Tobacco has a long history in the United States. The first commercial crop of tobacco in America was cultivated by John Rolfe in 1612 Virginia - within seven short years, the crop grew into the colony's single largest export, and went on to become one of the United States' "cash crops" in the following centuries. Prior to the popularity of cigars in the 1800s, tobacco was made for snuff, chewing, and pipe-smoking. Cigarettes were not widely popular in the US until after the Civil War, but by the late 1880's cigarettes were being mass-produced by machines. While smoking tobacco was initially lauded as being good for one's health, studies dating from as early as the 1930's linked cigarettes to cancer. When the news hit the public, sales dropped - however tobacco companies responded by promoting filtered cigarettes with low-tar formulas, which promised a "healthy" smoke, and sales rose promptly in response by the 1950's.

However, a gigantic blow to the industry landed in the 1960s, when the Surgeon General's Advisory Committee released a 387-page report in 1964 entitled "Smoking and Health." In unambiguous terms, the report declared that "cigarette smoking is causally related to lung cancer," that that the average smoker is nine to 10 times more likely to get lung cancer than the average non-smoker, and named numerous carcinogens in cigarette smoke including DDT, cadmium, and arsenic. The tobacco industry has faced increased pressure ever since. In 1965, Congress passed the Federal Cigarette Labeling and Advertising Act, which required the surgeon general's warnings on all cigarette packages. In 1971, all broadcast advertising for tobacco was banned. In 1990, smoking was banned on all interstate buses and on all domestic airline flights less than six hours long. In 1994, Mississippi filed the first of 22 state lawsuits seeking to regain millions of dollars from tobacco companies as reimbursement for smokers' Medicaid bills. And in 1995, President Clinton announced FDA plans to regulate tobacco, especially sales and advertising aimed at minors. "Sin taxes," as they are commonly called due to being applied to unhealthy products, have been leveled at cigarettes and have caused prices to climb dramatically, straining smokers' pockets.

Today, "Big Tobacco" (as the industry is often termed) is dominated by two domestic companies: Philip Morris USA (Altria) (MO  ) and R.J. Reynolds (Reynolds American) (RAI  ), the latter of which acquired a third giant, Lorillard (LO  ), in June 2015. Yet outside competition is beginning to creep up on these long-established businesses. Japan Tobacco Inc. (2914: JP), for example, is beginning to join the ranks of "Big Tobacco" by marketing cheap LD cigarettes in the United States. A pack of LD cigarettes costs $2.81, compared to, for instance, $4.92 a pack for Marlboro (the leading brand of Philip Morris USA). In cases such as these, the traditional Big Tobacco companies rely on brand recognition and customer loyalty - cigarettes are addictive, and each specific brand delivers its own specific brand of satisfaction. However, as "sin taxes" and compounding regulations eat away at smoker's spending power, alternative brands with new names may begin to find increasingly more footholds in the American industry.