SHANGHAI (Reuters). China’s tobacco regulator has released draft rules governing e cigarettes on Thursday. The move takes the product out of a regulatory grey zone and puts it under state supervision.

China’s cabinet amended last week its tobacco monopoly law by including e-cigarettes in the State Tobacco Monopoly Administration.

To be eligible to legally do business in China, companies that sell e-cigarettes must comply with national standards.

A special license must be obtained from the tobacco authority for companies that produce e-cigarettes. This is provided that they are able to prove they have sufficient funds and that their facility meets the standards.

According to the tobacco authority, it is creating a national electronic cigarette transaction platform that will be used by all licensed retailers and wholesalers of e-cigarettes.

According to the regulator, tax collection and payment for ecigarettes must be done in compliance with all applicable laws and regulations.

After the international success of similar products, a number of Chinese companies began manufacturing and selling e-cigarettes made from nicotine salt-based tobacco in 2018.

RELX Technology Inc, the largest of them all, went public in New York City in January.

China’s cigarette market is controlled directly by the state, and its monopoly includes the distribution and pricing of brands. It also generates income tax for the government.