My friend John just quit a 30-year addiction…

The first time I met John was at a local poker tournament a few years ago. Of all the times I played with him, he was never once without a cigarette in his hand.

So imagine my surprise when I rolled into the game last Friday and saw John sitting at the poker table… his cigarettes nowhere in sight. After 30 years, he had quit cold turkey.

I was shocked. When I asked him why he stopped, he pulled out an electronic cigarette (e-cig) and gave it a puff — blowing the vapor right back into the bar.

#-ad_banner-#My friend John isn’t the only former smoker who’s made the switch from traditional cigarettes to their electric counterparts. In Amy Calistri’s March issue of Stock of the Month, she told readers how she herself used the product to quit smoking last December:

Last year, I started using an electronic cigarette sold by the tobacco company Lorillard (NYSE: LO). Over time, I went from using cartridges with medium amounts of nicotine (9 to 12 mg) to low amounts of nicotine (6 to 8 mg) to cartridges with no nicotine — basically just flavored water.

I’m not the only one who has chosen this path for cessation and it hasn’t escaped the notice of the acting U.S. Surgeon General. In a special report issued this year by the Surgeon General’s office, electronic cigarettes were lauded as a harm-reducing alternative to smoking tobacco.

So just how big is the electronic cigarette market?

According to Bloomberg, sales from the e-cig industry are expected to come in at $1.7 billion this year — up from $20 million in 2008. If e-cigs continue growing at their current rate, sales from electronic cigarettes will surpass sales from traditional tobacco products by 2047.

The surge in e-cigs has Big Tobacco gearing up for the growth. Just last February, cigarette giant Altria (NYSE: MO) acquired Green Smokes Inc., an innovative e-cig manufacturer with 2012 revenue of $40 million. Game-Changing Stocks analyst Andy Obermueller updated his subscribers on the acquisition in a February mid-month update:

Green Smoke, which sells its products in the United States and in Israel, targets the top end of the market, where Lorillard’s (NYSE: LO) blu is the top dog among the premium brands and where Altria hopes to compete with its Mark Ten electronic cigarette, which is currently available in only Indiana and Arizona.

Clearly Altria is not ready to go gentle into that good night and cede this potentially lucrative (and extremely fast-growing) market to the competition. Altria’s e-cigs are sold by its Nu Mark business unit, which I predict will one day be as large as its Copenhagen smokeless tobacco line.

The sticker price on the acquisition was $110 million, with up to $20 million in incentive payments.

“Nu Mark’s entry into the e-vapor category with its MarkTen product was an important development in Altria’s innovation strategy. Adding Green Smoke’s significant e-vapor expertise and experience, along with its supply chain, product lines and customer service, will complement Nu Mark’s capabilities and enhance its competitive position,” Altria boss Marty Barrington said. “Green Smoke’s culture of innovation and history of producing high-quality products are consistent with Altria’s culture.”

Andy goes on to label e-cigs as high on his list of “next big things…”

My Dad is fond of telling me the importance of always fishing where the big fish swim. Altria is a big fish. The company is a $70 billion behemoth with about $24 billion a year in sales from products like Marlboro, Virginia Slims, Merit, Parliament and Basic cigarettes. Altria’s subsidiary U.S. Smokeless Tobacco, maker of Skoal and Copenhagen, is the dominant player in chewing tobacco and snuff. Altria’s Black & Mild cigars are widely popular, and the company also owns a large winery and is a major holder of SABMiller, the beer company.

Now it’s setting its sights on the electronic cigarette market in a big way. Don’t worry, it can afford it. The company’s most recent balance sheet shows more than $3 billion in cash, which means that it not only can buy Green Smoke out of petty cash but that it can afford to put serious marketing muscle behind its e-cig offerings.

Right now, the investing space for electronic cigarettes is still pretty wide-open. There are a lot of start-ups like Vapor Corp (OTC: VPCO) and V2 Cigs that are fighting for market share as the industry leaders emerge.

But as the Altria acquisition shows, some brand name companies are already making their presence known in the e-cig market.

That’s normally how these kinds of game-changing trends happen. First, the trend establishes itself and becomes a mainstream affair. During this phase, start-ups fight tooth and nail to establish themselves as the industry leader.

Then the big companies — or the “big fish” — as Andy calls them, come in. They start buying up profitable businesses, consolidating the successful ones into a single operating unit.

It’s during this phase that investors stand to make the most money. As fresh capital flows in to acquire existing operations, shareholders who were already invested can receive some nice premiums on the buyout offers. Not to mention the opportunity to score those big, 10-bagger gains that also accompanies the best performing stocks in the sector.

That’s the point we’re at in the e-cig industry right now. There are no guarantees with investing. But if history if is any indicator, then early investors could make a lot of money betting on electronic cigarettes…

P.S. – Electronic cigarette companies aren’t the only stocks with 10-bagger potential we’ve found recently. In Andy Obermueller’s recent research report, The 5 Unstoppable Game-Changers to Get In On Now, he tells readers about three small-caps currently ushering in a “second industrial revolution.” One of these companies have seen its stock price grow over 493% in the last three years… and Andy thinks there’s plenty more to come. To learn about this stock, as well as the rest of Andy’s game-changing investment ideas, follow this link here.