproducts for distribution and sale. On Tuesday, Hop-On Inc fell 10% to $0.0009 but the stock is up 800% since the start of the year.

American Heritage International. The manufacturer, distributer and seller of the American Heritage™ brand of disposable premium electronic cigarettes, American Heritage International's disposable premium electronic cigarettes have combined "authentic true to life flavor" with a soft filter plus uses ingredients that are food grade quality and 100% produced in America.

In the middle of March, American Heritage International announced that it had sold out its initial inventory of 20,800 "Sticks" and will receive its next shipment of 50,000 "Sticks" by the end of March; but due to increasing demand, the company has placed a much larger order for 100,000 "Sticks" to be received in April. In addition, American Heritage International has announced that it had secured product placement listings of its premium brand of disposable electronic cigarettes in a select number of 7-Eleven stores in the state of Florida plus the company has expanded its footprint in California, Florida, Texas and New Mexico while entering new markets in New York and Oklahoma – meaning its products are now on the shelves in an additional 251 stores bringing the number of stores to over 400. Its also worth noting that American Heritage International has added a former "Winston Man" to its Advisory Board plus the CEO recently concluded a successful tour of Brazil, Argentina and Uruguay where he set the groundwork to add national distribution partners. On Tuesday, American Heritage International fell 7.53% to $0.860, but the stock is up 1,614% over the past year.