Alternative cigarette company TAAT Lifestyle & Wellness (TAAT Lifestyle & Wellness Stock Quote, Chart, News, Analysts, Financials CSE:TAAT) is entering the Canadian marketplace through a partnership with a Canadian cannabis company.
TAAT on Friday announced an MOU with BC-based Christina Lake Cannabis to develop and distribute TAAT products for the Canadian market, giving CLC exclusive rights over TAAT’s Canadian business on a two-year renewable term where Christina Lake Cannabis will procure hemp biomass from third-party growers, produce TAAT’s Beyond Tobacco base material and manufacture and distribute TAAT products through authorized wholesale and retail channels.
A licensed cannabis producer, Christina Lake runs a 32-acre property with almost one million sq ft of outdoor grow and completed its first harvest this past October where its crop exceeded the company’s initial target by 44 per cent at 32,500 kg.
TAAT said Christina Lake has already identified multiple local hemp growers to get operations off the ground.
“We are very pleased to have partnered with CLC, giving us the opportunity to bring TAAT to legal-aged smokers in Canada, many of whom have shown great enthusiasm about the product,” said TAAT CEO Setti Coscarella in a press release.
Coscarella said Canadian regulations make it a complex region in which to do business in cigarettes, enough that they’re a frequent barrier to entry, hence the advantage of the CLC partnership.
“We have contemplated several international markets to which TAAT could expand first, and I believe that Canada is the ideal play based on the existing interest we already have from legal-aged smokers across Canada, a positive relationship with CLC to develop and distribute the product on our behalf, and a marketplace where the affordable price point of TAAT adds to its value proposition as a better choice,” Coscarella siad.
TAAT debuted on the Canadian Securities Exchange in June of last year, with the stock having increased in value by about 600 per cent since then, trading currently in the C$5.00 range.
TAAT offers smokers a non-tobacco alternative to traditional cigarettes, reproducing the smoking experience (a feature unavailable with vaping and e-cigarette experiences, the company says) in a nicotine-less plant-based form. The company saw its first commercial-scale production commence last fall and began selling its products in the state of Ohio soon thereafter. TAAT has said that about 60 per cent of tobacco retailers in Ohio carrying its products for three or more weeks have since placed more orders. Currently, the company has products in 126 points of sale in the state.
TAAT launched an e-commerce portal on February 17, opening up its products to adults aged 21 and older across the United States. Last week the company reported over C$100,000 worth of TAAT orders following the launch of its online store, while at the same time announcing work with Crossmark, a nationwide consumer packaged goods sales agency that directly services over 100,000 convenience stores, with the sales agency moving to add more points of sale for TAAT across the US.
Coscarella, a former Philip Morris lead strategist, said the TAAT rollout in the US has been planned to test initial reactions of smokers aged 21 and over when introduced to their cigarette alternative, with the first-week sales numbers boding well for the company.
“To sell more than C$100,000 worth of a relatively new product in such a short period is absolutely exceptional,” Coscarella said in a February 22 press release. “Countless smokers aged 21+ in the United States have been eagerly awaiting the launch of our online store, which I believe has contributed significantly to our product sales this past week.”
“Over the past two months, we have had the opportunity to gather quite a bit of feedback about TAAT from smokers aged 21+ as well as retailers and wholesalers of tobacco. I believe those insights have proven useful, as they played a role in creating our strategies for launching the TAAT online store on Wednesday, which has been a remarkable success so far,” Coscarella said.
TAAT announced last month an expansion in manufacturing at its Las Vegas processing facility due to increased demand in Ohio and anticipated demand from e-commerce sales. The company said production was pushed to 57,000 ten-pack cartons per month which represents a 233-per-cent increase.
In January, TAAT said it had shipped thousands of sample packs of TAAT to legal-aged smokers in 38 US states who requested samples from the company’s TryTAAT landing page.
“TAAT has been available for purchase by legal-aged smokers in Ohio for more than a month now, and we are delighted to be fulfilling thousands of sample requests made on our TryTAAT landing page as this gives us the opportunity to enrich existing interest in our product across the country,” Coscarella said in a January 22 press release.
Disclaimer: TAAT is an annual sponsor of Cantech Letter.