We knew this would happen; it was inevitable, and this means victory and profit for some, and trouble for others.
THIS is the notable increase in mergers and investing into vaping companies.
In the past few weeks there have been a few investments from deep-pocked investors and outright acquisitions. Here I will address the most noteworthy.
For those looking to open a vape shop, grow it, scale it, then sell off for a bundle, Avail Vapor is the model to follow. As the largest retail chain in the US with over 100 corporate locations (not franchises), owners Donovan Phillips and Cole Smith have done it right. Since 2013 they have grown and now cover 12 states throughout most of the East Coast.
Over the years they have expanded into other products, including e-liquids, and have sold out to what some would consider their nemesis: Big Tobacco.
This was not a total sale, but was a “significant investment” by tobacco giant, Altria, makers of Phillip Morris products Marlboro and Mark Ten e-cigarette. In the past few years the collective lightbulbs have gone on and Big Tobacco has been making moves towards expansion into e-cigarettes, and now, into retail shops.
Some speculate that the shops will be a retail vape shop outlet for the surging “heat not burn” market, let by the leading product call IQOS. This product has rolled out internationally in a few other nations, but coming to America. It is one of the first products in line for premarket tobacco application (PMTA), which the FDA requires for new products on the market.
If there is a model to watch with scrutiny and indicating the direction of the vaping and e-cig market, this is it.
Nerudia is a Liverpool, UK based regulatory and compliance agency, and manufacturer and has been a leader in helping tobacco and related companies doing business in the EU comply with their FDA version of regulations called TPD, or Tobacco Products Directive.
This directive went into effect in May 2016, and specifies the requirements to sell tobacco and vaping products in any European Union nation.
Though not that well known outside tobacco circles, Fontem Ventures, part of the mega tobacco company, Imperial Brands PLC, is more recognized for their top selling e-cigarette, blu, a market leader for many years. blu has been significant in the UK, France and Italy as well as the US.
This acquisition is interesting since it strengthens the ability of a major manufacturer to potential limit or control the legal compliance of potential competitors.
The new kid on the block, one that is gaining a foothold in vape shops, is the hemp based cannabinoid known as CBD, or cannabidiol. Though not a vaping product in the conventional sense, CBD is gaining traction as a “gateway drug” into the potentially lucrative industry of cannabis.
Bradley’s Bioscience has walked the line between conventional nicotine based e-liquids and has been a leader in CBD science and innovation. They manufacture more than 500+ nicotine products across several brands; all of which are compliant with current FDA regulations and approved for sale in both the United States and internationally.
Isodial International (OTC:ISOLF) intends to acquire Bradley to help expansion into THC additives and conventional vaping products. They are a global innovator specializing in the development of pharmaceutical and wellness products.
The two companies have collaborated for several years and this new merger will help the innovation, development and manufacturing supply chain and help further the CBD and hemp oil market.
Do you have questions about mastering the vape industry? If so, send them on to norm@VapeMentors.com and we’ll address them in future columns.
Norm Bour is the founder of VapeMentors – a vape industry consulting company for vape shops, eCommerce sites and e-liquid brands. He’s also the host of Vape Radio, the largest vape business podcast in the world with more than 1.3 M downloads.
Contact him at norm@VapeMentors.com.